Labor-Greens tax deal on negative gearing and CGT reforms sparks Coalition backlash

A deal with the Greens has cleared the way for Labor’s controversial tax reforms - and sparked a political firestorm.

The compromise, which includes extending scrutiny of the Government’s proposed NDIS reforms, is expected to allow the legislation to pass the Senate this week.

Housing Minister Clare O’Neil hailed the agreement as a breakthrough that would deliver tax cuts to 13 million workers, help renters enter the housing market and create a fairer tax system, while the Opposition accused Anthony Albanese of breaking promises made before the election.

“This is the biggest reform to housing and taxation our country has seen for a generation,” Ms O’Neil told Sunrise.

“The bill that the Parliament will now pass is going to give a tax cut to every single one of Australia’s 13 million workers. It’s going to create a fairer housing system, bringing 75,000 rental households into home ownership.”

But Opposition Senate Leader Michaelia Cash said the deal exposed a major credibility problem for the Prime Minister, accusing him of abandoning repeated commitments not to alter negative gearing and capital gains tax arrangements.

“What is hypocritical is the government doing a dirty deal with the Australian Greens to ram their toxic tax changes through the Australian Senate tomorrow,” Senator Cash said.

“Mr Albanese has a massive credibility problem. Australians now know he lied to them.”

The Coalition has vowed to oppose the tax changes and campaign against them at the next election, while still supporting Labor’s tax cuts. Senator Cash claimed the reforms would hurt Australians seeking to build wealth and get ahead, warning: “Say goodbye to aspiration and hard work in Australia, because Albanese is about to kill it.”

The clash came as Labor defended its decision to agree to a longer inquiry into planned NDIS reforms, a key Greens demand during negotiations.

Ms O’Neil said the extension would allow more voices to be heard without undermining the Government’s goal of making the scheme financially sustainable.

“What the Greens have asked for is a longer inquiry,” she said.

“They want to give more voices into the debate, and we think that’s a fair exchange for a really important reform.”

With the legislation expected to clear Parliament, the battle is already shifting to the political fallout, with the Coalition framing the reforms as a broken promise and Labor arguing the changes are necessary to make housing more affordable and deliver long-term tax reform.