News and politics live updates: Angus Taylor flags Coalition-Greens alliance to stop Labor tax package

Finance Minister Katy Gallagher has accused a Liberal senator of being patronising after she pointed out Labor’s capital gains tax changes aren’t a complete reversion to what existed before September 1999.

Liberal senator Claire Chandler noted the original capital gains tax, in place from 1985 to 1999 before a 50 per cent CGT discount, didn’t have a minimum 30 per cent tax and cited Prime Minister Anthony Albanese telling Parliament on May 26 that “we are also changing the capital gains tax regime to go back to 1999”.

Senator Gallagher defended this statement, arguing the Budget proposals do include a reversion to an indexation model on capital gains before Liberal PM John Howard’s CGT concessions.

“I don’t have all the transcripts that you’re reading from but the Government has been very clear, when making statements like that, that it’s relating to how you treat gains as opposed to the changes that were brought in by prime minister Howard and reverting back to the system that existed before that, adjusting for indexation and taxing real gains,” the Finance Minister told the Senate economics committee on Thursday.

“It’s a bit early to start the patronising - we’ve got a long day ahead of us. The Prime Minister has been clear about the changes that we have brought in.”

Penny Wong has stressed that Australia must be “active in shaping” the alliance with the United States, as Donald Trump “envisions a different role for the United States and the world”.

Appearing before a Senate Estimates hearing on Wednesday, the Foreign Minister spoke of the need for Australia to act as a sovereign, independent nation in the face of US actions globally.

“We have always understood that President Trump envisions a different role for the United States and the world,” Senator Wong said.

“Nevertheless, the United States remains the world’s largest economic military power with daily influence on international events that have consequences for Australia.

“This fact reinforces why being active in shaping our alliance is in Australia’s national interest. “For decades, this alliance and America’s network of partnerships with many of our neighbours has made our region more stable and deterred potential aggressors.

“As with all our partners, there have been times over the 75 years of our alliance with the United States when we’ve had differences of view and differences of approach.

“We’ve always exercised our own agency, asserted our sovereignty, and made decisions in Australia’s interest in all our foreign policy.”

Angus Taylor says the opposition could join forces with the Greens to fight Labor’s proposed tax changes in the Senate as the government pushes to pass the contentious legislation before parliament breaks for its Winter recess early next month.

The Greens and independent David Pocock have expressed concerns with Labor’s package, particularly new powers they say would allow Treasurer Jim Chalmers to alter the laws once passed.

“Well, we’ll work with anyone to stop toxic taxes, and that’s what Labor is proposing. And we’ll work with whoever we can,” Mr Taylor told reporters.

“The Greens have an opportunity here to stop this legislation, and we’ll work with whoever we can to stop this toxic legislation getting through the parliament.”

Treasury secretary Jenny Wilkinson has admitted Federal governments are too reliant on income tax revenue as Labor resists an Opposition call to index tax brackets.

In response to a question from 22-year-old Labor senator Charlotte Walker, she told the Senate economics committee in Canberra the Commonwealth was heavily reliant on pesonal income tax revenue.

“In terms of a policy challenge, is the pressure within the tax system on personal income tax, personal income taxes going forward in terms of the pressure within the system to use personal income taxes as part of revenue raising in order to fund government Budgets,” she said.

Personal income tax is expected to make up 51.9 per cent of Federal Government revenue in 2026-27, or $382.4 billion out of the $737.1 billion in tax receipts.

The working age population bears the financial brunt of the income tax burden as capital gains tax concessions for property investors benefit older Australians.

Ms Wilkinson described this as an intergenerational issue.

“In relation to intergenerational equity, there are really three sets of issues which are raised. One of them is the longstanding decline in home ownership rates,” she said.

Gulf hostilities have flared again as Iranian attacks on Kuwait damaged its airport and injured dozens while the US military carried out strikes near the Strait of Hormuz, with diplomacy to halt the war showing little sign of progress.

The attacks are the latest to test a shaky ceasefire, sending oil prices up more than two per cent, as the strait remains largely closed more than three months after the US and Israel launched strikes on Iran.

Flights at Kuwait International Airport were suspended after an Iranian drone and missile attack damaged airport facilities and diplomatic missions, killing one person and injuring more than 60 others, Kuwaiti authorities and state media said

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Speaking on ABC Radio on Thursday morning, Prime Minister Anthony Albanese labelled the tariffs as “unwarranted” and insisted they would ultimately hurt US consumers.

“We continue to use every opportunity that we have to advocate that US tariffs imposed on Australia are unwarranted, and of course, our view is that tariffs are actually a penalty on consumers in the United States,” he told ABC Radio.

“We produce very good products here in Australia that are in demand in the United States, but importantly… the United States has a trade surplus with Australia that it’s enjoyed for decades, and we continue to advocate for Australia’s national interests.”

The move comes as the Trump administration attempts to bring back the emergency tariffs that the US Supreme Court declared invalid back in February.

The administration has proposed that 45 countries, including Australia, would face an extra 12.5 per cent tariff under Mr Trump’s plan.

While 15 other countries with forced‑labour import bans — whether fully implemented, pledged, or partial — would incur an additional 10 per cent tariff.

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Medical cannabis patients in the most populous state will be allowed to get behind the wheel without the fear of losing their driver’s licence.

With more than 300,000 medicinal cannabis users across NSW, the government is forging its own path by giving an exemption to drivers who are prescribed the drug with a fit-for-purpose scheme.

A bill that adopts “a more commonsense approach” will be introduced to parliament that is fairer to a growing community while still keeping the roads safe with several provisions.

“This is a significant reform for NSW, but it’s one we are approaching carefully and with road safety at the centre of every decision,” Premier Chris Minns said.

To be eligible for scheme, drivers on an unrestricted licence only will be required to enrol as a registered medicinal cannabis user with Transport for NSW and provide proof of a valid prescription.

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Contentious tax changes will have a larger drag on home prices than the government forecast in the Budget, according to analysis from Australia’s largest lender.

Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by five per cent, compared to Treasury forecasts of a two per cent drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.

A slowdown in the property market was already underway before the Budget due to global uncertainty and rising interest rates.

But the quick response to the tax changes suggested the near-term impact will be sharper than expected, the duo said in a research note on Wednesday.

“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”

Treasurer Jim Chalmers refused to say whether it was the government’s intention for home prices to go down.

“We’re not targeting a particular price outcome in percentage terms or in dollar terms,” he told reporters in Canberra.

“The Treasury analysis that we released with the budget assumes that house prices continue to grow but a bit more slowly.”

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Opposition Leader Angus Taylor has joined the growing backlash against Donald Trump’s latest tariff regime, arguing Australia should not be targeted by a close ally and vowing to oppose the measures.

Speaking in Canberra on Wednesday morning, Mr Taylor said the Coalition stood firmly against the tariffs and questioned why the US would impose trade penalties on one of its longest-standing partners.

“They’re a great friend, and they shouldn’t do it to a friend. We’ve fought with them in every war, every major war. They shouldn’t be imposing tariffs. It’s not what we want to see, and we’ll fight against these rotten tariffs.”

Treasurer Jim Chalmers has hit back at Donald Trump’s latest tariff regime after the US imposed a 12.5 per cent levy on imports from 54 countries, including Australia, over concerns about goods allegedly linked to forced labour.

Arguing Australia already has world-leading modern slavery laws, Mr Chalmers labelled the tariffs unfair and vowed to continue fighting the measure.

“These tariffs are unwarranted, they’re unjustified, and they’re inconsistent with our free trade agreement with the US, and we’ve made that case repeatedly,” he said.

“So, we will continue to take every opportunity that we can to stand up for Australian exporters and to stand up for the workers and businesses in those industries.”