Matt Thistlethwaite
Kingsford Smith · Australian Labor Party · Australia
“At the same time, the bill reduces unnecessary burden and simplifies the operation of the scheme. It reduces regulatory requirements for lower risk arrangements, including removing unnecessary approval steps for minor variations and renewals of arrangements that have already been assessed.”
“It expands our ability to manage risk, including by allowing conditions to be imposed on foreign arrangements both at the point of approval and during their operation. This provides a more flexible and proportionate response than outright refusal or cancellation.”
“It applies to state, territory and local governments and public universities, and requires notification, and in some cases approval of, arrangements with foreign entities, particularly foreign government departments, agencies and universities that lack independence in their governance.”
“I move: That this bill be now read a second time. Australia has long benefited from international engagement whether it be through education, cultural exchange, research collaboration or trade. These connections strengthen our economy, enrich our society, and extend our global influence.”
“In 2024, the government commissioned an independent review of the scheme led by Rosemary Huxtable. As part of the review, Ms Huxtable consulted widely across federal, state, territory and local governments and Australian universities to hear their views and their concerns about the operation and the structure of the scheme.”
“Its amendments would strengthen the scheme's framework by sharpening the focus on Australia's national interest and enhancing the tools available to manage risk. The bill will streamline the scheme's operation by simplifying processes and reducing administrative burden, particularly for lower risk arrangements.”
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“Together, these measures simplify the scheme whilst maintaining appropriate oversight. These reforms strike the right balance. They support Australia's continued international engagement, engagement that delivers enormous economic, cultural and strategic benefit for our nation. They ensure that engagement is conducted in a way that protects Australia's broader national interests. They strengthen risk management, reduce unnecessary burden and modernise the framework to meet the realities of a more contested world. This bill ensures the Foreign Arrangements Scheme remains clear, effective and fit for purpose, supporting openness while safeguarding our national interests. Debate adjourned.”
“At the same time, the bill reduces unnecessary burden and simplifies the operation of the scheme. It reduces regulatory requirements for lower risk arrangements, including removing unnecessary approval steps for minor variations and renewals of arrangements that have already been assessed. It clarifies key concepts, such as institutional autonomy, making the scheme easier to apply and reducing administrative complexity for regulated entities. It improves the operation of the public register, ensuring it reflects current arrangements and focuses on the most significant decisions. This enhances its accuracy, usability and transparency. And it gives the government more flexible administrative tools, including targeted delegation and limited extensions of decision timeframes, so that complex arrangements can be properly assessed.”
“It expands our ability to manage risk, including by allowing conditions to be imposed on foreign arrangements both at the point of approval and during their operation. This provides a more flexible and proportionate response than outright refusal or cancellation. It enhances whole-of-government coordination by enabling information collected under the scheme to be shared with relevant Commonwealth entities, supporting better informed decision-making across portfolios. It ensures emerging forms of international engagement are appropriately captured, including by extending the scheme to arrangements entered into by overseas campuses of Australian universities. It improves the government's ability to respond to noncompliance, including by allowing the minister to address inadvertent breaches in a flexible and proportionate way.”
“Its amendments would strengthen the scheme's framework by sharpening the focus on Australia's national interest and enhancing the tools available to manage risk. The bill will streamline the scheme's operation by simplifying processes and reducing administrative burden, particularly for lower risk arrangements. Together, these reforms ensure that the scheme continues to support international engagement while protecting Australia's interests. The bill strengthens the legislative framework in several ways. It embeds the national interest explicitly in the object of the act, ensuring decisions are guided by a comprehensive view of Australia's security, economic and foreign policy interests.”
“In 2024, the government commissioned an independent review of the scheme led by Rosemary Huxtable. As part of the review, Ms Huxtable consulted widely across federal, state, territory and local governments and Australian universities to hear their views and their concerns about the operation and the structure of the scheme. While the review confirmed the scheme is working, it identified opportunities to strengthen its effectiveness. Attention should be concentrated on areas of greatest risk, while compliance should be simplified and the regulatory burden reduced. This bill responds to the review's findings, and this bill implements a number of those recommendations that were made by Ms Huxtable.”
“It applies to state, territory and local governments and public universities, and requires notification, and in some cases approval of, arrangements with foreign entities, particularly foreign government departments, agencies and universities that lack independence in their governance. Since 2020, over 22,000 notifications have been received—demonstrating the breadth of Australia's international engagement and the importance of maintaining appropriate oversight. The scheme has enabled the Australian government to work cooperatively with states, territories, local governments and universities to support beneficial partnerships while managing risk. Where necessary, it has enabled decisive action, including earlier this year, when the government prohibited entry into two arrangements with Russian and Belarusian entities.”
“I move: That this bill be now read a second time. Australia has long benefited from international engagement whether it be through education, cultural exchange, research collaboration or trade. These connections strengthen our economy, enrich our society, and extend our global influence. But we live in an increasingly complex and contested world. Where foreign engagement brings both opportunities and new risks. Strategic competition has the potential to play out at every level of engagement between nations, including at a subnational level. In this environment, it is essential that Australia's international engagement remains consistent with our national interest. The Foreign Arrangements Scheme was introduced in 2020 to provide visibility and oversight of these foreign engagements.”
“It expands law enforcement powers. It ensures that the proceeds of crime regime can be used to seize the profits that drive this trade. It builds on our government's strong record of action: record funding for the Australian Border Force, the appointment of the first Illicit Tobacco and E-Cigarette Commissioner and unprecedented cooperation across jurisdictions. It sends a clear message to organised crime that the days of low risk and high reward are over. This parliament has a responsibility to protect communities, to uphold public safety and to ensure criminal syndicates cannot profit from harm. That's exactly what this bill delivers.”
“It requires intelligence, coordination and the full force of the law, and that's exactly what this bill delivers. The ABF, the AFP, the Australian Criminal Intelligence Commission and the state police are working together to dismantle these networks. The national disruption group is coordinating efforts across jurisdictions. With this bill, law enforcement will have the penalties, investigative powers and proceeds of crime tools they need to hit these syndicates where they hurt most: their profits. That is the only way to win this fight—not by cutting excise and pretending that the problem will disappear but by choking off the money, shutting down the illegal shops and making this trade unprofitable. This bill is a necessary, proportionate, evidence-based response to a rapidly growing organised crime threat. It strengthens penalties.”
“Let's be clear: the immediate beneficiaries of an excise cut would be global big tobacco—not Australian consumers, not public health and certainly not community safety. We can't surrender Australia's health policy to organised crime, we can't unwind decades of progress in reducing smoking rates, and we cannot pretend that cutting excise would do anything other than make big tobacco more profitable and organised crime more entrenched. Not one line of those proposals would shut down an illegal shop. Not one line would seize a dollar of criminal profit, and not one line would make a community safer. This bill does all three. Fundamentally, we must go after the crime syndicates themselves. Battling organised crime is a serious job.”
“That's what national coordinated action looks like, and the Albanese government remains committed to working with every state and territory to shut down this trade. While the government is focused on dismantling organised crime networks, others have chosen a different path. We've heard the calls to cut the excise, but those advocating for it cannot point to a single piece of evidence showing that it would actually reduce illicit tobacco—not one. It's a policy built on a vibe, not on facts. As the ABS data released yesterday confirms, consistent with the tobacco commissioner's report, the problem is driven by surplus global production weaponised by transnational organised crime, not by domestic settings.”
“Through the National Illicit Tobacco and E-cigarette Coordination Forum, 80 priority actions have been identified for states. These include stronger licensing regimes, long-term closure orders, penalties for landlords who knowingly lease to illegal operators and more on-the-ground enforcement. We're already seeing results. I've been walking down the street in my electorate and seeing signs on what were previously some of these dodgy operators operating out of shopfronts saying, 'This shop has been closed down due to illegal illicit tobacco sales being identified.' In South Australia and Queensland, illegal trade has fallen sharply in areas where enforcement has reached 100 per cent coverage. Victoria is moving to strengthen closure and landlord laws. Other jurisdictions are following suit.”
“Border Force has recorded multiple record-seizure weeks—a record week in March and another in April. But the reality is simple: border enforcement alone cannot defeat a globalised, highly profitable criminal enterprise. That's why this bill is so important. It strengthens penalties. It expands investigative powers. It targets the profits that drive the trade. The government's focus is simple: shut down illegal shops, choke off the money and make this trade unprofitable. But we can't do it alone. The only way to dismantle illegal tobacco markets is through seamless cooperation between the states and territories and the Commonwealth. Over the past six months, interjurisdictional cooperation has strengthened dramatically.”
“I've been down to Port Botany in my electorate, to the Australian Border Force container X-raying facility, and I've seen firsthand the hauls of illegal cigarettes that they're picking up through that technology—shipping containers that are taken randomly off Australia's largest and busiest container port and x-rayed through that facility. This scale of response is required. To understand the challenge, we need to recognise that no country can win this fight at the border alone. Even Singapore, one of the most orderly jurisdictions in the world, has an illicit tobacco problem. They don't have shopfronts; they have motorcycle couriers and encrypted messaging apps. The method changes, but the threat is the same. That's why our government is throwing everything at this problem.”
“Our strategy has three key pillars: first, disrupting and dismantling border threats; second, enhancing detection, disruption and destruction of illicit products; and, third, better coordinating across jurisdictions through the national disruption group and the National Illicit Tobacco and E-cigarette Coordination Forum. The results are significant. Since January 2024, the Australian Border Force has seized more than 14 million vaping products and accessories. In the last six months of the year, more than a billion illicit cigarettes were seized.”
“Adult smoking rates have fallen dramatically. The challenge now is to hold on to those gains. We cannot surrender decades of progress to organised crime. If we were to reduce the excise, we'd be saying that the illegal syndicates have won and that we're going to heed and bend to what they want by reducing the cost of illegal cigarettes. This builds on the Albanese government's strong record of action against illicit tobacco. Since 2023-24, the government has provided $346 million in funding to the Australian Border Force to crack down on illicit tobacco and vaping products. We appointed Australia's first illicit tobacco and e-cigarette commissioner. We backed the appointment with $21.3 million in the 2025-26 budget to coordinate those national efforts.”
“Because illegal tobacco is so cheap to produce, even if excise were wiped out completely, illicit tobacco would still be cheaper. States, territories and the Commonwealth would be left chasing the same criminals and the same syndicates. They would be shutting down the same sleazy shopfronts that have sprung up in strip shopping centres across the country. It's unfortunate that many of them are springing up around schools. This has been a bipartisan policy for decades. The tobacco excise rose by around 121 per cent under the previous Liberal-National government. It's risen by about 32 per cent under our government. So, of that cost increase associated with increases in the excise, much was driven under the previous Liberal-National coalition government. The purpose was never to raise revenue; it was to reduce consumption, and it worked.”
“This is a serious organised crime issue, and reducing the excise risks the health benefits that have come from the increasing cost of smoking that is driving many to quit the habit. That brings a national health benefit as well as a benefit to the individual. This is a global problem that's been driven by a massive surplus of cheap production. In some countries, illicit tobacco can be manufactured for as little as 50c a pack. Organised crime syndicates operating like multinational corporations have weaponised this surplus and flooded national borders with illegal product. These groups don't care what they sell. One day it's counterfeit luxury goods, the next day it's tobacco and the next day it's drugs or human trafficking. Their business model is simple: maximise profits, minimise risk.”
“The consequences for communities are severe. Without legislative change, penalties will remain too low. Law enforcement powers will remain inadequate. Criminal syndicates will continue to exploit the gaps, and this bill closes those gaps. It ensures that penalties reflect the seriousness of the offending. It ensures that illicit tobacco offences are treated as serious offences for the purposes of telecommunications access. It ensures the proceeds of crime regime can be used to seize the profits that drive this trade. This is how you deter, disrupt and dismantle organised crime. Some have suggested that cutting tobacco excise would somehow solve the illicit tobacco problem, but reducing excise won't solve this problem.”
“They ensure that illicit tobacco related offences are treated as serious offences under the T(IA) Act. They enable access to telecommunications data and interception powers essential for disrupting organised crime networks. These are not unprecedented powers. They bring illicit tobacco into line with other serious crime offences, they provide consistency across existing search warrant and investigative frameworks, and they do not impose new burdens on legitimate businesses or community organisations. They simply ensure that law enforcement has the tools it needs to respond to a rapidly evolving threat. Some may ask why further legislation is needed. The answer is clear. Despite previous reforms, the illicit tobacco market has continued to grow at an exponential rate. The profits are enormous. The risks to criminals are low.”
“Criminal syndicates have treated the current penalties as a cost of doing business. This bill changes that. It raises offence penalties to match the severity of the harms being caused. It ensures that illicit tobacco is treated as the serious organised crime that it is. Secondly, the bill strengthens Australia's proceeds-of-crime regime. It makes the regime more effective in targeting the profits generated from illicit tobacco. The truth is simple: the main motivation for these criminal groups is money. If we want to shut down the trade, we must choke the profits. To achieve these objectives, the bill amends the Customs Act, the Excise Act, the Proceeds of Crime Act, the Taxation Administration Act and the Telecommunications (Interception and Access) Act. These amendments expand law enforcement powers, and they increase penalties.”
“The Illicit Tobacco and E-cigarette Commissioner has estimated that the value of the illicit tobacco market in 2024-25 was between $4.1 billion and $6.9 billion. Organised crime groups are earning between $4 billion and $7 billion in profits, and these profits are then used to fund drug trafficking, scams, money laundering and other serious harms. But they're not victimless crimes. They hurt communities. They hurt honest retailers, most importantly, and they hurt workers. They undermine public safety. In that context, this bill is not optional. It's essential. The Combatting Illicit Tobacco Bill has two clear objectives. First, it rebalances the risk-reward calculation for criminal actors. For too long, the penalties for illicit tobacco offending have been far too low relative to the profits that are on offer.”
“The Combatting Illicit Tobacco Bill 2026 goes to the heart of community safety, public health and integrity of our borders. This bill is a central part of our government's work to crack down on the illicit tobacco market and organised crime groups that are profiting from it. For many years, illicit tobacco was treated as a niche issue, a matter of health policy or lost revenue, but that era is now over. The evidence is now overwhelming that illicit tobacco is no longer a sidelined criminal enterprise. It's a serious organised crime crisis. It's a multibillion dollar revenue stream for criminal syndicates. It's fuelling violence, firebombings, intimidation and the spread of serious crime across the country.”
“It's a great example of the wonderful work that our government has done in securing fuel supplies for the Australian people, to ensure that our economy doesn't face disruption, and a great example of the strong relationships that we have internationally. Proposed expenditure agreed to.”
“We've been successful in securing the Australia-European Union Free Trade Agreement—and I will give credit to the opposition. The A-UKFTA and the CPTPP were good agreements, and Labor offered support to those. The question for the opposition is: will you offer similar support for the Australia-EU Free Trade Agreement, which opens up and expands markets for Australian agricultural producers, into the largest market in the world—Europe? That is a question that they will not answer. Will they or won't they support the Australia-EU Free Trade Agreement? I was asked to provide an update regarding fuel. I can tell the House that we now have 48 days worth of fuel, 30 days of avgas and 36 days of diesel. Who would have thought that we now have more fuel supplies in stock than we did when this crisis began!”
“The Australia-Indonesia Treaty on Common Security—the Jakarta treaty—is a major step forward in our relationship with Indonesia, and this budget provides $33.2 million over four years to strengthen our institutional ties, increase Indonesian language and country expertise in Australia, support economic security and resilience, improve civil maritime capabilities and establish an annual Australia-Indonesia leadership dialogue. With India, the budget provides $25½ million over four years to build our comprehensive strategic partnership. These are practical investments in the relationships that matter most to our community and to Australia. At a time of global uncertainty, the government is investing in trade diversification.”
“We're backing that commitment with the Australian Infrastructure Financing Facility for the Pacific, with an additional $550 million in capitalisation, supporting high-quality, sustainable infrastructure across the region. For Pacific island countries, climate change is the No. 1 priority, and Australia will provide $173.7 million directly to climate change and environment initiatives for our regional development partners, which is a $29 million increase. In South-East Asia, this budget also strengthens Australia's engagement with a region central to our future.”
“When our neighbours are more resilient, Australia is more resilient. This budget continues our deepening engagement with the Pacific, supporting climate resilience, health, education, economic resilience, connectivity, infrastructure and access to essential services. Our focus is primarily on security, and we've already announced the Pukpuk Treaty, which builds on other agreements that we have: the Vuvale Partnership with Fiji and the Falepili Union with Tuvalu. It was also wonderful to see Matthew Wale, the new Prime Minister of Solomon Islands, here today—evidence of the growing relationship between Australia and our Pacific neighbours.”
“The global development landscape is changing rapidly, and developing countries in our region face significant pressures, including major global aid cuts, trade disruptions and energy insecurity as well. In 2026-27, Australia will invest $5.2 billion in official overseas development aid. Going to the last speaker's question, it's an increase in our overseas development aid budget. It's an indexed increase of $112 million from 2025-26, and our government introduced indexation to the overseas development aid budget. More than 75c in every development dollar will support the Indo-Pacific. There is $2.2 billion for the Pacific and $1.4 billion for South-East Asia. This is a strategic investment in Australia's national interests. When our region is peaceful, stable and prosperous, Australia is more secure.”
“We're living in a period of sharper strategic competition, where rules and norms that underlie our security are under enormous pressure. The conflicts in Ukraine and the Middle East are having material effects on Australians at home and their safety abroad, where disruptions to trade and global reductions in development assistance threaten the economic prosperity of our region. In this environment, we can't afford to be passive. We must work to shape a peaceful, prosperous region where Australia is a trusted partner, and that's what the budget does. The budget continues our government's commitment to investing in our region, our resilience and our relationships. It focuses our development assistance where Australia has the most at stake and where it can have the greatest impact, and that is in our neighbourhood, in the Indo-Pacific.”
“In terms of transparency, the Australian Submarine Agency publish a corporate plan, and they provide an annual report to the parliament that ensures the Australian people know about the decisions that we are making in respect of delivering that optimal pathway and ensuring, most importantly, the principal objective of this government, keeping the Australian people safe into the future.”
“We'll be ensuring that we're not operating four different classes of submarines through the life of this project. We wouldn't have the Collins class and two types of Virginia classes before we acquired the SSN-AUKUS technology manufactured in Australia. Instead, we will have three classes—Collins, consistency when it comes to Virginia class and then our own manufacturing capability. I would point out that the Virginia class' in-service type is a massive upgrade in capability for Australia. We are still acquiring an upgrade in capability.”
“They will be in-service submarines from the same block of manufacturing out of the shipyards in the United States. This is the most sensible and indeed the optimal pathway that our nation should adopt to acquire this technology for a number of reasons. Firstly, it ensures consistency. That is important when it comes to training the Australian Defence Force to operate those submarines. If we have the same three block types of submarines then it ensures consistency in the training of our submariners to operate those submarines, and that is what we are going for—consistency to ensure that we can deliver the program. It also ensures maintenance consistency as well, and having the correct maintenance program to keep those submarines in the water for as long as possible will be important in reducing costs to the program.”
“I've been down to the Osborne shipyards, and I've seen firsthand the work that is commencing on the extension of the lifetime of the Collins class submarines, and they will extend well into the period in which we acquire the Virginia class American technology of the three submarines so that there is no capability gap that Australia has when it comes to our undersea capability and defending the Australian people should something go wrong. Then, on the weekend, the defence minister, at the IISS Shangri-la Dialogue, again, with his UK and United States counterparts, announced the finalisation of the Submarine Rotational Force-West implementation arrangements, which are very important—again, another step in delivery of the project—and the type of Virginia class submarines that we will acquire three of in the early 2030s.”
“We'll be able to build those submarines based on the UK Astute class design but incorporating the best technology that the US submarine technology agency has on offer. Work has already commenced on constructing that shipyard to ensure that we have that capability into the future. All of this is backed and underpinned by an extension of the Collins class diesel-powered submarines that we have at the moment, and I can tell you that that work has commenced.”
“A further announcement was made about that on the weekend by the defence minister. Finally, Phase 3 is Australia acquiring the capability to construct these important, most complex submarines, which will add to our sovereign manufacturing capability. When we talk about a Future Made in Australia, there is no greater example of a Future Made in Australia than our nation acquiring the capability and the means to manufacture our own conventionally armed nuclear-propelled submarines right here in Australia at the Osborne shipyards in Adelaide—a project that will create 20,000 jobs in numerous industries across our country, providing us with a great technology and capability uplift that we've never seen in our Defence Force in the past.”
“When I was the assistant defence minister and I had responsibility for the Defence estate, I visited Garden Island on many occasions to see that work being undertaken to ensure that we had the wharf space and that we had the facilities to cater for the Virginia class and Astute class submarines rotating through Australia and training with our Navy on a regular basis. That has been completed and those rotations are beginning to take place. The second phase of the AUKUS optimal pathway is the purchase of three Virginia class submarines in the early 2030s. These will be sovereign Australian submarines commanded by the Royal Australian Navy. This program was approved, importantly, by the US Congress in December 2023. So Australia has the approval to acquire the Virginia class capability into the future.”
“It was announced by the Prime Minister in March 2023, with the American president and the UK prime minister, in San Diego, and it outlines our multiphase plan to acquire this technology into the future, the stages that we will undertake and how we will do it. It is all publicly released. In fact, it's available on the Australian Submarine Agency website. The plan has begun. We've begun the phases of development and delivery of the AUKUS plan. Phase 1 is the Submarine Rotational Force-West. This is where we start to train with the United States Navy and the UK navy on familiarity with the technology that Australia will acquire in future years. This required some very large infrastructure upgrades to the base in the south of Perth at Garden Island. Those infrastructure upgrades have been completed.”
“Delivering AUKUS will help us meet that commitment of keeping Australians safe. Nuclear-propelled conventionally armed submarines are the best capability possible for Australia to acquire. Nuclear propelled submarines have a longer range and endurance and greater stealth, which means that they can go undetected for longer periods of time than diesel electric submarines, which simply cannot match those same capabilities. Now, to acquire this capability, the defence minister and the defence department have worked on a plan to acquire this technology as quickly as possible to ensure that there are no capability gaps on Collins class subs coming to the end of their life and when we acquire the nuclear propelled technology. That plan has been publicly announced; it's available for any Australian to see.”
“At the apex of that strategy, which our government has adopted based on the independent advice of the reviewers under the D efence strategic review , is the acquisition of nuclear-propelled conventionally armed submarines. That is the key to our strategy of deterrence within our region. This capability upgrade is required to meet the increased security challenge that our nation will face into the future. So our government has decided that we should acquire the best submarine capability possible to keep an island nation like Australia, which relies upon shipping for our commerce and international trade as an important part of our economy, safe into the future and, most importantly, to keep Australians safe. That has to be the No. 1 objective of any Australian government—to keep Australians safe.”
“The war in Ukraine, the conflict in the Middle East and the use of coercive tactics have all put huge pressure on the international rules and norms that nations like Australia have relied upon in the past for our security and certainty. These norms and these rules are now under increasing threat. This was a point that was identified in the two defence strategic plans that have been outlined by our government since we came to office in 2024 and 2026. The National defence s trategy confirms and reaffirms that Australia's security depends on strong partnerships and alliances and the importance of a strategy of denial to deter any aggression towards Australia into the future.”
“I thank the member for Wentworth for putting this important issue on the agenda, because it does give me an opportunity to provide an update on the AUKUS submarine program, consistent with our approach of providing maximum transparency and accountability to the Australian people for what will be the largest and most complex industrial manufacturing program ever undertaken in our nation, and, importantly, the largest-ever capability uplift in the Australian Defence Force, to ensure that we keep Australians safe into the future. We live in an era of increasingly contested space and less predictability in our region, the Indo-Pacific.”
“When you look at those figures, you see what an excellent job the Albanese Labor government is doing in managing our nation's finances and ensuring that we are returning any savings and additional revenue in the budget to the people of Australia to reduce their tax burden.”
“When you look at our budget deficit in the context of international comparisons, the Labor government is doing a sterling job in managing our nation's finances and ensuring that we're on a pathway back to surplus in accordance with the outlines that we've measured. The gross debt position is also very interesting as well. If you look at our gross debt position as outlined in the budget—again, this is all outlined on page 93 of Budget Paper No. 1—our gross debt is 50 per cent of GDP in 2027. How do we compare to other nations? In the Euro area, gross debt is 85 per cent of GDP. In the UK, gross debt is 100 per cent of their GDP. In Canada, it's 110 per cent of their GDP. In the United States, a whopping 130 per cent of GDP is their gross debt position.”
“There'll be $63 billion in savings and additional revenue that will go to ensuring a better budget position because of this government's responsible management. Gross and net debt will be lower compared to MYEFO under this budget. I also want to finish with some international comparisons about our budget position. These are outlined on page 93 of Budget Paper No. 1. The deficit that Australia will run in 2027 will be 2.1 per cent of GDP. I want to provide you with an international comparison to see where Australia sits. Canada's deficit is 2.5 per cent of GDP. The UK's is 3.1 per cent of GDP. The euro area's is 3.4 per cent of GDP, and the United States's is 7.4 per cent of GDP.”
“Because we're making those responsible decisions, because we're reforming our taxation system and because we've been able to find savings, we're able to return some of the bracket creep to Australians in the form of lower taxes and additional incentives in our taxation system. I want to conclude with an overview of the budget position because I think some of this has been lost in the discussion that's been going on around tax reform. We've actually improved the budget bottom line as well in this budget. We'll run a deficit of $31 billion over 2026-27. But, importantly, the budget will be $44 billion better off over the forward estimates compared to MYEFO. That is because of responsible economic management, finding savings in the budget and returning most of those savings to the budget bottom line.”
“We're also ensuring that there are savings that are outlined in our budget through reforms to the National Disability Insurance Scheme, to the way private health insurance operates and to uncommitted funding across programs. In total, there's $63.8 billion in savings in this budget alone. That will take pressure off Australians because we will be able to return some of those savings to Australians in the form of returning bracket creep. That's in the form of the two tax cuts that are coming over the course of the next two years, the working Australians tax offset, the $1,000 deduction and being able to halve the fuel excise at the moment while Australians are facing increasing prices at the bowser.”
“There'll be no additional tax burden on those particular types of structures. That's clearly outlined on page 31 of Budget Paper No. 1. We will also introduce other measures to improve productivity—removing 1,000 nuisance tariffs; the $20,000 instant asset write-off; faster environmental approvals; modernising the energy market; faster skills assessment, particularly for migrants; reforming the points test for migrants; and a permanent two-year-loss carryback for firms with up to $1 billion in turnover. So here we are reforming the system again so it promotes productivity and cures one of those ills that we have in our economy at the moment. These reforms ensure that we can generate additional revenue and budget savings. The revenue will increase by $44 billion to 2028-29 since MYEFO.”
“The tax will be paid by the trustee, and the beneficiary will receive a non-refundable credit, similar to franking credits, for tax already paid. This is to ensure that we're stopping people who can afford it shifting income to family members and others to reduce their marginal tax rates and avoid paying income tax. Someone may be able to transfer their income to their kids or their partner through a trust to avoid paying their income tax. Currently, that's not taxed. It's untaxed. The majority of people who own and operate these discretionary trusts are in the top 10 per cent of income earners in the country. Again, there have been mistruths spread about this. I want to correct those mistruths. These are the facts. Disability trusts, testamentary trusts, deceased estates and charitable trusts will be exempt from the changes.”
“They aim to encourage people to invest in productive assets, rather than simply sitting on assets, waiting for price appreciation, making windfall gains and getting a tax deduction. The second area where we need to improve is productivity. We want a tax system that encourages people to work and to try and get ahead, not punishes them the more that they work and for the longer hours that they work. We want to make sure that the tax system supports people who work longer hours by providing them with incentives rather than providing incentives for people who are relying on asset price inflation and appreciation for gains. So we're reforming the capital gains tax, as I mentioned. We're also introducing a 30 per cent tax on discretionary trusts from 1 July 2028.”