TITLE: Australia’s Budget Tax Bills Pass the House, but the Senate Has Not Had Its Say
The House of Representatives has passed Australia’s final budget tax bills. But the Senate has not yet had its say, and negotiations could still change what businesses, founders and trustees need to prepare for.
The government is aiming to pass the package in the third week of November 2026. Until then, treat the measures as proposals, not law.
Track what passed the House on 29 October
On Thursday 29 October, the House passed three bills:
- The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, covering the proposed capital gains tax (CGT) overhaul and related trust rules.
- The Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026, proposing a 30% minimum tax on certain discretionary trust income.
- The Treasury Laws Amendment (Tax Reform No. 4) Bill 2026, covering the startup CGT concession and changes to the R&D Tax Incentive.
You can follow the official Parliament bill record. The Australian Financial Review’s report sets out the Senate negotiations now in focus.
House passage is an important step, but it does not make these proposals law. The Senate can pass them, reject them or amend them.
Prepare for three Senate pressure points
The government needs the Greens’ support, and the party is seeking changes to the package. Its demands include extending the proposed 15-year refundable R&D offset period for hi-tech and biotech ventures. It also wants fossil fuel companies excluded from R&D rebates, a package reported to be worth about $350 million a year.
On trusts, the Greens oppose exempting all distributions to registered charities and deductible gift recipients from the proposed minimum tax. That leaves the trust provisions open to further debate.
Crossbench MPs are also pressing for changes. Independent Monique Ryan has argued that both the proposed 10-year and 15-year R&D caps are arbitrary and that there should be no limit. Kate Chaney has raised concerns from medical research leaders.
Independent Allegra Spender wants a different CGT model for business assets: retain indexation for property but apply a 40% discount to businesses and other assets. She argues the proposed inflation-based approach could disadvantage risk-taking businesses. Former Reserve Bank board member Jillian Broadbent supports her position.
Prime Minister Anthony Albanese said the government believes it has “got the measures right”. Whether that position holds through Senate negotiations remains to be seen.
Watch the biotech R&D debate closely
The May 2026 budget initially proposed limiting the refundable R&D tax offset to a company’s first 10 years. Following industry opposition, the proposal was extended to 15 years for eligible therapeutic-goods R&D.
That extension still concerns biotech companies. Developing medicines and vaccines can take 20 to 30 years, with an average development period of about 17 years. AusBiotech is asking senators to remove or extend the proposed 15-year limit, warning that later-stage clinical trials, R&D and manufacturing could move offshore to places such as Singapore and New Zealand.
The stakes can be substantial. The AFR reported that Australian company Gamma Vaccines estimated phase 2 trials for its universal flu vaccine at about $100 million and phase 3 trials at about $400 million. The company said raising that funding in Australia without the R&D tax rebate would be virtually impossible.
For more on the package’s startup and R&D provisions, read our earlier Australia tax update on the startup CGT bill. You can also review AusBiotech’s Senate campaign.
Keep the proposed dates in view
If passed in their current form, the bills set out different start dates:
- CGT changes: proposed to apply from 1 July 2027.
- Minimum tax on certain discretionary trusts: proposed to apply from 1 July 2028.
- R&D changes: proposed to apply from 1 July 2028.
The proposed trust minimum tax would generally be paid by the trustee, with non-refundable offsets for eligible non-corporate beneficiaries. The detail matters: a non-refundable offset is not the same as a cash refund. For a further update on the trust proposal, read our earlier report on the discretionary trust bills.
Use the waiting period to organise your records
You do not need to act as though the bills are already in force. You can, however, prepare so that a final version is easier to implement.
- Trustees: Map your expected distributions and beneficiary types. Review whether an excluded election trust (EET) election could be relevant, but wait for the final legislation and confirmed election rules before making decisions.
- Businesses and founders: Keep clear records of asset transactions, share issues and other information needed to assess potential CGT treatment.
- R&D claimants: Track eligible project costs, evidence and claim periods. If your business relies on refundable offsets, model how a 10-year or 15-year limit could affect future cash flow.
- Everyone affected: Watch for amendments and the Senate Economics Legislation Committee report, due 13 November 2026. Public submissions on the trust bills closed on 29 October, and hearings are scheduled for the following week. Kalkine Media’s report outlines some of the issues raised by accountants and family businesses.
This is a planning window, not a signal to apply proposed rules early. Keep your records current and check the final bill text before changing your compliance processes.
FAQs
When will the Senate vote on Australia’s budget tax bills?
The government is aiming for passage in the third week of November 2026. The Senate Economics Legislation Committee’s report on the trust bills is due on 13 November, before the expected vote.
What is the proposed 30% minimum tax on discretionary trusts?
The bill, which passed the House but is not yet law, proposes a 30% minimum tax on certain discretionary trust income from 1 July 2028. Eligible non-corporate beneficiaries would receive non-refundable offsets for trustee tax paid.
What does the proposed 15-year R&D cap mean for biotech companies?
The proposed refundable offset would be available for up to 15 years for eligible therapeutic-goods R&D, rather than 10 years generally. The industry is asking senators to extend or remove the cap, citing long development timelines and the risk that research and manufacturing could move offshore.
Is the proposed CGT discount change law yet?
No. The House passed the CGT bill on 29 October 2026, but the Senate has not. The proposal would introduce a new approach to CGT for assets held from 1 July 2027, subject to the Senate’s decision and any amendments.