Lifetime tax breaks for mothers should be a priority, argues Liberal MP before party review

The Guardian

18-06-2025

Special tax breaks for mothers should be considered as part of an overhaul of the tax system to better support 'modern families', a Coalition MP has argued.
As Jim Chalmers opened the door to a national debate on tax reform, the opposition backbencher Garth Hamilton said 'everything must be on the table' to redesign the system in favour of families.
The new Liberal leader, Sussan Ley, will soon outline details of the process her party will use to review its policies – including on tax and net zero – after its thumping federal election defeat.
But Hamilton, who was the deputy chair of the house economic committee in the previous parliament, said he was not waiting for the party review process to start, joining other Liberal MPs in publicly floating tax ideas.
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The advocacy offers a preview of the types of ideas that will be raised, and how public and contested the internal policy brawl will be, as the Liberals thrash out a platform to fight the next election.
Hamilton is planning to run a tax review process of his own, which would bring together like-minded MPs during parliamentary sittings and host events with expert speakers.
'Our tax system must have a purpose and that purpose must be to make life better for Australian families. It's no longer enough to invent new taxes just so governments can have more money to spend,' the Groom MP told Guardian Australia.
'We need a tax system that's inclusive, that supports modern families, whatever shape they may be. If you are looking after each other, Australia should be looking after you.'
Hamilton said one of the ideas that should be on the table was lifetime tax rate deductions for mothers, in recognition of the fact they faced lower salaries when returning to the workforce.
Viktor Orban's far-right government in Hungary is introducing a radical version of the idea, offering lifetime income tax exemptions for mothers of two or more children as part of a plan to address the country's falling fertility rate.
Hamilton understood the fertility rate argument but said he viewed the policy as more of an incentive to work and to help women build their super balances.
He is also among the conservative MPs who support income splitting, a recurring policy idea that would allow parents to split combined incomes evenly across two tax returns, lowering the household's overall tax bill.
For example, if one parent earned $120,000 and the other earned $40,000 then both would be taxed at the rate of someone on $80,000.
One Nation pushed the policy at this year's federal election as a means of supporting stay-at-home parents. The former Coalition senator Gerard Rennick asked the Parliamentary Budget Office to model a similar policy earlier this year, which calculated it would cost roughly $12.5bn over two years.
In a sign of widening support in conservative circles, the rightwing Liberal senator and shadow assistant minister for families and communities, Leah Blyth, has publicly argued the case for income splitting over the past week.
'It's not fair. It's not sustainable. And it's time we backed families,' Blyth said of the existing tax settings in a social media post last week.
The Australian Financial Review reported Blyth was also working on a proposal to make private school fees tax deductible while cutting taxpayer funding to them.
Speaking before Chalmers used a speech to the National Press Club to set the scene for tax changes, the shadow finance minister, James Paterson, reiterated that the Coalition was prepared to work 'constructively' with the government.
'It is self-evident that we do not collect tax in this country as efficiently as we could, and it holds back our prosperity and our productivity and our efficiency as an economy, and there are gains that can be made by reforming the tax system,' Paterson, who is acting shadow treasurer, told Sky News.
'But that is not a blank cheque for this government to increase taxes.'