Taylor demands Albanese repeal ‘cruel tax’ in return for NDIS bill support

Angus Taylor has demanded Prime Minister Anthony Albanese repeal the so-called “widow tax” as a precondition for supporting the government’s proposed reforms to the National Disability Insurance Scheme (NDIS). The Coalition leader made the demand in a letter to Albanese, warning that the opposition will not back the bill unless the tax loophole is addressed first. The move comes amid efforts by the Albanese government to secure cross-bench support in the Senate for the NDIS reform package, which includes sweeping changes aimed at reducing long-term fiscal pressures while maintaining core services for people with disabilities. The proposed reforms, outlined in an exposure draft released earlier this month, seek to close the “widow tax” loophole, which allows some beneficiaries to continue claiming rental losses on inherited or post-divorce properties. This provision has been criticized for disproportionately affecting widows and divorced individuals, particularly those who rely on the NDIS for essential support. Under current rules, investment properties acquired before 12 May 2023 remain exempt from certain tax changes, but the new measures would extend these exemptions to inheritances and divorce settlements, creating a financial burden for affected taxpayers. Taylor’s letter, obtained by The Australian, emphasized that the government had previously committed to addressing the issue but had yet to take action. He accused the administration of using delays as a tactic to gain political advantage, stating that the situation was “unconscionable.” The Coalition leader also expressed concerns that the government’s broader tax changes, particularly those targeting trusts, would add unnecessary complexity and cost for families and small businesses. These changes, he argued, could force many to restructure their financial arrangements, potentially harming vulnerable groups. The NDIS reform package also includes stricter eligibility criteria and mandatory functional assessments for all participants starting in 2028. These measures aim to ensure that funding is allocated based on need rather than entitlement, but critics argue they risk excluding many individuals from the program. The government estimates that without such interventions, the NDIS, which currently costs around $52 billion annually, could see its costs more than double within a decade. To mitigate this, the plan proposes a 50% cut in budgets for social, civic, and community participation activities once the bill becomes law. Approximately 241,000 NDIS participants are projected to lose access to the scheme by June 2031 due to the implementation of the functional capacity test. Those excluded will be redirected to state-run programs, which will require joint funding from the Commonwealth. Crossbench senators have already voiced opposition to the reforms, arguing that the changes are moving too quickly and could severely impact the quality of life for disabled Australians and their families. Some have called the proposals “devastating” and inconsistent with national values. The government maintains that the reforms are necessary to ensure the sustainability of the NDIS while preserving its core functions. It has invited public feedback on the exposure draft, with consultations ending this weekend. As the Senate prepares to consider the bill, the debate over the “widow tax” and the broader implications of the NDIS changes continues to intensify, with both sides locked in a battle over policy priorities and fiscal responsibility. The outcome of this legislative process will likely shape the future of disability support in Australia for years to come.