The short answer

Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 explained

The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 is a government bill under the Treasury portfolio that, according to the official summary on the Parliament bill page, makes three main changes: it would enable corporate tax entities that are not significant global entities to carry back a tax loss in an income year and apply it against tax paid in either or both of the previous two income years; it would permanently extend the $20,000 instant asset write-off from 1 July 2026; and it would provide an income tax exemption for income derived from employment with PNG Chiefs Limited. The bill was introduced in the House of Representatives on 25 June 2026, passed the House on 18 August 2026, and was introduced in the Senate on 19 August 2026, where the second reading debate was in progress that morning. The bill is before the Senate and has not been enacted.

This is a federal system guide. State constitutions, parliaments and local-government laws can allocate comparable functions differently.

The useful question is not only “what is the rule?” but also “who administers it, which document controls it, and when might it change?” That distinction prevents an accurate general explanation from becoming wrong advice in a particular election, chamber or policy setting.

Evidence review

What the bill proposes

The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 is a government bill from the Treasury portfolio that amends existing tax legislation rather than creating a standalone Act.

The official summary on the bill page identifies three measures. First, the bill would amend the Income Tax Assessment Act 1997, the Income Tax Assessment Act 1936 and the Taxation Administration Act 1953 to enable corporate tax entities that are not significant global entities to carry back a tax loss in an income year and apply it against tax paid in either or both of the previous two income years to receive a tax offset.

Second, the bill would amend the Income Tax Assessment Act 1997 and the Income Tax (Transitional Provisions) Act 1997 to permanently extend the $20,000 instant asset write-off from 1 July 2026. Third, it would amend the Income Tax Assessment Act 1997 to provide an income tax exemption for income derived in respect of employment with PNG Chiefs Limited.

The Parliamentary Library's Bills Digest No. 70 of 2025-26, dated 28 July 2026, provides independent analysis of the bill's provisions and background, and is available through the Parliament of Australia website.

Evidence review

Current parliamentary status

The bill was introduced and read a first time in the House of Representatives on 25 June 2026, with the second reading moved the same day. On 18 August 2026 the House agreed to the second reading, considered the bill in detail — agreeing to two Government amendments — and agreed to the third reading. The bill passed the House of Representatives on 18 August 2026.

The bill page now records the bill as before the Senate. The bill was introduced in the Senate and read a first time on 19 August 2026, with the second reading moved the same day. The second reading debate was in progress on the morning of 19 August 2026; the Senate program noted that if consideration of the bill had not concluded by 10.10 am, all remaining questions would be voted on without further debate.

The bill page also lists circulated House amendments from the bill's passage through the lower house: a second reading amendment by Sophie Scamps MP, a detail crossbench amendment by Zali Steggall MP, and a detail government amendment on sheet GN148. Two Government amendments were agreed during consideration in detail on 18 August 2026.

Evidence review

Who would be affected

The loss carry-back measure would affect corporate tax entities that are not significant global entities — broadly, businesses below that threshold — allowing them to apply a tax loss in an income year against tax paid in either or both of the previous two income years.

The instant asset write-off extension would affect businesses that purchase eligible assets: the $20,000 write-off would be permanently extended from 1 July 2026, so eligible businesses could keep immediately deducting eligible assets costing $20,000 or less.

The PNG Chiefs Limited exemption would affect individuals deriving income from employment with that entity, which would be exempt from income tax. Tax practitioners, accountants and the Australian Taxation Office as the administering agency would need to apply the new rules if the bill were enacted.

Evidence review

What steps remain before it could become law

The bill has completed its House of Representatives stages. It now sits before the Senate: the first reading is done, the second reading has been moved, and the debate was in progress on the morning of 19 August 2026. If consideration of the bill had not concluded by 10.10 am that day, the Senate program noted, the remaining questions would be put without further debate.

If the Senate agreed to the second reading, the bill would proceed through the committee of the whole stage, where further amendments could be moved, and then a third reading. Senate amendments would require the bill to return to the House of Representatives for agreement. If both houses passed the bill in identical form, it would be presented for royal assent, with provisions commencing according to the bill's commencement clauses.

Evidence review

Chamber record cross-check — 19 August 2026

The chamber record covered by this update is Senate Dynamic Red for Wednesday 19 August 2026 (record id d1975cf9472d9e5f). Under item 5, government business orders of the day, it lists the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026, with the second reading debate in progress from 9.01 am. It records the bill's introduction and first reading in the Senate and the second reading moved on 19 August 2026, and notes that if consideration of the bill has not concluded by 10.10 am, all remaining questions will be voted on without further debate.

Senate Dynamic Red is the live Senate program record for the sitting, not final Hansard; the official record of Senate proceedings is the Journals of the Senate and the corrected Hansard. The proof Hansard of 18 August 2026 is likewise a draft record subject to correction, the settled record being the corrected Hansard and the Votes and Proceedings. None of these records indicates that the bill has been enacted: the bill is before the Senate and has not passed both houses.

Evidence review

Key evidence and uncertainties

The official bill page, bill text, explanatory memorandum and Bills Digest are the primary sources for what the bill would do. The chamber records — the proof Hansard of 18 August 2026 for the House of Representatives and Senate Dynamic Red of 19 August 2026 — document where the bill is in its passage.

Key uncertainties concern the Senate stage: how the second reading debate resolves on 19 August 2026, whether further amendments are moved, and the fiscal impact of the three measures. Positions taken by parties and crossbench senators in debate are claims made by those participants rather than established facts; any division results would be recorded in the official chamber records.

Common questions

Before you rely on the answer

What does the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 actually do?

According to the official summary on the bill page, the bill makes three changes: it would allow corporate tax entities that are not significant global entities to carry back a tax loss and apply it against tax paid in either or both of the previous two income years; it would permanently extend the $20,000 instant asset write-off from 1 July 2026; and it would provide an income tax exemption for income derived from employment with PNG Chiefs Limited.

Has this bill passed into law?

No. The bill was introduced in the House on 25 June 2026 and passed the House on 18 August 2026. It was introduced in the Senate on 19 August 2026, where the second reading debate was in progress that morning. The bill is before the Senate and has not been enacted.

What happened in the House of Representatives on 18 August 2026?

The House agreed to the second reading, considered the bill in detail — agreeing to two Government amendments — and agreed to the third reading, so the bill passed the House of Representatives on 18 August 2026. The proof Hansard for that day is a draft record subject to correction.

What happens next in the Senate?

The Senate read the bill a first time and the second reading was moved on 19 August 2026, with the debate in progress that morning. The Senate program noted that if consideration of the bill had not concluded by 10.10 am, all remaining questions would be voted on without further debate. After the second reading, the bill would still need further Senate stages — and, if amended, agreement from the House — before it could be presented for royal assent.

Source spine

Primary material used for this guide

Review trigger: The bill passed the House of Representatives on 18 August 2026 and was introduced in the Senate on 19 August 2026, where the second reading debate was in progress with a closure arrangement noted in the Senate program (changed_fields: senate_dynamic_outcome, status). Review when the Senate votes on the second reading or any amendments, when the bill page status changes, or when the bill is enacted.

Archive note: Bill review updated 19 August 2026. The bill passed the House of Representatives on 18 August 2026 and was introduced in the Senate on 19 August 2026, where the second reading debate was in progress at the time of writing. The bill is before the Senate and is not enacted. Senate Dynamic Red is the live Senate program record for the sitting and is not final Hansard; the proof Hansard of 18 August 2026 is a draft record subject to correction.

Primary links are provided without affiliate or tracking parameters. Confirm that the source still applies to the bill, sitting date, jurisdiction or reporting period before relying on it.