Tax package, estimates clashes and teal talks dominate a busy week in Canberra

Federal politics this week was dominated by the government's contentious tax package, renewed Coalition pressure for an election, a series of notable Senate estimates moments and growing discussion about whether teal independents should formalise their alliance.

Matt Canavan emerged from Parliament House with fellow Nationals declaring that an election should be called. He argued that changes of the current scale should be tested at the ballot box, saying: "Unlike the prime minister, I and my Nationals colleagues have the guts to be subject to the will of the people."

The push came two weeks after the government unveiled its tax package. On Thursday, Treasurer Jim Chalmers introduced the first tranche of legislation to parliament, combining changes to the capital gains tax discount and negative gearing with a $1000 standard tax deduction for work expenses and a $250 tax offset for workers.

The government has framed the package in a way that challenges the opposition to vote against tax relief. Canavan, and to a lesser extent Opposition Leader Angus Taylor, have argued that changes of this size should be taken to an election, as John Howard did with the GST in 1998.

The article notes, however, that an early election would be risky for the Nationals in the lower house. It points to Australian Financial Review voter analysis suggesting the party could be heavily reduced, with One Nation potentially replacing much of the Coalition as the official opposition.

Canavan said he was not concerned about the polling and that his priority was to improve the situation and scrap the taxes. His remarks were delivered against the backdrop of a nearby anti-Iranian regime rally. "I think they're fighting for democracy too; albeit in much more difficult circumstances," he said.

Debate over the tax package has continued, especially around the impact of CGT changes on small business and start-ups. The government had earlier suggested carve-out discussions would be limited to start-ups, but it now accepts the discussion should include small business as well. Even so, Anthony Albanese told Afternoon Briefing on Wednesday that people "should not expect big changes".

The first tranche of legislation will be subject to a short inquiry. The Greens have indicated they are prepared to support the government's shortened timeline so the bill can pass before parliament rises for the winter break on July 2.

After a week focused on selling the budget, Albanese appeared more comfortable back in parliament, where he sought to move the conversation away from the Coalition's attacks and back to housing during Question Time. The government is consistently trying to shift the debate to the area where it believes there is wider acceptance: removing tax breaks on existing property.

Housing Minister Clare O'Neil reinforced that emphasis during a National Press Club address that had been added to the schedule at short notice. In that speech, she promoted the concept of a "flat-pack home".

Former treasurer Joe Hockey said he felt relatively good about the budget by comparison with his own widely criticised 2014 budget, joking that it had slipped to third place among bad budgets, behind Chalmers and Paul Keating in 1993. He supported limiting negative gearing to new builds but called the CGT changes a "mistake". He also warned that Australia was "sleepwalking" towards an economic crisis within five years, with unemployment reaching 15 per cent because of AI.

Employment Minister Amanda Rishworth addressed AI more cautiously while unveiling a major overhaul to the unemployment program. She said: "One of the key reasons we want to make sure people get the right support at the right time is to prepare for if there is any disruption in the labour market for whatever reason going forward."

The week also produced a string of headlines from Senate estimates, described by the article as the "red interrogation room of pain". Among the more notable developments, National Anti-Corruption Commission boss Paul Brereton quit three years into his five-year term and then appeared at estimates to explain why.

Services Australia disclosed spending of more than $258,000 on airline lounge memberships from 2022 to 2026. ABC managing director Hugh Marks said Justin Stevens' replacement would be announced on Friday and denied the former news director had been pushed out. He later told staff the role would go to Simon Robinson, the former executive editor of Reuters.

The article also reports that an Australian woman with links to ISIS, who is barred from entering Australia under a temporary exclusion order, tried to board a flight home with other members of the cohort who returned from Syria this week. NSW raised concerns about the cost of monitoring the group.

Another estimates hearing was suspended after a clash between Glenn Sterle and Bridget McKenzie. The Labor senator called the Nationals frontbencher an ignoramus and a fool and said he would "cut her up" in a debate.

Attention then shifted back to the lower house, where Zali Steggall and Allegra Spender said they were considering their next moves and whether the teal movement should become a more formal alliance. The discussion reflects a broader question about whether there is political space for voters who do not want to support Pauline Hanson but also do not want to back the Coalition.

Former prime minister Malcolm Turnbull said the teals were the most obvious figures to fill that gap or be part of filling it. Speaking to ABC's Radio National Breakfast, he argued: "The more the Liberal Party tries to chase and emulate and copy One Nation the more it builds up the vote for One Nation."

Turnbull denied any active involvement in talks involving Spender, Steggall and moderate Liberals who may be looking for a new political home. Teals outside Sydney distanced themselves from the proposal, while Sophie Scamps and Nicolette Boele were more open to the idea in the future.

What had been largely behind-the-scenes discussion became more public after David Pocock said on Sunday that there had been "plenty of conversations" about a new party being formed in response to One Nation's rise. Pauline Hanson, who turned 72 this week, marked the occasion by cutting two cakes with billionaire Clive Palmer.

It remains unclear whether any response will take the form of a formal party or a looser coalition of community independents. The unresolved question, the article suggests, is whether the effort is about building a spiritual successor to the Liberals or avoiding the effects of electoral reforms that cap independent campaign spending.