Angus Taylor, the Coalition leader, has stated that the Coalition will only back the Albanese government's proposed overhaul of the National Disability Insurance Scheme (NDIS) if the "widow tax" loophole is first removed from its changes to taxing investment properties.
This warning comes as the Albanese government seeks to reach an agreement with the opposition this week to pass the NDIS bill in the Senate. The Greens have already ruled out supporting the changes, which are projected to increase the federal budget's bottom line by $37.8bn over four years.
In a letter to Anthony Albanese on Monday afternoon, Taylor described delaying the amendments as "unconscionable." He noted that the government was warned about the issue before the legislation passed and had promised to fix it.
The "widow tax" loophole arises from changes to negative gearing, where the law would apply to individuals inheriting a partner's share of a property after death or divorce, despite existing investment properties owned before 12 May being grandfathered. Rental losses on established homes bought after budget night will no longer reduce tax on other income from July 2027.
The government released an exposure draft for tax changes, including closing the loophole, earlier this month. Consultation on these changes is open until this Friday.
The government's NDIS proposal aims to tighten eligibility criteria and introduce independent functional assessments for all participants from 2028. The NDIS minister, Mark Butler, would also gain the power to reduce funding categories for individuals by up to 99%, with an intended 50% reduction in individual participant budgets for social, civic, and community participation once the bill passes.
It is estimated that without these interventions, the $52bn-a-year scheme could more than double in cost within a decade. Approximately 241,000 NDIS participants are expected to be shifted off the scheme by June 2031 following the introduction of the functional capacity test, with those unable to access NDIS funding directed to new state and territory programs.