Treasurer Jim Chalmers has announced the most ambitious and politically risky tax changes since the Howard era as part of a federal budget that defies the economic threat of the Iran war to push Australia along the “hard road to reform”. Source: The Guardian.
Arguing that the Australian public is ready for difficult choices aimed at reviving intergenerational fairness and the collapsing dream of home ownership, the Government will scale back tax breaks for landlords by abolishing negative gearing for new investors and replacing the 50 per cent capital gains tax discount with the inflation-linked approach that existed before 1999.
Treasury modelling suggests that the property tax changes will help an extra 75,000 Australians “achieve the dream of home ownership” over the coming decade.
“I think the time is right for these kinds of reforms and for this level of ambition,” Mr Chalmers said.
“Around the Australian community there is an appetite for a government which is prepared to take on some difficult things. It has become increasingly clear to us, for example, that the housing challenge is primarily about supply but it is not exclusively about supply.”
The budget also includes the previously announced deep cuts to the National Disability Insurance Scheme, with the “difficult but necessary reform” slated to save $36.2bn over the four-year forward estimates.
The budget also includes tax relief for more than 13 million workers in the form of an automatic $250 “working Australians tax offset” but the relief will be delayed until 2027-28.
This sits alongside a $1000 instant tax deduction that will deliver an average $205 benefit for 6.2 million people in 2026-27.
The budget includes $2.6 billion for the previously announced 26-cent temporary cut to the fuel excise.
But Labor held back from announcing any major new cost-of-living support measures, in a major break from what has been the centrepiece for budgets at the federal and state level since the Covid pandemic began.
Shadow Treasurer Tim Wilson said the budget brought only higher taxes, more debt and no measures to lift living standards.
He confirmed the Coalition would oppose changes to negative gearing and the capital gains tax discount, but would support the working Australians tax offset.
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Budget 2026 Australia: Jim Chalmers goes for broke in federal budget facing twin threats of housing pain and Iran war disaster (By Patrick Commins, The Guardian)
