2026 Federal Budget at a Glance

Below is a dot-point summary of Treasurer Jim Chalmers’ budget speech, which outlines the main budget measures. Mind the spin!

We’ll have more analysis tomorrow.

1. Framing: “Most important and ambitious Budget in decades”

Chalmers positions the Budget as a response to:

the Middle East war and the largest oil shock in history
global inflation, slower growth, and supply chain disruption
long‑standing domestic challenges in productivity, housing, and tax fairness

The Budget’s strategy has five pillars:

Getting through the global oil shock
Cost‑of‑living relief
Productivity and investment reform
Major tax reform
Budget repair through savings and restraint

2. Global oil shock: $14.8b fuel resilience package

The government responds to the oil shock with a $14.8b plan, including:

$10b Australian Fuel Security Reserve
More fuel and fertiliser supply
$1b in interest‑free loans for manufacturers
Incentives for freight to shift to rail and shipping
EV charging infrastructure
Cleaner Fuels Program ($1.1b)
20% domestic gas reservation
Support for critical minerals, smelting and manufacturing

3. Cost‑of‑living relief

Key measures:

Halving the fuel excise
Reducing heavy vehicle road user charge to zero
Tougher penalties for petrol companies
Easier credit access for small business

Tax cuts

New $250 Working Australians Tax Offset (from 2027)
Combined with other measures, workers receive up to $2,816 in 2028
Equivalent to $54 per week for the average earner

Health

$25b for public hospitals
$5.9b for new PBS listings
Permanent funding for 137 Medicare Urgent Care Clinics

4. Housing: $47b total investment

The Budget focuses heavily on housing affordability and supply:

$2b for enabling infrastructure (power, roads, drains) → 65,000 new homes
Cutting planning delays with states
Extending ban on foreign buyers of existing homes
Support for 4,000 young people at risk of homelessness

5. Major tax reform package (largest in 25+ years)

A. Housing‑related tax changes

Negative gearing limited to new builds from July next year
CGT discount replaced with inflation‑indexed model
New builds can choose either system
Minimum 30% tax rate on capital gains (from July next year)
30% minimum tax on discretionary trusts (from July the year after)

Goal: rebalance system towards workers, improve fairness, and support new housing supply.

B. Business tax reform

Permanent two‑year loss carry‑back for companies up to $1b turnover
Loss refundability for start‑ups
Expanded venture capital incentives
Targeted R&D reform

C. Simplification

$1,000 instant deduction for workers
Permanent instant asset write‑off for small business
Dynamic PAYG instalments
Long‑term EV tax settings

6. Productivity & investment agenda

Cuts $10.2b per year in regulatory costs
National Competition Policy reforms (GDP +$13b)
Removal of ~600 tariffs
Faster approvals (environmental law reform, Investor Front Door)
Skills recognition improvements
Major energy market reforms
AI commercialisation grants
Billions for science, CSIRO, SKA
Infrastructure investment across regions and cities
Strengthening the superannuation performance test

7. Budget repair: record $63.8b savings package

Net improvement: $26.1b
NDIS reform saves $37.8b
Real spending growth capped at 1.5% over eight years
All revenue upgrades returned to bottom line
Payments fall from 26.8% to 26.2% of GDP by 2030

Debt

Gross debt: $982b this year
Peaks earlier and lower than previously forecast
Lower in every year for the next 11 years

8. Major spending priorities

$3b for aged care
$2b for Thriving Kids
$3b for foundational supports outside NDIS
$2.2b for Services Australia
$1.2b for Closing the Gap
$53b for defence over the decade
$600m for counter‑terrorism and social cohesion

9. Closing message

Chalmers frames the Budget as:

protecting Australians from the oil shock
delivering cost‑of‑living relief
reforming tax and housing
strengthening resilience and national security
repairing the Budget responsibly

Chalmers concluded by claiming that the government is choosing “the hard road of reform” to meet both current pressures and intergenerational responsibilities.