BUDGET – AUSTRALIA

Workers pay as income taxes hit a 30-year high

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Original article by Michael Read
The Australian Financial Review – Page: B5 : 13-May-26

The federal government’s budget includes a new and permanent income tax break for wage and salary earners. The Working Australians Tax Offset will be worth up to $250 per annum and is slated to cost about $3bn in its first full year of operation; an estimated 13.3 million workers will be entitled to the tax offset, although it will not be available until they submit tax returns for the 2027-28 financial year. Meanwhile, the budget papers show that government revenue from individuals’ income tax is forecast to exceed $382bn in 2027-28; this equates to 52 per cent of the total tax take, and it is expected to rise to 54.5 per cent by 2029-30.

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Youth boon in anti-Boomer push

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Original article by Grace Lagan, Isabella Freeland, Andrew Hobbs
The Australian Financial Review – Page: B9 : 13-May-26

The federal government has used its 2026 budget to announce that it will scrap negative gearing on established properties from July 2027, although the move does not apply to existing investments in such properties, or to investments in new properties. It is one of a number of tax policies announced that are seemingly aimed at making it easier for members of Generation Z to get into the property market in what has been labelled an anti-Boomer budget. However, some Gen Z members are of the view that they will struggle to save enough for a house deposit, due to the cost of living and the rising cost of houses.

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Treasury warns of inflation at 7.25pc

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Original article by Matthew Cranston
The Australian – Page: 4 : 13-May-26

The budget papers show that the Treasury’s base case is that the inflation rate will ease to 2.5 per cent in 2027, after peaking at a forecast five per cent in mid-2026. This is based on expectations that the price of crude oil will fall; however, the Treasury’s worst-case scenario modelling suggests that inflation will rise above seven per cent if a protracted war in the Middle East results in the crude oil price rising above $US200 a barrel in the September quarter. This would in turn reduce real GDP growth by 0.5 per cent over the next two financial years and result in an official unemployment rate of nearly five per cent in 2027-28.

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AUSTRALIA. DEPT OF THE TREASURY

$77bn tax grab

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Original article by Greg Brown
The Australian – Page: 1 & 11 : 13-May-26

The federal government’s budget papers show that the nation’s gross debt is set to exceed $1 trillion in 2026-27, while it is forecast to peak at 35.8 per cent of GDP in 2028-29. Net debt is in turn forecast to top $616bn by mid-2027, while the budget includes net tax increases totalling $77bn. Meanwhile, the government is set to post deficits for the next decade and will not deliver a balanced budget until 2034-35, although the latter is based on expectations of higher tax revenue and projected savings from NDIS reforms. The budget also includes a productivity package for the business sector; amongst other things, the instant asset write-off will become a permanent feature of the tax system, while the loss carry back tax offset will be reinstated; however, the government now expects its productivity growth target of 1.2 per cent to be achieved three years later than expected.

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Super funds set to avoid CGT change

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Original article by John Kehoe, Lucas Baird
The Australian Financial Review – Page: 1 & 6 : 1-May-26

The federal government’s widely-tipped changes to the 50 per cent capital gains tax discount are likely to affect personal investors who have held assets such as property and shares for more than one year. However, sources claim that the government has told superannuation funds that the budget on 12 May will not include any major changes that will affect them. This suggests that super funds’ current CGT discount on their earnings will be retained. Meanwhile, Treasurer Jim Chalmers has not explicitly ruled out exempting any existing assets from potential changes to the CGT discount, although he has indicated that any impact on such assets would be minimal.

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AUSTRALIA. DEPT OF THE TREASURY

Budget leak: Chalmers’ productivity centrepiece

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Original article by Matthew Cranston, Greg Brown
The Australian – Page: 1 & 4 : 1-May-26

Treasurer Jim Chalmers has indicated that the federal govenment’s budget on 12 May will include a "productivity package". There is growing expectation within the business community that the focus of this package will be reducing red tape, rather than major new company tax incentives. However, Chalmers is believed to favour making the asset write-off for businesses with annual turnover of less than $10m a permanent feature of the tax system; the instant asset write-off of up to $20,000 a year was extended for 12 months in 2025. Tax & Transfer Policy Institute director Bob Breunig contends that broader tax reform than simply extending the asset write-off is needed.

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AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN NATIONAL UNIVERSITY. CRAWFORD SCHOOL OF PUBLIC POLICY. TAX AND TRANSFER POLICY INSTITUTE

No longer a low-debt country

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Original article by Greg Brown, Matthew Cranston, Lachlan Leeming
The Australian – Page: 1 & 2 : 1-Apr-26

Former NSW premier Mike Baird notes that Australia’s state and territory governments now account for about half of the nation’s total public debt. Baird contends that the states need to be more accountable for the nation’s growing debt; he argues that treasurers should issue a fiscal statement ahead of their annual budgets outlining the consequences of their spending decisions for the coming 10 years, rather than simply the four-year budget cycle. Meanwhile, federal Treasurer Jim Chalmers has declined to make a commitment to produce net saving in the May budget, amid growing speculation that it will feature new government spending measures in response to the oil shock and cost-of-living pressures.

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AUSTRALIA. DEPT OF THE TREASURY

Budget bottom line improves but is still bright red

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Original article by Shane Wright
The Age – Page: Online : 17-Dec-25

The federal government’s Mid-Year Economic & Fiscal Outlook is expected to include a revised 2025-26 budget deficit of $36.8bn. This compares with the government’s forecast of a $42.2bn deficit ahead of the federal election in May. The MYEFO is also expected to show that the cumulative budget deficit over the next four years will be $143.5bn, down from the pre-election forecast of $151.9bn. Government revenue has been boosted by a range of factors, including a surge in the gold price, higher-than-expected iron ore prices and an increase in personal income tax.

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Australian Made welcomes unprecedented level of support

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Original article by
AuManufacturing – Page: Online : 1-Apr-25

The Australian Made Campaign has welcomed additional funding of $20m in the federal government’s budget. Amongst other things, this funding will allow the organisation to launch a new campaign to encourage more Australians to buy locally made products, and assist more local manufacturers and producers to obtain Australian Made certification. Prime Minister Anthony Albanese and Industry Minister Ed Husic have noted in a joint statement that research by Roy Morgan in 2024 found that more than 90 per cent of Australians have a preference for buying locally-made products.

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AUSTRALIAN MADE CAMPAIGN LIMITED, ROY MORGAN LIMITED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF INDUSTRY, SCIENCE AND RESOURCES

Foreign buyers to be banned from purchasing existing homes

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Original article by Remy Varga
Herald Sun – Page: Online : 26-Mar-25

The budget papers show that the federal government will impose a two-year ban on foreigners buying established homes, with the policy slated to take effect from 1 April. The budget has allocated $5.7m for the Australian Taxation Office to enforce the ban, while the ATO will be given $8.9m to crack down on ‘land banking’ by foreign buyers. The government will also expand the Help to Buy shared equity scheme for home buyers, and provide eligible construction industry apprentices with grants of up to $10,000 as part of its strategy to address the skills shortage that is contributing to the housing crisis.

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AUSTRALIAN TAXATION OFFICE