Workers win, wealth pays

The 2026–27 Federal Budget was for Australian workers. Having chosen the “hard road of reform”, while facing charges of broken promises, Treasurer Jim Chalmers sent a clear message to the people and families of Australia tonight: wage earners, first home buyers and younger Australians will come out ahead, while property investors, trust beneficiaries and older Australians will wear the cost.

The capital gains tax discount is no more, with the Government reverting to the pre-1999 inflation indexation model. Paired with negative gearing reforms that restrict the practice to newly built properties, the changes prioritise first home buyers and owner-occupiers over the long term, and existing property investors in the short term through grandfathering. The Government has framed the package as a matter of “intergenerational responsibility”. High-income earners, start-up employees and holders of non-property assets have drawn the short end of the stick.

Completing the tax reform trio, a minimum 30% tax rate will apply to distributions from discretionary trusts to adult beneficiaries. High-income families join high-income earners on the losing side of the ledger, with workers and younger Australians the intended beneficiaries.

The 13.3 million workers called out by the Treasurer tonight continue to reap the benefits of this Budget, with a $1,000 instant tax deduction for work-related expenses and a $200 to $300 one-off earned income offset.

Aged care participants stand to gain in the long term, though not in the short term. The private health insurance rebate has been lowered to around 21% to fund services, beds and facilities for Australians over 65. The trade-off will turn up the heat on fixed-income pensioners, who face higher insurance costs as a result.

A little late to the party, the NDIS also features in this Budget. Annual scheme growth is being capped at 2%, with 160,000 participants set to lose their place by 2030 and every existing participant facing reassessment. From October 2026, the $7,000 in social and community participation funding per participant will be replaced by the Inclusive Communities Fund.

The throughline is hard to miss. This Budget rewards wage earners and reins in the tax treatment of passive and structured income. If you’re in a family with investments, trusts or an older member on private cover, the planning implications are material and the start dates are not far off. Whether this Budget proves a fair reset or a costly miscalculation remains to be seen. For now, affected households have work to do.