The Point Live: Budget 2026 reaction - as it happened

On that note, let’s leave it here for today and come back for tomorrow when Angus Taylor will deliver his first budget-in-reply speech. He’s been shadow treasurer, but this will be the first time he gets to run the show.

He wants a return to ‘Howard era economics’ which means nothing in the absence of the rivers of gold which were flowing into the treasury from the mining boom.

But given he’ll never actually be prime minister, I guess he needs to get his jollies somehow, huh?

Join us tomorrow as we take you through the day – if you want. It’s OK if you would rather watch paint dry. I get it.

But thank you to everyone who followed along with us today – there are more and more of you every day and it means the absolute world that you are supporting this little project. We are slowly building it up to a real challenge to some of the mainstream outlets and that is all down to you. Thank you. (And I promise to get more eyes on the senate – I do take your suggestions and critiques seriously!)

Until tomorrow – take care of you. Ax

Here is how Mike Bowers saw QT:

Matt Grudnoff

While politicians and commentators argue over whether the negative gearing and capital gains tax changes will really slow house prices, today the share market has reacted to the budget.

Their verdict?

Bank shares are down with the Commonwealth Bank falling 9%, one of its biggest single day losses. Why the drop?

Banks are the biggest winners from rapidly rising house prices. More expensive houses mean bigger mortgages that take longer to pay off and that means people paying more interest on those loans.

Clearly investors think that these changes spell the end to rapidly rising house prices and they are marking down the banks because of it.

Sarah Hanson-Young:

“Big tech is closing in on Australia and our AI regulations are lagging far behind.

“Every day I am hearing from people who are concerned about the impacts of AI on our environment, water and energy supply. 

“Data centres that use massive amounts of energy and water are being proposed all over the country and it’s important that we understand what the impacts will be on the energy transition and water supply, including drinking water.

“We cannot repeat the mistakes that were made in failing to regulate the social media platforms before they got too big. Recently, we’ve seen the Government has been cosying up to global AI companies and trying to lure them to Australia. We need proper transparency and parliamentary scrutiny of the deals being done to ensure that it is the Australian community who benefit most from the expansion of the AI industry here.

“Communities across the country are rightly concerned about the massive growth in this industry in such a short amount of time. This inquiry will be a chance to hear from those who are fighting to protect their land, water, wildlife and biodiversity from being sacrificed to big tech. 

“We cannot allow Australia to become a dumping ground for energy-hungry data centres without proper scrutiny or public accountability or consultation, and that’s what this inquiry will provide.” 

Angus Blackman

Australians are crying out for big, brave reforms from governments. The long-overdue changes to housing tax concessions in this budget suggest the federal government may be starting to get the message.

On this episode of Follow the Money, Matt Grudnoff and Ebony Bennett discuss the government’s important changes to negative gearing and the capital gains tax discount, its “brutal” cuts to the National Disability Insurance Scheme (NDIS), and why some “broken promises” may not be such a big deal in the eyes of Australians.

(I keep calling poor Angus Blackman, Angus Taylor. He could solve this by changing his name)

Thank Dolly.

What did we learn?

Not a lot. The government is not under any pressure, because the pressure the opposition wants to put on the government is nonsensical.

Angus Taylor will deliver his response tomorrow and we already know what it will say. At this point, Labor will be in power for the next decade.

Keen readers of the Budget Papers (yes we do exist) know that Budget Paper 2 is where the real action is. Budget Paper 2 conveniently lists the juicy details on every single policy change announced on budget night. 

Had the Treasurer announced the policy change everyone really wanted, a 25% gas export tax, then Budget Paper 2 would have included half-a-page outlining the year-by-year break down of the additional government revenue. It would have also outlined the cost-of-living measures, or tax cuts, the policy change was funding.

While we can only guess if the money would have been used to put dental in Medicare, or deliver on Albo’s dream of universal free childcare, what can be estimated is how much extra revenue there would likely be.

Across the ‘forward estimates’  (a fancy name for the next four years) the 25% gas export tax would have raised around $66 billion. In the first year of operation, the tax would have raised over $19 billion, on the back of high global energy prices caused by the conflict in Iran.

In comparison, Budget Paper 2 contains no details on the PRRT since there was no policy change to fix the broken tax. Fear not, Budget Paper 1 shows that PRRT revenue will continue to fall, and raise only $6.5 billion over the next four years. While Budget Paper 2 likes to use nicely formatted tables of data, we think the Gas Export Tax vs PRRTcomparison works better as a chart, to show just how broken the PRRT truly is.

I do wonder about the need for government to subsidise the start up sector, given that most of the profits in these businesses tend to go to share holders, rather than workers, or the greater public. It has been suggested that start up subsidies should be treated a little like HECS – that if you start making money in your venture capital project, you pay back what the government had helped you with.

Chaney asks:

I support the capital gains tax reform for housing, but my community and I are concerned about its impact on the start up sector, which contributes significantly to productivity. The reforms announced could undermine investment in innovative, high risk, early stage businesses. I acknowledge your commitment to consult with stakeholders on this issue. Could you outline the consultation process and whether the government is considering a carve out for early stage businesses?

Chalmers treats the question seriously:

I do acknowledge that in parts of our economy, a very important part of our economy, the start up and VC sector, that there is more work to do, more consultation to do to make sure that we get the right set of arrangements.

And I wanted to acknowledge other members on this side of the house, including the member for Chifley and other members who I’ve been engaging with, the member for Parramatta is obviously across these issues and a bunch of other issues and other other colleagues as well. The budget is very supportive of venture capital in DC.

There’s a number of tax changes in there which are about supporting, assisting, encouraging, incentivising more of this really important part of the economy, but I do acknowledge that even before last night, this sector had raised some issues with us.

We had been consulting privately with the sector already before last night to make sure that we can get the right arrangements in place.

I say to this part of the economy, we think that you are a really important part of the economy in lots of ways, the hope of the side when it comes to dynamism and productivity, and we will reflect and recognize that in our policy, there are particular circumstances in this part of the economy when it comes to the calculation of the cost base for CGT, which is the concern that the member and other members, is reflecting my commitment to the sector, publicly and privately, has been to continue to work on these issues, to get the best landing that we can.

It’s a very, very small part of our economy, and so it’s not a big part of the changes that we are announcing, but it’s an important part of the economy, and our work will reflect that

Albanese gets asked by the member for Cook (I can not be bothered learning his name)

The prime minister has confirmed he has used negative gearing and the CGT discount. And the Prime Minister, I note, has bought a four point million dollar property in Cococabana. So why is the prime minister stopping the next generation of Australians from using the very opportunities he has personally benefited from?

Albanese is happy to take this one too:

What we are doing is precisely the opposite of the suggestion which he puts forward, I have had access to home ownership, and I had it in my 20s, and I had it because my mother had lived in the one public housing cook will cease and rejecting you say to me, when You get a chance in life, own your own home. It was drilled into me. It’s the aspiration that’s drilled into working class people, working class people who want the next generation to be better off than they are. And that is precisely what we are doing here precisely.

I’m proud that I wasn’t born to rule.

I’m proud that I work hard.

I’m proud I’m proud of what I’ve achieved, and that is why…in last night’s budget we made sure that we do not want to leave a generation behind, that we are not prepared to sit here and know that increasingly, young people are being priced out of the market.

And we will say it’s too hard to make this change, too hard to make this change, we’ll just occupy the space. But the other thing that we are doing, Mr. Speaker, is making sure that people can still negatively gear properties, and that they can as well apply the 50% capital gains discount if they wish.

The difference is they will buy a new home rather than an existing one, which means that, which means that not only are they helping their aspiration, they’re helping the aspiration of the country as well. They’re helping the aspiration of the country as well.

Going forward, our idea of helping young people is to do something practical that will help them get ahead. Their idea of the future of young people is having a ballot between Tony Abbott and Alexander Downer over, who will be the next leader of the Liberal Party. They are reduced to a farce Mr Speaker.

Tim Wilson is allowed to come back and ask another question.

Jack, earns $25,000 income and realises a capital gain of $10,000 the tax on Jack’s capital gain is 1400 equal to his marginal tax rate of 14% as Jack’s marginal tax rate is lower than Labor’s new 30% investment tax, Jack needs to pay an additional $1,600 in tax.

Prime Minister, why is this government stealing $1600 of Jack’s future home deposit and taxing lower income earners and undermining the tax system?

He is made to withdraw ‘stealing’.

Jim Chalmers takes this one:

The question is about the examples provided in the budget to help people understand the very important, very ambitious tax reforms which are in the budget that we released last night. An important part of that is about dealing with a big distortion that exists in our tax system, which makes it harder and harder for young people to buy their first home, particularly young people. And so what we’re doing with this tax package, what we’re doing with this tax package is better aligning the tax levied on people who work versus people who earn their income in other legitimate ways. And we’re leveling the playing field in the housing market.

I think any objective observer of our housing market how it interacts with our tax system would conclude that the combination of those two things is making it too hard for Australians, particularly younger Australians, to get a toehold in the housing market. Mr. Speaker, and so that’s why we are making these changes.

We understand, we understand that those opposite are heading towards making the same mistake that they made at the last election in repealing saying that they will repeal our tax package. Our tax package gives tax cuts to 13 point 3 million workers. Mr. Speaker, for anyone who’s looking for evidence that they haven’t learned a thing and they haven’t changed a bit, they’re coming back to the world, Mr. Speaker, and saying that they will repeal our tax package.

Now, Mr. Speaker, the question from the Shadow Treasurer is about capital gains. Now I want to tell the house what the Shadow Treasurer wrote in his own book about capital gains. This is what he said.

Dan Tehan gets up – he wants to know about Jack! WHAT ABOUT JACK!

There is much laughter and Chalmers says that Tehan “might not think the shadow treasurer’s views are relevant, but I do”.

They’re very relevant to Jack and the example that we provided in the Budget papers, because this is what the Shadow Treasurer said, quoting capital gains from appreciation of holding assets is taxed at half the applied rate, effectively entrenching the benefit of having and holding assets, which can only exist If you’re established there’s no intergenerational justice in such preferential arrangements. That’s the Shadow Treasurer now, Mr. Speaker, also relevant to Jack and his wife, the Shadow Treasurer said in the parliament, Mr. Speaker, this is what he said today. It’s time to be honest. The tax system is screwing over young Australians. Instead, it favors well off established interests against those trying to get ahead. People who can predominantly live off income from their assets can pay very little tax and get discounts on capital gains from interests in asset values. This is what he said, Mr. Speaker, I’m quoting young Australians need to demand a fairer tax system where they aren’t the only ones carrying the burden to cover the cost of Australia.

On the substance of Wilson’s question, Chalmers says:

Now when it comes to the migration numbers in the budget and the housing numbers in the budget, it’s very inconvenient to those opposite that when we came to office, the net overseas migration number was surging, and what we’ve been able to do in the four years that we’ve been in office is to see net overseas migration come down 45% off its peak, and there are additional steps in the budget to put more downward pressure on net overseas migration, Mr. Speaker, so 45% down from the peak, after the surge that we inherited from those opposite.

Mr. Speaker, that’s on the net overseas migration numbers down 45% from their peak. In the last full year, they came in 30,000 fewer than the Treasury forecast budget. So we’ve been managing that down. Mr. Speaker, obviously there are calculations around departures and the like, which are altering the forecast this year and next year, but overall, net overseas migration has come down. I didn’t see you mentioning that when you’re traipsing from disappointed door to disappointed door in Farrah. Mr. Speaker, that’s the first point.

The second point, Mr. Speaker, is this. The second point is this. And the housing minister just made this point, I think, in a very compelling way, our budgets, not just the budget on Tuesday night, but all of our budgets…So the point that the Housing Minister was making is that our big investments in the budget on Tuesday night in housing supply were not the first time that we had come to the table with very substantial investments, an extra $2 billion in the budget means an extra 65,000 homes because it invests in the small scale infrastructure, the drains, the power infrastructure, the local road infrastructure, to get more projects over the line.

So that’s just the latest installment. That’s just the latest installment in this government’s enthusiastic investment in trying to make up the lost ground from the decade of those opposite doing almost nothing when it comes to housing supply. Now, Mr. Speaker, if I’m asked about housing and I’m asked about progress that this government has made, let me give you a few sets of numbers, dwelling commencements are up 26 per cent.

They were falling 28 per cent under those opposite dwelling building approvals up 13 per cent. They were falling 21 per cent under those opposite dwelling investment up five and a half per cent, falling 3.6 per cent under those opposite we know that there is more work to do to build more homes for local communities, and that is why there’s extra investment in the budget.

Tim Wilson who launched on to the national scene by helping to tear down the 2019 Labor campaign which had some of these changes as part of its platform, has been struggling with not being able to land a finger on Labor in 2026 with most people on board with measures that make housing achievable.

So he has pivoted to asking about migration.

Since labor came to office, 1.4 million people have arrived in Australia. This year alone, the government is also building 77,000 homes behind its housing target. Treasurer, where will all these new migrants live?

Chalmers, who is also feeling pretty buoyant fires back:

I hope the Shadow Treasurer is aware that when he blows on the dog whistle, they can hear it in Goldstein too.

And when and when the Shadow Treasurer said he was prepared to be in a government with one nation. I think they heard it in Goldstein.

It seems to be all they have. Because they are in favour of the NDIS cuts and don’t want people getting any more money back or for the government to pay for services – they have been left with almost nothing except the ‘broken promise’.

Ben Small, the Liberal MP for Forrest is also booted out.

Angus Taylor:

My question is to the Prime Minister, can the Prime Minister confirm that 35,000 fewer homes will be built as a result of Labor’s new taxes?

(sigh – it is a tax change, not a new tax)

Albanese:

What I what I can confirm, is, as a direct result, there in the Budget papers, increase housing supply by at least 30,000 30,000 as a direct result, the $2 billion local infrastructure fund will support up to 65,000 new homes over the decade.

Budget paper number one, statement four page, 158 quote, the measures in this budget are expected to improve home ownership and increase the overall supply of houses. That is what we are doing this, $2 billion additional takes our homes for Australia plan to $47 billion helper.

So whether it’s increased public housing through our housing Australia, Future Fund opposed so strongly by those opposite, whether it whether it is private rentals through our build to rent scheme, whether it be our Shared Equity scheme, whether it be our support for local infrastructure, or whether it be the changes that we are proposing, which will ensure that people who want to negatively gear an investment property in the future will invest in new supply, therefore benefiting not just themselves, but benefiting the nation as well. All of those measures, every single one of them, is about boosting supply as we go forward, but we’re doing more than that as well, because we’re reserving a whole range of those houses for first home buyers alone, making sure that we deliver on successful programs that are underway right around the country.

But in addition to that, of course, we’re making sure that the workforce is there to build those houses. That’s why we have free take that’s why we have a $10,000 incentive for construction apprentices or for electrical apprentices as well.

All of it opposed by those opposite, those opposite who didn’t even bother to have a Housing Minister during most of their time in office. Now we want to make sure, we want to make sure that we continue to give Australians a fair crack going forward.

Those opposite have blocked every single housing measure that we’ve put forward. They delayed a whole range of them, along with their friends in the Senate. What we’re doing, what we’re doing order members on my left is moving forward. Labor is a party of aspiration, and this budget last night shows that

Jack Thrower

Last night, the budget announced a $250 Working Australians Tax Offset (WATO), which basically means workers can earn an extra $250 tax free. 

Deputy Liberal Leader Jane Hume has labelled the WATO a “great con”, dramatic language similar to Angus Taylor calling last year’s tax cut announcement a “cruel hoax”. 

In fact, the WATO, while small, is a pretty good idea. In economic terms, labour income (income from working, like wages and salaries) are much more equally distributed than capital income (income from owning things, like rent, interest, dividends, profits etc). In other words, most people make their money from working, not just collecting dividends and rents. Things like the WATO are good because they only give a tax cut to people making their money from working.

As you can imagine, the first question from the opposition is on….broken promises. I am SHOCKED. SHOCKED I tell you.

This is a change in our policy, and I’m upfront about that.

But unless we act now, we’re looking at a generation missing out, and indeed, someone who was appointed by the Leader of the Opposition had this to say when reflecting about how their political party was going, I quote, ‘We were timid. We weren’t prepared to lean into the challenges and the lived experience of the next generation of Australians.’

I’m quite happy to put things up that will robustly challenge the status quo if it means we’re going to build…

The LNP’s Phil Thompson is booted for holding up a prop. Albanese is in a good mood and enjoys it, continuing with no problem:

In February, words of wisdom and reflection from the Shadow Treasurer [Tim Wilson] words of wisdom and reflection, Mr. Speaker, when reflecting on how well they were going in replacing the former member for Farrah as leader for this bloke here….

Taylor has a point of order that is not a point of order. Albanese wants to keep going so he lets it play out.

He is fired up and invigorated – he feels like this is a winner. Which means the response, despite the media’s screaming about BROKEN PROMISES has been largely positive and it also means that he can position himself as standing up for younger Australians, which he obviously feels is firm footing.

It’s almost like addressing inequality is a….net positive? That reform that helps people is good?

Albanese:

Mr. Speaker, well, when I talk to young Australians who are this close to giving up any opportunity to aspire to own their own home, when I speak to their parents and grandparents who say that they are worried that their children and grandchildren will never be able to own their own home.
What we are not prepared to do is just sit back and kick the can further down the road. What we are doing is acting, acting in support of aspiration, acting in support of growing the economy, acting in support of housing supply.

Because the difference between investing in an existing home with negative gearing is it benefits the investor, but if you invest in a new home, it benefits the investor and it benefits the nation

Seems that disconnect between media and how people feel about it is fairly strong:

I asked for your takes – and you delivered. Here is what some of you are saying about this budget:

Jonathan Green has written this for his substack (and remember – subscribe if you can – the numbers matter, even if you can’t pay) around the media’s obsession with broken promises:

The accusation is now being made repeatedly: they lied. It’s the wrong framing. Journalists in the post-budget flurry should rather be wondering whether any other course was possible.

Yeah OK, that would border on being reflective, but still.

The question is not whether the government lied about its intentions on the now-changed tax concessions, but rather whether the system of our politics is so broken that it is impossible to openly pursue change that might carry negative impacts.

To parse that further, this applies particularly to an even more specific kind of change: change that runs counter to the political program of the third force in Australian politics, the conservative, in particular Murdoch, press. Or, to take that yet another step, change that offers that media group the potential to wage a purely political campaign against progressive politics.

It would be one thing for media to argue against budgetary change on behalf of a particular public constituency … and obviously the changes made in this budget carry that risk, and yes, that case is being made on behalf of those people.

But it’s another thing entirely for media to argue against change purely to pursue a political position. In our soup of media and politics the two are constantly conflated, and the possibility that change might actually constitute good policy even if it brings partial disadvantage, is lost.

You can read the rest, here.

Here is how Bowers saw the press club address:

Matt Grudnoff

Chalmers is asked about the impact of the changes in capital gains tax on young people who are spending longer saving for a deposit and are investing in the share market in order to grow their deposit faster. The changes will mean they keep less of those capital gains.

This is a bizarre argument. The reason that young people are investing is because it is so hard and takes so long to save a deposit.

Young people are not saving for a deposit so they can invest money, they’re saving for a deposit so they can buy a house.

These changes will make housing more affordable. That will make it easier to save a deposit.

The bottom line is young people would rather it was easier to buy a home than it was easier to invest for a deposit to buy a home.

Chalmers is asked whether the CGT changes to shares will make it harder for younger Australians to build wealth.

He says:

What we’re doing is removing the distortion in the capital gains tax system, and as I said before, in a response to an earlier question, if you look at a couple of decades of averages, what we’ve seen is that shares have been under compensated for in the old system.

What we’re trying to fix here is this big distortion introduced in 1999 and what that distortion meant was more and more people getting into buying established homes rather than getting into the share market. You can actually see since that 1999 change, a change in the way, in Australians appetite to invest in the share market.

And so it’s entirely possible, depending on that person’s circumstances, their marginal rate, how long they invest for what kind of shares they’re invested in. You can’t create a blanket arrangement for every different circumstance, but it’s entirely possible that by removing the distortion that we make shares more attractive, rather than less.

It also should be pointed out for the majority of Australians, the only investment they do is through their super funds. In that they don’t invest – their fund does. And while younger Australians are attracted to risky things like crypto and the like, part of that has been because psychologically they can’t imagine ever owning a house. So surely if people start thinking that maybe they could actually buy a house – they probably won’t be as attracted to other riskier ways of making wealth.

Rod Campbell 

The mining industry’s favourite fossil fuel subsidy is growing far faster than the NDIS, Job Seeker and other major expenses in the budget. The Fuel Tax Credit Scheme (FTCS), which refunds fuel tax and most benefits mining companies, is expected to grow 45% from this year to 2029-30, more than any of the social programs:

While most Australians pay 45c tax on every litre of fuel we use, the mining companies pay nothing thanks to the FTCS. Agriculture, fishing, trucking and other industries also benefit, but the biggest winners are the big iron ore and coal miners like BHP, Rio Tinto, Gina Rinehart, Clive Palmer and friends.

The chart shows that the cost of the FTCS is a super-high 45% when measured from 2025-26, but a just very-high 19% when measured from 2026-27. That’s because the Government reduced fuel tax for all users in response to the USA-Israel-Iran war, meaning that the tax break to mining companies was worth less.

Either way, it’s growing fast and costing the government billions – $10.7 billion in 2026-27. 

But you never hear about the “exploding” costs of tax breaks for mining companies. The dramatic adjectives are only ever applied to support for disabled people or the unemployed, who the government has chosen not to support in this budget.

Jim Chalmers then gets this question:

I just want to take a broader look at your decision to change negative gearing and CGT and the implications that has on your government and the complexion of your government. The reasons you’ve given today is that the young generations are locked out of the housing market.

That was apparent abundantly before the last election. So abundantly in the Prime Minister’s words, we asked him and you and others at least 50 times whether you’re going to change these tax arrangements, and you said, No, a lot of people were compelled to vote for the Albanese government in 2022 and again in 2025 because of that promise of openness and accountability and integrity, you will be a different government.

These are people who heard, never, ever a GST. They heard there will be no Carbon Tax. They heard no cuts to the ABC no cuts to the SBS, and then they heard an opposition say, we’re going to be different. Won’t those voters wake up this morning and say you’ll be different? You’ve just proved you’re just another lying government.

Good grief.

Jim Chalmers:

Look to be frank with you, we expect that that charge will be levelled at us. It’s not unexpected, and to the extent that we have changed our position on these policy areas, it’s not especially unfair for people to point out that the position that we put last night in the budget is different to the position that we held and expressed 12 months ago. The comments that we made in the last election reflected our position at the time, which was that we thought we could do enough in the housing market to focus overwhelmingly on supply and with the 5% deposits.

And it’s become increasingly clear to us that in addition to doing all of that work that we needed to take on this status quo, which is locking people out of the housing market, and make some difficult changes. We know that that brings with it political controversy. We expect the view that you just put in your question mark to be put to us. We obviously knew when we took this difficult decision that people who didn’t want to engage on the substance of this issue will engage on the politics of this issue. So we knew that I think the worst thing would be to do, the worst thing to do, the easier thing to do would be to leave things as they are, and understand that the longer we leave things, the worse they get.

And so my view, and I know that some people will have a different view, but it would have been easier, but wrong, to leave these arrangements in place for longer and leave it to someone else to fix them. And it is my view, increasingly my view, and I think I’d be very surprised if people here didn’t share this view, that there is a growing sense and accelerating sense in our society, and societies like ours around the world, that there is a huge risk of people feeling disconnected and disregarded when it comes to our economy, and in my view, The prospect of more people losing hope, or more people losing connection, is a problem which transcends all of the others, including the political considerations you’ve put to me.

Rayna Fahey, Executive Director of Prosper Australia also has some thoughts on the budget:

Treasurer Chalmers has taken a small but welcome step toward ending the tax bias that rewards speculation over work. But Australia still needs bold, comprehensive tax reform that shifts the burden off earned income and onto unearned gains.

Young Australians should be able to choose meaningful careers in teaching or nursing without being locked into a lifetime of renting and financial insecurity.”

Luke Slawomirski

It’s worth updating the total cost of the private health insurance (PHI) subsidies through the ‘PHI rebate’. 

The rebate itself will be $7.86 billion this year (Table 6.8.1). But the cost also includes the direct revenue foregone through the rebate ($1.55 billion Table A.5.1) as well as exemptions from the Medicare Levy Surcharge – estimated at about $3.3 billion.

This brings the total cost to the budget of the rebate is about $12.7 billion – although this will reduce by about one billion when the entitlement is aligned across age groups from April 2027.

So what are we getting for our dough? 

A key selling point was that higher PHI uptake would take the pressure off public hospitals. But there’s little evidence it did that – mainly because, for all their talents and skills, surgeons and other specialists can’t be in two places at one. Hence, every private surgery means a public surgery foregone (and vice versa). 

Another selling point was that it would increase uptake among disadvantaged households compared to the more privileged set. ABS data seem to suggest that this hasn’t been achieved either.

——————-

Matt Grudnoff

Jim Chalmers is asked about the modelling around the impact the changes in negative gearing and the CGT discount will have on house prices. The modelling says very little.

This is a classic case of the wrong tool for the problem.

Economic modelling is great for some issues and terrible for others. In particular economic modelling is bad at modelling speculation.

This is because the model assumes that everyone has perfect information. That means that it assumes that everyone knows what the price of property is now, and what it will be in the future.

So, in the model there can be no property speculation because everyone in the model knows exactly what the prices are going to be in the future.

But at the moment in our housing market, the problem is that there is lots of speculation. People are betting that house prices will continue to rise quickly. If they’re right, they make money and if they are wrong they won’t.

But if everyone knows what the prices are going to be they factor that into their investment decisions. The small change in future prices the model spits out is because there is a small change in taxes.

But if property prices slow, then speculators who are betting on fast increases will get out of the market. If they do this that will further slow house prices. The economic model simply doesn’t capture this change in speculators behaviour.

Using economic modelling to predict house prices is a bit like using a saw to hammer in a nail. Wrong tool for the job.

I would take the economic modelling results with a big grain of salt.

Jim Chalmers has been asked about why Treasury always underestimates net migration rates.

Chalmers:

Well, first of all, it’s not the case that Treasury has always underestimated. In fact, I think in the last full year, net overseas migration came in 30,000 people fewer than the Treasury forecast. I’ll check that in case I haven’t got that quite right, but that’s my off the top of my head, I think it came in lower last full year than what the Treasury was anticipating. And so there’s the usual amount of uncertainty about forecasting a range of numbers in the budget, including that one, what we’re seeing this year and next year is more a reflection of fewer people departing Australia, rather than another spike in arrivals, like we saw, which began before we came to office.

And so there is a little bit of volatility in those numbers, but, but we see volatility in other forecasts as well that’s gone in both directions from memory, in the treasury forecast, and there’s a couple of measures in the budget which are about putting downward pressure on that net overseas migration number a bit further. The most important thing for people to remember, including people, not you, of course, but people who seek to politicise the migration system for the most divisive reasons, is net overseas migration has actually come down 45% from its peak when we came to office, net overseas migration was surging. We got that down by 45% back closer to more normal levels. We still expect it to normalise over the course of the next couple of years, but fewer departures are complicating that story.

Sky Political Editor Andrew Clennell tries talking like a cool kid, but the Treasurer’s not copping it.

Clennell:

This budget has a big new tax taker, more than $100 billion over 10 years from your new taxes and, according to Treasury’s modeling, the policies increase rents and only lower the growth in cost of a median home by 19 grand on top of this, myself and the older people in the room here can negatively gear now on existing property, but young people can’t anymore. So when it comes to young people in this country, are you really on their side? Or, as young people would say, is it all about getting that bread for the tax man?

Jim Chalmers:

Are you sure young people say that, Andrew?

Matt Grudnoff

Jim Chalmers is asked a question about spending and taxing and the budget outcome.

It always amazes me the obsession that politicians and the media have with budget deficits and surpluses. For them it is the single most important part of the budget.

But the general public doesn’t really care. The Labor Government ran two surpluses in its first two years of government. The collect response from people was a shrug of the shoulder.

How much the government taxes and spends is important but not for all of reasons the media talk about.

What are most Australians are interested in? Are there lives getting better or worse. A government that works to do that is going to do well.

Liberal Senator Andrew McLachlan has reflected on his party’s crushing by-election defeat in Farrer on the weekend, in a thoughtful piece in The Guardian.

He argues that it was a mistake for the Liberals to preference One Nation, who made history by winning the seat, because:

“It signaled to the electorate and the broader Australian community that we accepted their rhetoric. To many, it indicated in the future we might enter into a coalition with them. The consequence was a loss of confidence in the Liberal brand.”

He warns “Adopting a One Nation outlook will not win us any friends in our cities. Our initial foray down this path, with the abandonment of net zero and now excessively strong language around migration, has failed and further alienated us from the seats we must win to form government.”

Senator McLachlan joins former MP Keith Wolahan among the more moderate Liberals doing serious thought about the party’s future and direction. In a long and data-driven piece of analysis, Mr Wolahan agrees that the Liberal Party must win metropolitan seats if it is to win government:

Senator McLachlan says that, like Odysseus, the Liberals must navigate between Scylla and Charybdis. Perhaps Christopher Nolan has put the Greek epic in everyone’s minds; earlier this year I compared Prime Minister Anthony Albanese to Odysseus sailing past the sirens.

There is a lot of talk about broken promises. To be clear the government went to the last election saying it wouldn’t change negative gearing and the CGT discount.

I think what this highlights is that governments and oppositions shouldn’t make stupid promises not to change things. Particularly when they are things that really need to change.

Housing affordability is the biggest issue facing Australians and successive governments have not put up policies that have had any real impact. These changes will make a difference.

The other important point to make on broken promises (but you won’t hear this from the government or opposition) is that broken promises are only a problem if the public don’t like the change.

The stage 3 tax cuts are a case in point. That was a broken promise but one that the overwhelming majority wanted broken. After they made the change, the opposition complained and then ultimately voted for the change in parliament.

During the next election campaign, the government even trumpeted the change and the opposition never talked about them again.

So, is this change popular? I think that more people are concerned about housing affordability than they are about people who want to make money from the housing market. Time will tell if this is the case.

Treasurer Jim Chalmers, in his Press Club address, just said there are always more worthy ideas than money to fund them.

This highlights the problem that Australia has. We are a low tax country, and the government could do so much more to improve the lives of Australians if we simply became an average tax country. Doing that would raise about $140 billion per year.

Think of all the good ideas we could fund with that money.

A good place to start would be a 25% tax on gas exports. That would raise $17 billion a year.

Quick reminder that the exorbitant fees you pay your private specialist (if you can get an appointment) is helping to fund a lot of negatively-geared investment properties.

Professor Brendan Murphy – nephrologist and former Australian Chief Medical Officer– has called specialist fees a challenge of our time and argues that it’s driven by a sense of entitlement.

One could call it eminence-based medicine.

The Treasurer is giving his annual press club address from the Great Hall at Parliament House.

He begins by trying to mount an argument that the nation is better off now than it was six months ago.

It’s a big call. But he has some numbers to back it up.

Jim Chalmers:

Last night’s budget was $44.9 billion better off compared to our mid year update just in December, and more than a quarter of a trillion dollars better than what we inherited when we came to office. Gross debt is $173 billion lower next year and lower in every single year compared to when we came to office. It will peak nine percentage points of GDP lower as well. It will peak earlier and lower. That means we’ll avoid more than $70 billion in interest payments on the debt.

Prime Minister Anthony Albanese was pressed on ABC radio about the WATO (which sounds like a nickname for someone whose surname is Watson) failing those don’t earn enough to to pay tax.

Question:

There are around 4 million Australians who fall below the income tax-free threshold. That’s a lot of part time and casual workers. They’re probably the ones who could really do with a bit of assistance to help with cost-of-living and they’ll miss out. Why do those working Australians miss out on this support?

Prime Minister:

Well, if they fall below the tax-free threshold, they literally are not paying tax by definition. So, it’s pretty hard to provide tax cuts to people who don’t pay tax.

(A reminder that everyone pays tax in Australia – that’s what the GST does)

Independent Member for Wentworth Allegra Spender has cautiously welcomed proposed cuts to the NDIS, saying the proof will be in the government’s ability to actually implement the changes which will bring about the “savings”.

The NDIS reforms are needed but come with a big asterisk – we can’t bank them until
delivered. We needed broader spending reform and frankly low hanging fruit like the Electric
Vehicle FBT exemption, and the suburban rail loop weren’t picked.

She says the changes to capital gains tax and negative gearing will start to tilt the the tax system back towards owner-occupiers, away from from property investors.

Tilting the balance towards owner occupiers is a start, but the job on intergenerational
equity is only half done until we reduce income tax rates for wage and salary earners. That
must be central to the tax reform agenda. The current burden on young wage earners is not
only unfair, but also unsustainable. The Government should commit now to returning any
extra tax revenue as income tax cuts.

I support the negative gearing changes and the principle of minimum taxation of trusts but
will be consulting my community on any unintended consequences of how this is done. We
must be confident that proposals such as the revised CGT discount won’t undermine
productive investment in start-ups and high-growth enterprise, and it is now up to the
Government to make the case, consulting with stakeholders and finding a package that
balances fairness and prosperity.

The mining industry’s favourite fossil fuel subsidy is growing far faster than the NDIS, Job Seeker and other major expenses in the budget.

The Fuel Tax Credit Scheme (FTCS), which refunds fuel tax and most benefits mining companies, is expected to grow 45% from this year to 2029-30, more than any of the social programs:

While most Australians pay 45c tax on every litre of fuel we use, the mining companies pay nothing thanks to the FTCS. Agriculture, fishing, trucking and other industries also benefit, but the biggest winners are the big iron ore and coal miners like BHP, Rio Tinto, Gina Rinehart, Clive Palmer and friends.

The chart shows that the cost of the FTCS is a super-high 45% when measured from 2025-26, but a just very-high 19% when measured from 2026-27. That’s because the Government reduced fuel tax for all users in response to the USA-Israel-Iran war, meaning that the tax break to mining companies was worth less.

Either way, it’s growing fast and costing the government billions – $10.7 billion in 2026-27.

But you never hear about the “exploding” costs of tax breaks for mining companies. The dramatic adjectives are only ever applied to support for disabled people or the unemployed, who the government has chosen not to support in this budget.

As the Treasurer acknowledged last night, “the world is throwing a lot at us”. Chalmers is certainly right about that. As he said: “War in the Middle East has been pushing up prices, pushing down growth, and punishing Australians”. 

That passive construction of “war”, though, is doing an awful lot of heavy lifting.  

The Treasurer was forthright about the costs and the impacts of that war, and about the uncertainty that continues to surround it. Of course Australians “didn’t decide when this war began and have no control over when it will properly end”. What the Treasurer was much more reluctant to state plainly was…who did start the war, and who has control over ending it. 

That brazenly illegal war was started by Australia’s most important security ally. It was started by President Donald Trump. And President Trump is continuing it. 

The reason prices are going up, the reason growth is being pushed down, the reason Australians are being punished, the reason the budget must respond to “global uncertainty”?  

Donald Trump. 

It’s not unreasonable for the Treasurer not to name Trump specifically. Why provoke him, when that would only end in unnecessary pain and distraction? We know how Trump responds when allies do something he doesn’t like. 

But while that might be understandable, the actual, material response to that “global uncertainty” is only making Australia more vulnerable to said global uncertainty. Arguably, it is encouraging it. We are fighting the costs of war on the one hand and contributing to them with the other. 

In this budget, defence spending is going up. Defence is getting “an additional $53 billion over the next decade”, and a sizeable chunk of that will be spent on Australia’s alliance with the United States. 

The Treasurer spoke of the need to increase Australia’s “resilience” in the face of “global uncertainty”. But when it comes to defence spending, the Australian government is tying us ever closer to…the source of that uncertainty. 

Put another way, Australia’s most important security ally is the source of the “global uncertainty” the budget must respond to. So, the budget is spending more money on deepening our relationship with our most important security ally. Which is the source of global uncertainty. 

The math isn’t mathing. 

As Ben Doherty outlined in The Guardian this morning, a big chunk of this increase is more funding for the Aukus submarine deal: $430m over four years. The Australian Submarine Agency will now get $2.13bn over the four years til 2028-9 (a decent jump on last year’s forecast of $1.7billion). 

All of that is an attempt to shore up the Aukus deal, which is flailing on multiple fronts. It’s stubbornly throwing more money at our “most important security ally” even as Australians are going cold on that ally – for very good reason. 

Recent polling research found 59% of Australians now believe Australia’s interests are better served by a more independent foreign policy rather than a closer alliance with the United States. 

This budget does not reflect public sentiment. 

Instead, the Australian government is aiming to build resilience by spending more money on the very thing that’s undermining our resilience. 

Another growth in the Budget Paper that really get through why the government is feeling brave enough to change the capital gains tax and negative gearing is the age of home ownership rates

Back when boomers were in their 30s more than two-thirds owned a home; now it is half (actually almost certainly less than that now given the latest figures are 2021)

The Libs are out talking loud about housing supply. It was their big line earlier this year when the Senate had an inquiry into the Capital Gains Tax Discount

IN that report the Liberal senators said:

“Supply of housing has collapsed in Australia as the population has surged. Supply is at the heart of the housing crisis, as repeatedly stated by representatives from the housing sector during the hearings’

And then 4 sentences later they wrote:

“The Coalition believes the current CGT discount is working as intended and should not be changed. It supports more investment, provides an incentive for new construction, and helps boost housing supply”

So apparently the CGT discount, which has been in place for 26 years, was working as intended and boosting supply at the same time “supply of housing has collapsed”.

Glorious.

These are basically the CPI figures but for wages. 

And the news is that in the year to March private sector wages grew 3.2% – down from 2.4% in the year to December.

What that means is sorry RBA but there ain’t no wages breakout!

The quarterly figures show a very big drop in public sector wages growth.

So sorry Tim Wilson –spending on public sector workers is not driving inflation:

I’m just going through the budget papers (because clearly I have made some wrong life choices to get to this point)

If you are wondering why the govt has decided to do something about the capital gains tax this chart form the Budget Papers give away a fair idea. 

Up to 2006 around 70% of Australians were living in a house they owned (or were paying it off). By 2021 it had fallen to 67% – which given the pretty flat level prior to then is quite a drop.

Even worse is that since 2021 we know these numbers will have fallen even more because since 2021 average dwelling prices have risen around 32% in the same time that average household incomes have gone up around 18%.

That is a brutal hit to affordability.

Also in that press conference, you can see what happens when politicians for One Nation is put under any sort of pressure to answer for themselves and their comments.

Malcolm Roberts, the right hand loyalist to multi-millionaire leader Pauline Hanson, responded to a question about whether the abhorrent terrorist attack which killed 15 Jewish people on December 14, as they gathered to celebrate the start of Hanukkah at Bondi Beach was a “false flag operation” by saying he was “not ruling it out”.

There is no evidence to support the question or the damaging claim. Instead of pointing that out to social media personality Lisa Jane Spencer as she filmed him, Roberts said:

If I make a statement, it’s got to be backed by fact, and I don’t have the facts yet.

I’m not ruling it out. I doubt whether there was a false flag, but it was a bit afterwards when the laws came out.’

Roberts went on to say:

There are so many things in the last 30 years, but especially with Covid, that they seem to arrange something and then the laws would come.

I can acknowledge that point.’ 

He has come under criticism from all sides of politics and groups, including Dave Sharma and Allegara Spender. Today, asked about it at a press conference, Roberts began shaking and claimed he had been “taken out of context” and then blamed the media. He also claimed that he was only being “gentle” with an inexperienced questioner.

As someone who has been on the other side of Roberts’ rants quite a few times when he doesn’t actually want to talk about something, I can attest to the fact that he never has an issue telling people when he disagrees with something. Quite vehemently.

Hanson has to jump in to save him:

This has made me spit out my tea with laughter this morning. Some changes to the housing tax settings have upset the multi-millionaire Pauline Hanson. She feels this is – REDISTRIBUTING WEALTH! Which is BAD according to Hanson. Because multi-millionaires like Hanson should not have to pay more tax than they feel like paying!

This comes after Barnaby Joyce said earlier in the week that he admired the Singapore government’s way of doing things – Singapore which has a (soft) authoritarian government. It might be classified as a representative democracy, but The People’s Action Party has ruled Singapore since 1959. Political scientists would call that a ‘managed democracy’ – in that the democracy is managed by ONE party.

Anyways, here is multi-millionaire Pauline Hanson very upset about changes to the tax system because they will REDISTRIBUTE WEALTH

This Budget invests in parts of the care system – especially Medicare, hospitals and aged care – but pays for much of that by putting the NDIS on a much tighter leash.

The question is whether services outside the NDIS, particularly foundational supports for children, will be built quickly enough to prevent reform becoming rationing by another name.

Yesterday, I wrote about the need to consider the social determinants of health – the conditions in which people are born, grow, live, work and age. That means looking beyond the health portfolio to housing, homelessness, schools, income and the cost of living.

The Budget recognises some of these pressures. But overall, it still reads more like a budget for managing downstream demand than preventing it. 

It’s silent on the big public health challenge of our time: obesity. 

The housing measures are welcome, particularly the $59.4 million over four years for youth homelessness support. The changes to capital gains tax should also improve housing security for younger households by reducing tax incentives to buy existing dwellings as investment assets, while preserving stronger incentives for new builds. But a significant new investment in public housing is lacking.

Schools funding and skills investment also matter for long-term health because education shapes income, employment, health literacy and life chances. But these are largely continuations of existing agreements rather than a major new agenda.

So the prevention gap remains. The Budget continues to fund medical interventions, but does less to change the social conditions that drive demand for those in the first place.

Jim Chalmers said this last night too – that the property tax changes were not something under consideration for a very long time and were decided in the last couple of weeks.

There is two reasons for that – one, all the research and polling and focus groups showed housing inequity was becoming such a major problem that it was creating giant waves of anger too large for the government to ignore. And two – because it makes it easier to fend off the ‘broken promises’ claim – we only just decided because circumstances changed is an easier sell to a media obsessed with this than ‘yes we were thinking about this for a long time and having massive fights behind the scenes to get it across the line, even though we said we weren’t considering this at the election.’

Both can be true.

Here is the formulation Jim Chalmers has come up with this morning (this was in an interview with ABC News Breakfast but it is the same everywhere)

The emphasis for most of the life of this government has been on building more homes and that’s still the primary focus. But it became increasingly clear to us that even though the problem begins with not having enough housing supply, it doesn’t end there. Too many young people are locked out of home ownership in particular, and the steps that we took last night, which we understand are contentious, they’re difficult decisions, they are about trying to level the playing field for first home buyers, and particularly younger Australians who’ve been locked out for too long.

The founder and organiser of housing advocacy body, House You, Chels Hood Withey has some thoughts about the budget:

This budget starts to reset this hellish endgame Monopoly, but it doesn’t flip the board. We need public housing.

For 25 years, negative gearing and the capital gains tax discount gave us endgame Monopoly funded by our tax dollars, a small few owning all the land, hoarding all the homes, squeezing everybody else tighter and tighter for access to a basic human right.

This budget starts to reset the game, but it doesn’t flip the board. Keeping negative gearing for existing investors means everyone already hoarding houses keeps their tax break, that doesn’t change their behaviour driving this crisis.

Abolishing the CGT discount is the biggest change to celebrate, won by community organising and people power. It’s a strong start to shifting this country’s unhealthy obsession with housing as a wealth-building tool, and treating housing for what it is: a place everybody should be able to call home.

Now we need to deliver public housing at scale. Beautiful, publicly owned homes, forever accessible and stable. So everybody gets a house.

The former Liberal senator is speaking on behalf of the banks as part of an ‘industry alliance’ for big business. But don’t you dare call any of these lobby groups which lobby and fight and advocate for their members for what they consider to be better conditions anything close to a… *gasp* UNION. It’s always very amusing (if you don’t laugh, you would cry) at how these business and corporate lobby groups are treated as very serious, objective bodies who have no skin in the game, as opposed to unions, which obviously are exceptionally biased and don’t know what sensible policy is. For everyone who loves to label journalists who take a more progressive stance on policies as ‘activists’ what do we think The Australian Financial Review, which is literally the paper of capital, targeted at the wealthiest people in the country, does? What about The Australian, which is owned by a billionaire? Same for The West Australian?

Anyways. Birmingham, now speaking for the banks, likes some of the measures but wants more done on productivity. (One small idea could be for the banks to re-invest some of the billions they make in profit back into the business and staff, but productivity is now apparently a problem for the government to solve, while shareholders continue to make bank)

Dave Richardson

The stars have aligned for the federal Treasurer, Jim Chalmers, as overnight the International Monetary Fund (IMF) released its Finance & Development Magazine with the theme “The Debt-Inequality Cycle”. In this the IMF referred to arguments once put by the America’s Central Bank (Federal Reserve) Chair, Marriner Eccles, in 1933. He said one of the main causes of the great depression was that ordinary people’s purchasing power collapsed and excessive saving by the rich was draining demand and deepening the downturn. The real problem was that there had been a sharp rise in inequality with ever more income going to the rich at the expense of the poor.

During the Great Depression in the US, Federal Reserve Chairman Marriner Eccles advised that, “To protect them from the results of their own folly….we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit.”  The IMF cites this analysis approvingly as applying equally well to present day macroeconomic issues. The essential problem says the IMF is that “When too much income pools at the top, demand weakens, deficits persist, and dependence on debt weakens us all.” 

When that happens the private sector is inclined to save too much. That means if the government is to save the economy from high unemployment, governments have to step in and provide the missing demand for goods and services which can mean governments are thrown into deficits.

So, we need to tax the rich more heavily and return some of that to the rest of the population. That has been the modus operandi of the Albanese Government as especially evident in this year’s budget. Think some of this year’s major measures such as taxing trusts, changing capital gains tax, addressing negative gearing while tackling cost of living issues and the Working Australians Tax Offset, fuel excise cuts and the like. This can be seen as an important mechanism taking from the high-saving rich and returning it to ordinary people and is set in the context of ever worsening inequality in Australia. In discussing the new taxes on the rich the budget papers refer to inequality issues. 

The IMF says the international evidence supports this view of the world when it says “Saving gluts are rising everywhere. The share of income accruing to the top 1 percent has increased worldwide. Corporations are a tax-advantaged vehicle for the rich to save, so global corporate saving has risen significantly over the past few decades… But global investment has not kept up, leading to a saving glut…”

Hence the need for governments to step in and fill the gap. But the important question is whether, having diagnosed the problem, the government has gone far enough. Certainly there is scope for doing more through in-kind support for ordinary Australians through improvements in health, education and other community services.  And taxing the rich could go further – the IMF referred to corporate saving being part of the problem and there is scope for new initiatives such as a 25% tax on gas exports.

Ok, now on to the fun stuff

The Daily Telegraph

Oh my lord. I’ll have to check my copy of the Communist Manifesto where Marx advocates slashing disability support funding by 10%.

This is off the chain nuts. 

Also “your capital” is rather a big stretch for Daily Telegraph readers – most of whom would not be sitting on a pile of family trust money from their investment portfolios

Unhinged score: 9/10 The lack of a combination of Hitler and Stalin cartoon fails to get them full marks. 

The Courier Mail

I do love a straight report!

It’s all focussed oni the broken promises, oddly doesn’t explain what those are unless you read the articles.

Bit of a dull front page to be honest. The headline is unhinged but that’s about it.

Unhinged score: 4/10

Pity the poor Herald Sun editor who had really would have preferred to run with Michael Voss resigning as Carlton coach as the big story. 

The Jim Reaper is cute, but kind of dumb given they have to explain the joke with the line “ last rites for investors”

Weird photo of Chalmers ups the unhinged quota

Unhinged score: 5/10

The Advertiser front page look like someone neither read the budget papers in any great deal nor understands what capital gains are.

The big debt numbers is stupid given it is in nominal figures and it is also gross debt not net.

“homeowner tax grab” is a rather lying way to say “property investor tax grab”. If you have to lie about who will be actually affected by something by suggesting he’s coming for the family home then you really are turning up the unhinged meter 

The headline is dumb.

Unhinged 7/10 

The West Australian is glorious for suggesting that boomer know Grand Theft Auto 

Why is Jim on a quadbike?

It’s weird. 

Unhinged score: 2/10 

I’m going to be honest, I needed someone to explain the Mercury’s headline. 

I didn’t get that the “trill” was short for “trillion”  

It’s all a bit meh, and suggesting the GST is going up makes it’s a good headline for Chalmers. 

Unhinged score: 1/10

The morning after budget it’s always fun to look at the front pages of the newspapers. And I know that no one actually reads them anymore, but they are good for giving an insight in to just how unhinged parts of the media are.

Let first go through the old “broadsheets” (ie the “serious papers”)

Starting with the AFR.

Chalmers would love this. But of course the AFR is the only newspaper where its readers actually think they are wealthy, so the headline is really “you are being hit to woo next gens”.

But it’s a pretty straight front page. The big red graph is debt – but it’s in nominal dollars , which is quite silly. 

Unhinged score 2/10

The Oz, bless its little dark heart tries hard. But it doesn’t have the punch anymore. 

The “$77bn tax grab” is complete make believe. And the cartoon in the middle of the page is just lame. 

They know the $77bn line is bullshit as well because they bury the figures’ explanation until the 19^th paragraph:

“Labor would not release the individual 10-year revenue ­estimate of each of the new tax measures, with the budget ­papers only showing the collective impact of the policies would raise $77bn by 2036-37.”

So yeah – they have extended things out for ten years. 

Idiocy. And rather desperate. Come on guys, I expected much worse of you

Unhinged score: 4/10

The SMH is focussing on boomers, which is their audience, so no shock. 

It is worth remembering even the youngest boomers are now in their 60s, so yeah it might be time to focus on another generation 

It’s straight. No unhingedness. And nothing that would worry Chalmers because even rich Boomers’ know they had it good 

Unhinged score: 0/10

The Age is a bit more colourful than the SMH

But “wave goodbye to investor tax breaks”? Chalmers would love that.

Also props to Clive Palmer for the advert at the bottom of the page! 

(the gas tax really has a broad spectrum of support)

Unhinged score: 0/10

The Canberra Times wins for the most public servant-esque front page. 

I mean they know their audience. 

Yeah the broken promises subheading is a slap at the govt, but tbh I only noticed it on about the 6^th reading. 

This is so fully hinged that it gets a negative on the unhinged score. 

Unhinged score -1/10

Here is how some of the early morning has played out, as seen by Mike Bowers:

Seems Angus Taylor might be working out that he’ll never actually be prime minister

Again – Albanese’s team have DONE THE WORK to keep this man on message (chaotic neutral)

Inside of you are two wolves:

I have been writing about budgets for 12 years, and for almost all of that time, governments have claimed that they want to do something about housing affordability. But each policy put up has been rubbish.

The best you could say is that some of them would have no effect on housing affordability. These are the best because many of these policies have actually made housing affordability worse.

The evidence shows this. Over the last 25 years, house prices have boomed. Young people have watched as prices have raced ahead of them, putting home ownership further and further out of reach.

But for the first time, there is a policy on housing affordability that isn’t crap.

An actual policy that will make a real, positive difference.

What is that policy? Changes to both the capital gains tax (CGT) discount and negative gearing.

The 50% CGT discount will revert to the pre-1999 system where it linked to the inflation rate.

Negative gearing will be restricted to new builds, meaning it will no longer apply to investment purchases of existing properties.

Together, these changes will reduce the enormous tax concessions that are encouraging people to speculate on the property market. Pushing up house prices and turning the housing market into a casino.

Scrapping these two tax loopholes will tilt the field in favour of first home buyers and owner-occupiers and away from investors.

Read more, here.

The Daily Telegraph thinks that structural tax changes for the wealthy is ‘communism’ while Jim Chalmers’ home paper, the Courier Mail has gone for something a little more subtle (thank you to Tegan George for the assist).

The lines on this budget are very clear already – the government is saying that yes, there are structural changes, but they are willing to have the fight over it because it’s ‘the right thing to do’.

Which is a very quiet way of saying that the inequality among generations became so loud that doing nothing would have blown up in their faces in a major way.

The Coalition, which is without policies, or direction, is stuck on the ‘broken promise’ palaver (which is helped along by the media who have been running this line for the last week) and trying to pretend that everything is the same as the Howard era and they just have to keep running those lines.

Which is why they are facing electoral wipe out. Strange that they still don’t seem to see that.

AAP has written up a story on the morning’s circus – this gives a good overview of the main lines on the 2026 budget:

The treasurer has admitted changes to negative gearing and the capital gains tax will be contentious among voters, as Labor begins its sell of tax reform from the federal budget.

While Jim Chalmers says 75,000 young Australians will be able to buy their first home as a result of changes, it could take up to a decade for negative gearing rates to come down.

Negative gearing – where a landlord can deduct losses on a rental property against their wages at tax time – will be limited to newly built homes from July 2027, with an exemption for properties bought before the announcement.

The 50 per cent discount on capital gains tax will also be overhauled, with the measure on existing properties to be linked to the current rate of inflation from July 2027, and a minimum tax rate of 30 per cent to be imposed.

The government has promised a $250 tax offset for all Australians earning a wage as a sweetener for the tax changes, but that won’t hit pockets until July 2028.

Dr Chalmers said he was prepared for blowback from sections of the community.

“These changes are contentious. There’s no use pretending otherwise, but it’s the right thing to do,” he told ABC Radio on Wednesday.

“The easiest thing that we could have done from a political point of view would be to see these challenges in the housing market … and to leave everything exactly as it was and we didn’t think that was an acceptable outcome.”

The treasurer said it would take time for the full extent of the negative gearing changes to become clear.

“Typically, it depends on which modelling you rely on, but between five to 10 years, typically, a property will tip over from negatively geared to positively geared,” Dr Chalmers said.

“That will phase out of the system, but people can continue to invest in new properties, because we desperately need to build more homes.”

Gains on properties built before 1985 – which have previously been exempt from CGT – will also begin being taxed from July 2027 at the inflation-adjusted rate.

A 30 per cent minimum tax will also be imposed in discretionary trusts, which are often used by wealthy families to split income between family members and minimise tax.

Together, the changes to investment taxes will rake in an extra $8 billion, to be spent on the new offset for all workers and further relief for businesses and startups.

Prime Minister Anthony Albanese said 75,000 more people entering the housing market over the next decade was not too small for the extent of the tax changes being rolled out.

He repeatedly ahead of the 2025 election ruled out changes to negative gearing in a second term, but said the changes were necessary.

“We need to make sure that we don’t say goodbye to the Australian dream this generation,” he told ABC TV.

“We can’t develop into a society where you can determine how successful people are by whether they’re homeowners, some to own multiple properties, and others that are simply locked out of the market.

Opposition Leader Angus Taylor said while the coalition supported measures on small business, the tax changes were a broken promise.

“We think there’s different savings. We think there’s much better places to save rather than hitting Australians with higher taxes,” he told ABC Radio.

“The budget papers show that the changes around negative gearing, capital gains and the trusts will dampen investment.”

Shadow treasurer Tim Wilson said young Australians were being “kneecapped” by the tax changes.

“As they’re saving for a deposit, they’re going to pay higher rents,” he said

“Then the government is going to apply more taxes on their first home deposit if it’s invested, and they’re going to then go on and build fewer homes, which means that it’s going to be less likely young Australians will be able to buy one.”

The Antipoverty Centre has responded to the budget – as you can imagine, they are bitterly disappointed on behalf of those they advocate for, who will lose NDIS support, as well as receiving no assistance through this latest inflationary period:

The 2026 federal budget will be remembered as the cruellest act of the Albanese government and will cause incalculable harm to disabled people, their carers and communities thanks to $36 billion in NDIS cuts that will harm those who are living in poverty the most. 

At the same time, this government has offered nothing that will improve the lives of people who rely on Centrelink payments or others on a low income as we continue to drown in high and rapidly increasing living costs. As the RBA relentlessly pushes for higher unemployment and fewer job prospects, welfare recipients face continued punishment under the unlawfully operated welfare compliance regime

Kristin O’Connell, an Antipoverty Centre spokesperson who relies on the disability support pension and NDIS to live, said: 

On $36 billion in NDIS cuts over four years

The Albanese government has never been afraid of policies that kill people who need support, and the unfathomable size of these NDIS cuts is the most egregious example yet.

This budget targets disabled people but does nothing to scrutinise the private organisations who cash in on our need for support. While many of us will have our lives upturned, outsourced “human services” contractors will consolidate power and continue to cash in.

On changes that will reduce tax breaks for property investors and $250 income tax offsets 

Reducing inequality is always the right thing to do, but ensuring that people who are wealthy enough to own multiple homes pay fairer taxes is only partly addressing the issue when existing investors can continue to negatively gear their extra homes. 

The government’s tax changes ignore millions of people who pay regressive taxes like GST but do not have enough income to benefit from the meagre tax offset, which isn’t even enough to make a meaningful difference to those who will be able to access it.

On missing public housing investment and $6000 payments to around 4000 community housing landlords 

If the Albanese government was serious helping those of us bearing the brunt of the housing crisis it would build high quality public homes for everyone who needs one, but there is nothing in this budget to reverse the trend of public housing destruction. 

$6000 handouts to community housing landlords who have discriminated against people on Youth Allowance will not create a single home, all it will do is shuffle people around who are on impossibly long waiting lists without reducing the number of people rough sleeping or facing homelessness.

Antipoverty Centre spokesperson Jay Coonan said:

On anticipated employment services “reform”:

$316 million has been announced to “improve” employment services, with $26.5 million set aside to prop up the collapsed National Customer Service Line where people are waiting for over four hours to get their payments reinstated and are stuck with abusive unemployment services as their complaints go unresolved.

Amanda Rishworth knows that millions of people over the years have had their payments unlawfully suspended or cancelled and the Department of Employment and Workplace Relations is doing everything in their power to cover up this serious issue.

On the Albanese government not abolishing income management as they promised:

It isn’t shocking that the government has thrown $202 million at controlling the income of poor people and breaking their ‘No One Left Behind’ and ‘Abolish Cashless Welfare’ election promises from 2022.

The most egregious is that $190m+ of this spend has not been published as it is going directly into the pockets of private companies to control the incomes of people across the continent.

This harmful and racist program was expanded and cemented in law by the Albanese government as they try and figure out how to spread it to every community across the country.

On no help for welfare recipients:

The Albanese government has again ignored the popular and necessary demand to increase the rate of social security payments. As inflation and unemployment continues to rise, at the same time housing and bills are hurting people on higher incomes, the poorest drowned long ago.

It is evident that there is nothing but contempt for no and low income people from the Albanese government, because if they truly believed in higher payments to support people they’d be out there doing the work to raise payments.

On increasing energy bills:

There was nothing in this budget to deal with the growing debt crisis in the energy market.

As energy bills and energy retailer profits continue to rise, the government is funding websites to tell people to “shop around”. This is a serious issue that needs immediate government intervention – they have to wipe the debts and do something to decrease energy prices for people struggling with the cost of living.

Crisis support and counselling services 

If you need support you can seek guidance, counselling or crisis help from the below organisations or talk to someone you trust. 

• Suicide Call Back Service – general: 1300 659 467
• Roses in the Ocean – peer support: 1800 777 337
• SANE Australia – general: 1800 187 263
• 13YARN – for First Nations people: 13 92 76 
• National Counselling and Referral Service – for disabled people: 1800 421 468
• Headspace – for young people: 1800 650 890
• QLife – fo LGBTQIA+ people: 1800 184 527
• Full Stop – for people who have experienced sexual harassment and assault: 1800 385 578
• Embrace Mental Health – multilingual service: embracementalhealth.org.au
• MensLine – for men: 1300 789 978
• Brother to Brother – for First Nations men: 1800 435 799 
• National Debt Helpline – assistance with negotiating reductions for overdue bills and debt: 1800 007 007 

The standard ‘prime minister surprises treasurer during morning after the budget interviews’ play has played out in one of the courtyard’s this morning – this is part of the ‘look how much we love each other, no tension here’ standard play between PMs and their most likely successors which has been a budget set piece for as long as there have been TV cameras.

The Coalition has decided it will go to the wall fighting to keep negative gearing and the original capital gains tax, which – of course they would. Why try and show voters you have moved on from the past and see reality as it is, when you can continue just running into a brick wall?

Last night, shadow treasurer Tim Wilson (still a lol) said the Coalition’s “objective” was to “defeat” the changes and “make sure they are never legislated”.

To which, I, admittedly someone who is not great with numbers, say – how? Because not that you would know given how they treat most legislation and ideas, don’t need the Coalition to pass bills in the Senate. They have enough with the Greens and independents. Who are in favour of the changes. It doesn’t matter if the Coalition don’t like these changes – if Labor is serious about them, they have a pathway to pass their bill.

Wilson thinks that the government doesn’t have permission from Australians to make these changes, and that is what the Coalition will fight on. There he has some help – most of the press gallery is obsessed with the ‘broken promise’ narrative and is running it across the board, which is another disconnect from where most Australians are at.

Asked about the Coalition’s latest love affair with the word no, Albanese told ABC News Breakfast:

Well, they are a rabble, and they have – not surprisingly – just said no to everything, because they say no to everything and that’s what they’ve been doing for four years.

The morning after the budget is delivered is even more of a circus than the budget itself. The major TV networks all set up little tents on the Parliament House lawns and the treasurer, prime minister, and other senior politicians (including from outside the government) walk from tent to tent doing interview after interview.

Which usually means there are a lot of Very Important People being Very Important on the grass, lots of stress and phone calls over issues with live broadcasting and a sense of stress that truly does not belong with anyone not actively saving lives.

It also means that, if your job is to cover this, you hear the same things over and over and over again. So we are going to save you that and bring you a review of the papers (spoiler – it is as expected, although the Daily Telegraph pretending this is a communist takeover is very funny to me) and the main points from the interviews, rather than bombarding you with repeats of information over and over and over again.

I love you all too much to subject you to that.

Direct funding for environmental protection in this year’s budget is just 0.3% of total budget expenses. Alarmingly, it then falls off dramatically over the forward estimates. As the chart below shows, such low levels of direct investment in the environment used to be a feature of Coalition rather than Labor governments.

Under the Rudd/Gillard government, spending on the environment increased to a high of 1.1% of government expenses. Put another way, in 2013, the government were spending over 3 times as much on the environment as a percentage of the budget as a whole. For every $100 of our tax dollars spent, only 30 cents goes toward protection for the environment.

If ever there was a decade to reduce care for country, this last one wasn’t it. Australia is a biologically diverse natural nirvana. Over 80% of our mammals and reptiles are found nowhere else on Earth. Iconic ‘Australian only’ favourites include the platypus, koala, wombat, kangaroo, and quokka.

But since 2015, Australia’s rate of mammal extinction has accelerated and is now the highest in the world. The 2019/20 bushfires killed or displaced an estimated 1 to 3 billion native animals. The reef suffered multiple mass bleaching events, including the first on record during a La Niña year in 2022. Our environments capacity to provide a bountiful home for human and economic activity is collapsing.

Whilst threats to nature are immense, the solution for governments can be simple. Stop or limit activities that destroy ecosystems and spend money and time restoring what has already been damaged. This budget does the opposite of both those things.

You can read more, here.

The Australian Government has now released its formal response to the Australian parliament’s inquiry into online gambling and gambling advertising. The response was tabled in Parliament at about four o’clock on the Tuesday afternoon that most of Parliamentary press pack were locked in a room without their phones or laptops so that they could read an advanced copy of the budget.

If that was a way of ‘taking out the trash’ and making sure as few people as possible saw whatever the Government was trying to hide, it didn’t stop the story leading major news bulletins throughout the day. The Government will be hoping that now the Budget is public, the conversation will move on.

Australians have waited almost three years for the Government’s response.

You can read more, here.

Well, well, well – looks like the big dawgs are tired too – Anthony Albanese just called ABC radio RN Breakfast host Sally Sara, Melissa (meaning, presumably, ABC radio AM host, Melissa Clarke, who is usually the RN Breakfast political correspondent, but is filling in on the earlier show at the moment)

There is still a lot of focus on the ‘broken promise’ aspect of the budget, but that kinda misses the point of what the actual issues are. Labor has given a very strong nod to intergenerational inequity – tying the decisions to undoing Howard and Costello’s changes, to try and make things fairer. That though, is a long term game. In the short term, there is not going to be much material gain for those who have missed out so far, and while the structural change is significant, it is not enough for people struggling to find housing, or see a future, to feel like they have been seen. There is no new spending linked to any of the wealth tax changes. So Labor can’t say ‘we are giving you free childcare’ or ‘we are giving you dental’ in exchange for these overdue wealth taxes. Which, in light of the NDIS cuts – which even if you haven’t had on your radar you will soon, because of all the uncertainty surrounding where people being moved off the scheme – or denied access to it – will go – and how those still receiving some benefit will fill any gaps in their care if they have limited financial means – is going to matter.

There is still billions being spent on defence and fossil fuel subsidies and cuts to social programs. That is going to matter, above and beyond ‘broken promises’. The structural changes do matter – more than a ‘broken promise – because it shows there is some acknowledgement of just how bad things have been, but there is no sugar hit. By the time we get to the expiry of the fuel excise cut, people will be mad.

Because structural change is important, but it doesn’t help anyone who needs it. Which is why the government also knows that the gas tax issue is not going to go away. People need help and they understand the government is just letting potential revenue – which hurts no individuals – just sit there. It’s only a matter of time before that impossibility becomes an inevitability.

When we say this budget is a major structural reform, this is what we mean – this note was put out by Holding Redlich, a national law firm, which specialises in corporate tax. Have a look at some of the language here, particularly the second paragraph: there is now no more benefit to having a trust, if you are trying to minimise tax – so that money looks to be invested in corporate structures (the rich will always find ways to move their wealth into more beneficial areas).

Holding Redlich Tax Partner Dhanushka Jayawardena, who specialises in M&A, funds, and cross-border tax structuring, said the 2026–27 Federal Budget centres on three key tax reforms: capital gains tax discount phased out across all assets with limited exceptions, negative gearing on future acquisitions of residential property eliminated unless new builds, and a minimum tax of 30% on discretionary trusts.

“The Government has just done what 25 years of tax reform reviews recommended and neutralised the tax advantage of discretionary trusts over companies. With both vehicles now sitting at or around 30%, and small business companies sitting below that at 25%, the case for a discretionary trust collapses to non-tax considerations. Asset protection and succession planning remain valid reasons to choose a trust. Tax efficiency is no longer one of them. We expect a meaningful migration into corporate structures over the three-year rollover window, and a near-universal default to companies for new structures from 2026 onwards.

“This has been sold as a housing affordability measure, but the housing market is the smaller half of the story. The 50% discount disappears for every asset class held by Australian individuals, partnerships and trusts such as listed shares, private company scrip, units in funds, infrastructure interests, private equity. The single largest change to the taxation of Australian savings since 1999 has been announced under the banner of helping first home buyers.

“Returning to indexation sounds simple until you remember why we abandoned it in 1999. Every long-held asset now needs a 1 July 2027 cost base, and the taxpayer gets to choose between a professional valuation and the ATO’s formula. Five years from now, the valuation evidence on a 2027 disposal may well be the single most-litigated issue in the CGT regime.

“The 30% minimum tax on capital gains is the quieter half of the package and the part that will catch sophisticated investors off guard. It removes the long-standing strategy of timing disposals into low-income years such as retirement years, sabbatical years, business loss years.

“The headline says negative gearing is going. The reality is more nuanced. Investors who buy new builds keep negative gearing in full, including the ability to offset losses against salary income. The Government has not abolished a tax concession so much as repurposed it as a supply-side incentive.”

Holding Redlich Partner Andrew Stone, who specialises in investment funds, adds that the Budget Papers indicate the existing 50% CGT discount will be replaced from 1 July 2027 with a regime based on an inflation indexation model.

“This has a number of significant implications for investment fund managers.

“For funds already in market, continuous disclosure obligations are relevant. This may require careful review of offering documents and providing updated disclosure, particularly in relation to the transitional arrangements leading up to 1 July 2027.

“Investor redemptions are potentially a key consideration, including the possibility of increased investor redemptions, and whether asset disposals before 1 July 2027 are desirable or required, whether other sources of liquidity are available, and the possibility of needing to gate or freeze redemptions. Investor best interest is central to all of those considerations.

“Product issuers may also wish to review constitutions and trust deeds for optimisation with the new tax arrangements. In addition, arrangements with investment managers and fund administrators are also relevant to ensure delivery of services that are consistent with the new tax rules. Appropriate tax reporting and unit price calculations being key risk areas. Fund models and distribution assumptions may also need to be reviewed.

“For investment funds not currently in market, there may be questions around new product demand, including whether demand for income strategies may be stronger than capital growth strategies, and what options are available for investors seeking tax effective capital growth strategies.

“There is also potential for innovation in real asset strategies, including housing-related fund structures, particularly build-to-rent and land lease.

“For Australian Financial Service Licence holders more broadly, consideration of compliance and risk frameworks are in play to ensure they are fit for purpose and up to date, as are staff training arrangements. It will be vital to ensure representatives are adequately trained to provide accurate financial product advice having regard the effect of the new tax laws.”

Hello and welcome back to The Point Live, where the horse and pony show that is the budget sell has begun.

Jim Chalmers was up late last night selling his fifth budget, which sets the groundwork for some significant structural reform in terms of some of the tax system, but won’t give any relief for anyone who needs it now.

The budget is more of a signal – Labor is telling people it will work on addressing these issues and sees them. It’s also telling the market that it won’t be spending big and be a drag on inflation, which should make some of the economic hawks happy. But it is doing it at the expense of the NDIS – the cuts there are among the most drastic to any social program I have seen, and the economic vulnerable – there is nothing for the unemployed (despite the RBA looking to increase their numbers), nothing to lower the cost of services like child care or aged care, and nothing to help those who are struggling beyond a $4 a week tax cut that won’t arrive until 2028.

So let’s spend the day together muddling our way through it, huh?

You have Amy Remeikis with you – I have had about four hours sleep, so this is bound to be fun, and I am so desperate I have turned to instant coffee – and a very talented group of very smart people to help explain all of the things to you. Mike Bowers’ work is on loan from The New Daily, which means I’ll be able to take you into the chamber as well.

Ready? Yeah, I get that. Me either. But let’s jump in.