2026 Australian federal budget
| Submitted to | House of Representatives |
|---|---|
| Presented | 12 May 2026 |
| Parliament | 48th Parliament of Australia |
| Government | Albanese government |
| Party | Australian Labor Party |
| Treasurer | Jim Chalmers |
| Website | budget |
|
‹ 2025 2027› | |
A budget will be presented to the Australian House of Representatives by Treasurer Jim Chalmers on 12 May 2026. It will be the Albanese government's first budget since winning the 2025 election and their fifth since coming to government in 2022.
Policies such as the removal of the capital gains tax discount have been speculated in the news media.
Background
In the 2025 budget, the government funded a new tax cut for low and middle-income earners to apply from 1 July 2026. The government also revealed that they would fund a $150 energy rebate for households and small businesses. The government also expanded the availability of childcare services to parents with three days of subsidised care.[1]
In the Mid-Year Economic and Fiscal Outlook (MYEFO) for the 2025 budget, treasurer Jim Chalmers revealed that the deficit had reached $36.8 billion, $5.3 billion lower than forecast in March 2025. The update also expected the economy to grow by more than $8 billion over the next four years. In the MYEFO update, the government confirmed additional savings totalling $20 billion would be made over the next four years.[2]
On 8 February 2026, Chalmers announced that this budget will aim to "lift the speed limit" of the economy. He also said that he would focus on "getting the budget in better shape". He revealed that Treasury is working on a "savings package" and "a productivity package".[3]
The Sydney Morning Herald has reported that the government will not invest any further money in renewable energy projects through this budget. This puts a halt to an upwards trend in renewable energy investment since Labor came to power in 2022.[4]
The news media has speculated that the capital gains tax discount may be abolished in order to improve housing affordability.[5] The Sydney Morning Herald has reported that the government is considering cutting the capital gains tax concession to 25 percent which was Labor's policy in the 2016 and 2019 elections.[6]
The Greens have called on the government to pursue "bold reform" in this budget, this follows their backing of Labor's plan to tax superannuation balances at a higher rate—increasing from 15% to 30%, balances higher than $10 million will be subject to an additional 40% tax rate.[7]
In March 2026, a parliamentary committee endorsed changes to the capital gains tax discount, while the Liberals are opposed to such a change and would prefer to see more housing be built. A recent tax white paper by Wentworth MP Allegra Spender also mentioned that the discount should be reduced to 30% from 50%, while David Pocock wished to see a 25% discount.[8]
References
- ^ Evans, Jake and Truu, Maani (25 March 2025). "Federal budget winners and losers". ABC News. Archived from the original on 14 February 2026. Retrieved 13 March 2026.
- ^ Wright, Shane (17 December 2025). "Cost of cigarette excise collapse passes $50 billion as income taxes prop up budget". The Sydney Morning Herald. Archived from the original on 19 February 2026. Retrieved 13 March 2026.
- ^ Tregenza, Holly (8 February 2026). "Jim Chalmers says next federal budget will focus on lifting economy's 'speed limit'". ABC News. Archived from the original on 17 February 2026. Retrieved 13 March 2026.
- ^ Foley, Mike (8 March 2026). "Red light for new green investment slows race to renewable target". The Sydney Morning Herald. Archived from the original on 8 March 2026. Retrieved 13 March 2026.
- ^ Jeffrey, Daniel (6 February 2026). "Government not ruling out capital gains discount reform amid reports $23 billion tax break could be overhauled". Nine News. Archived from the original on 7 February 2026. Retrieved 13 March 2026.
- ^ Wright, Shane and Massola, James (4 February 2026). "Cutting capital gains deductions opens door to bigger cuts". The Sydney Morning Herald. Archived from the original on 18 February 2026. Retrieved 13 March 2026.
- ^ Jervis-Bardy, Dan (10 March 2026). "Richest super balances to be taxed at higher rates after Greens agree to back Labor plan". Guardian Australia. Archived from the original on 9 March 2026. Retrieved 13 March 2026.
- ^ McIlroy, Tom (17 March 2026). "Labor appears set to reform capital gains tax discount after parliamentary inquiry findings". Guardian Australia. Archived from the original on 17 March 2026. Retrieved 17 March 2026.
Further reading
- Asher, Nicole (17 March 2026). "Economists call for budget bravery as rising inflation contributes to another RBA rate rise". ABC News. Archived from the original on 17 March 2026. Retrieved 17 March 2026.