Australian taxpayers and first home buyers are the main winners in Labor’s 2026 federal budget, while wealthy families face higher taxes. The budget, delivered by Treasurer Jim Chalmers, introduces a permanent tax offset of up to $250 for working Australians from 2027-28, benefiting over 12.5 million people. Additionally, the tax rate for income between $18,201 and $45,000 will drop to 14% from July 2027, and taxpayers will be able to claim an instant deduction of $1,000 without receipts from 2026-27.
First home buyers are set to benefit from higher taxes on property investors, with capital gains tax and negative gearing reforms expected to force investors out of the market. The government predicts around 75,000 new homebuyers will enter the market as a result. However, renters who cannot afford to buy may face higher rents, with reforms expected to increase weekly rents by nearly $2.
Wealthy Australians face a minimum 30% tax on discretionary trusts from 2028, aimed at curbing tax minimisation. This measure is expected to raise $4.5 billion annually, targeting the wealthiest 10% who hold most private trust wealth. The budget also includes a $1.2 billion drop in tobacco excise revenue due to growth in illegal tobacco, despite $20 million allocated to combat the illicit market.
Public service staffing will rise to a record 217,256, though the government says it remains below historical levels relative to population. The Australian Competition and Consumer Commission will lose 300 roles as the Energy Regulator moves departments, while the National Disability Insurance Agency will cut nearly 700 positions. Commercial broadcasters receive a two-year tax holiday worth $111.3 million, and Australian Associated Press gets $15 million to support journalism.
Funding for science includes $273 million for the National Measurement Institute, $21.7 million for the Australian Space Agency, and $387.4 million for the CSIRO. Environmental conservation receives $99.6 million over two years, which experts say is insufficient. The budget also addresses e-bike safety, with new standards to be introduced.
