Federal budget 2026 as it happened: Treasurer Jim Chalmers confirms big changes to negative gearing, CGT and relief for workers

Independent senator David Pocock has congratulated the government for moving on tax changes to support housing affordability, but has lamented the choice not to establish a gas export tax, which he extensively campaigned for in recent weeks.

“This budget is such a mixed bag – on the one hand some big reforms on housing that took real political courage, on the other a tragic missed opportunity to set us up for a more prosperous and secure future,” Pocock said.

Pocock was also critical of what he said were “underspends” on key housing programs, but said the government was beginning to send a message that housing should be treated as “a human right”.

The Australian Council of Trade Unions has welcomed the budget, which they described as one “of fairness for workers delivering on housing, cost-of-living relief and increased fuel security”.

“This is a budget that finally tackles a system that’s been taxing work harder than taxing wealth. This budget marks a shift that gives workers a fairer shot at housing stability through tax changes that will start to rebalance the rules,” union president Michele O’Neil said.

“It’s important to put housing back within reach for working people who have been locked out of affordable housing near where they live and work.”

The union also welcomed the creation of an east coast domestic gas reservation and the government’s broader fuel resilience package. It also said taxing discretionary trusts “more fairly” will take pressure off workers.

One Nation MP Barnaby Joyce says entrepreneurs would be smart to leave the country because of the changes to capital gains taxation in the federal budget.

“I think they’re destroying the aspiration of people who are entrepreneurial,” Joyce told the ABC.

Joyce said business owners relied on the premise that when they sell, they can make a substantial capital gain, and that the budget measures represent an overtaxation of that gain.

“The smartest thing for [entrepreneurs] to do is leave Australia,” he said.

In response to the property tax changes, Joyce said it was based on a “fallacy” that there is a “whole range of people out there who are only renting because they want to… And now that we brought in this change, they’ll all just become first home buyers”.

“No, they won’t. They’ll continue renting, and they’ll get pushed down the scale and out of the out of the rental market and onto the street. Paul Keating had a crack at this about, you know, and two years later, he had to reverse it, because you’re getting homelessness.”

The Master Builders of NSW have said the budget is “full of broken promises” and have questioned whether the government is walking away from housing targets.

“Changes to negative gearing and capital gains tax arrangements are a broken promise to the 300,000 businesses which make up the construction industry,” association executive director Matthew Pollock said.

“The budget falls short of any major reforms to address the shortfall in the housing accord targets, raising the question of whether the federal government is walking away from its housing targets.”

The association said it had “real concerns” about whether rents would go up and building activity would decline because of changes to the capital gains tax discount and negative gearing.

“The last time negative gearing was removed, it needed to be reintroduced two years later because rents had spiked to unacceptable levels,” Pollock said.

Independent MP Zali Steggall has described the government’s budget as “a failure” for not investing meaningfully in climate adaptation and disaster preparedness, which she said would leave Australians worse off in the long term.

“The government continues to take a narrow and outdated view of national security, pouring billions into defence while leaving climate resilience severely underfunded,” Steggall said in a statement.

“It is troubling that just $117 million has been allocated to climate adaptation and disaster resilience, compared with $863.8 million over four years for the nuclear-powered submarine program.

“This budget exposes a clear and deliberate choice by the Albanese government: protect multinational fossil fuel interests or secure a fair return for Australians. It chose the former. The refusal to remove fossil fuel subsidies or introduce a 25 per cent gas export tax is a major failure of leadership and a lost opportunity to deliver fairness in the national interest.”

Steggall welcomed changes to negative gearing and the capital gains tax discount, but said they were “undermined” by “poorly targeted measures” like a halving of the fuel excise, announced amid rising oil prices caused by the war in the Middle East.

She also criticised the lack of “meaningful funding for anti-racism initiatives” amid faltering social cohesion and “division fuelled by One Nation”.

Shadow treasurer Tim Wilson was then asked to reflect on the “broken promises” of the Coalition’s 2014 budget, and the fates of then-prime minister Tony Abbott and then-treasurer Joe Hockey, who both lost their roles within a couple of years.

“What does it say about the opposition if you can’t deal the same punishment to the government for breaking similar promises?” Nine political editor Charles Croucher asked.

Dodging the premise of the question, Wilson replied, “This is why we’re being resolute and clear about we’re opposing these measures because these measures go to the heart of the trust people have in the government, and the treasurer himself.

“[Labor] went to the last election saying they wouldn’t do precisely these things, but more importantly, it won’t even deliver the outcome that they’re claiming. How can you introduce new taxes that are going to hit small businesses, that are going to hit young Australians who are saving and investing their first home deposit and increasing rents and also building fewer houses?

“This government is developed a narrative around their budget, then they’ve tried to retrofit the data, and they’ve even themselves admitted they can’t make the numbers stack up.”

Shadow treasurer Tim Wilson has accused Labor of being late to acknowledge “out-of-control fraud” in the NDIS, childcare and aged care.

Asked on Nine if Labor had delivered enough spending cuts, Wilson took credit for pressuring the government to take action on fraud in the NDIS and aged care.

“The spending or announcements where they’re actually delivered remains very much a big question,” he said.

“And only today, after [the Coalition] for months and months and months saying NDIS fraud, childcare fraud, aged care fraud for home care packages is out of control. They finally acknowledge that that’s part of the problem.”