“This Federal Budget signals an important shift in Australia’s transport and energy transition. As the nation moves beyond early EV adoption, the focus is expanding toward broader transport system resilience, productivity and energy security.

The recent fuel disruptions and geopolitical uncertainty in global oil markets appear to have accelerated recognition that transport is no longer simply a mobility issue, or even just an environmental issue. It is increasingly connected to national resilience, supply chains, housing and economic productivity. In that sense, transport policy is increasingly becoming energy policy.

The continuation, but gradual recalibration, of the Electric Car Discount suggests the government believes the EV market is now maturing. These policies should not be viewed only as emissions policies, but also as market creation and technology adoption policies designed to build momentum and consumer confidence.

The budget includes important investments in freight rail, active transport, fuel resilience, EV charging and fleet electrification. However, questions remain around the scale and long-term pace of charging deployment, heavy vehicle electrification and the roadmap for replacing fuel excise revenue as vehicles gradually electrify.

Overall, this budget appears focused on managing the transport transition carefully rather than accelerating difficult structural reforms too quickly.”

"Lifting productivity in Australia is a key objective of the 2026 federal budget. Stagnant productivity gives rise to inflationary pressure with strong aggregate demand and it is also a major impediment to improving the standard of living in the long run.

The flagship measure on negative gearing and CGT discount should in theory pivot the housing market from investors towards homeowners. However, the end result is likely to be modest declines in house prices and modest increases in rent. Ultimately, improving housing affordability to improve labour productivity will come from increasing housing supply.

There is also a package of regulatory reform, which is a departure from past budgets that mostly focus on tax and spending. As is well documented, productivity in Australia is stifled under the weight of regulatory complexity. Hence this is certainly moving in the right direction of productivity enhancement.

However, future budgets are forecast to continually rely heavily on income tax receipt, which is highly distortionary. The government may have missed an opportunity under the current political climate to embark on more substantial tax reforms. As removing distortions and improving incentives are key to increasing productivity."

“This is not a budget that rewrites the superannuation rule book, but it is still highly relevant to retirement policy. The most important superannuation measure is the proposed strengthening of the performance test. That test has played a useful role in protecting members from persistent underperformance, but if it is too rigid, it can discourage funds from making prudent long-term investments whose benefits do not fit neatly into short-term benchmarks.

The key is not to weaken the test, or to turn superannuation into a pool of money for government priorities. The key is to ensure trustees are assessed in a way that rewards strong, well-governed, long-term investment decisions while still penalising poor performance.

The wider tax changes also make superannuation more central to household wealth building. As concessions for property and some private investment structures are wound back, super remains the main disciplined, tax-preferred vehicle for long-term saving. That increases the importance of fairness within super itself. Better targeting concessions for very large balances and improving support for low-income workers should be seen as two sides of the same retirement policy challenge.

The test for these reforms is simple: do they improve retirement outcomes for ordinary members?”

"The Australian Academy of Science has welcomed a number of measures in the 2026–27 Federal Budget as a commitment on long-overdue science reform.

This budget will establish the National Resilience and Science Council. The Council is the foundation of the reform proposed in the Ambitious Australia report resulting from the Strategic Examination of Research and Development.

The Council will be key to bringing coordination to a fragmented science system and will ensure science is at the centre of government decision-making.

Other measures to implement the Ambitious Australia report recommendations include changes to better target the Research and Development Tax Incentive.

The Academy welcomes the government’s commitment to lift the cap on spending from the Medical Research Future Fund, which will increase disbursements, from $650.0 million in 2025–26 to $1.0 billion annually from 2030–31. This will allow medical researchers to make life-saving discoveries without depleting the underlying capital of the fund.

The Academy also welcomes the following measures in tonight’s budget:

• $387.4 million over four years to support the financial stability of the CSIRO. CSIRO is also receiving investments for the Australian Centre for Disease Preparedness and its STEM Professionals in Schools program.
• $10.6 million over two years from 2026–27 for the Australian Nuclear Science and Technology Organisation to continue radiological baselining and monitoring and advise on the safe implementation of nuclear technology.
• $24.3 million over two years to uplift operating resources for the NHMRC, including conducting a feasibility study for a Research Grant Hub.
• $273 million over four years from 2026-27 for the National Measurement Institute.
• $105.9 million over four years from 2026–27 for the Department of Climate Change, Energy, the Environment and Water (DCCEEW) and the National Environmental Protection Agency (NEPA) to modernise environmental information, data and digital systems.

The Academy also welcomes continued Government support for the Academy’s STEM education programs. The Academy will receive $1.8 million in 2026-27 to extend its school programs to boost the confidence and capability of STEM teachers and their students.

Teachers are facing unprecedented workload pressures, workforce shortages and out-of-field teaching demands.

Continued investment in this program is welcome news for schools, teachers and students across Australia.

Building on this commitment with multi-year funding is the natural next step. That kind of certainty allows schools to plan, supports teachers' ongoing development, and lets the benefits of these programs compound year on year which is exactly what Australia's future STEM workforce will need.

Genuine reform processes are difficult. Some elements of the Budget are disappointing, including the repurposing of the Australia’s Economic Accelerator Program to fund many of these measures.

There is also a lack of forward investment in national research infrastructure including high-performance computing.

Overall, the absence of a material increase in the government’s investment in science means these initial reforms are only a welcome first step and more is needed.

The Ambitious Australia report recognised that a truly coordinated science system cannot be built without courageous decisions about structures and priorities, and we acknowledge these important first step of these reforms."

"As the first budget of the Albanese Government's second term, there was always likely to be some big fiscal swings. A major highlight was the confirmation of the new capital gains tax (CGT) regime. Whilst reverting back to an inflation-indexing regime was expected, the finer details were quite significant.

Firstly, the new regime applies CGT to gains earned after 1 July 2027 on ALL assets. This includes non-property assets and assets that were previously outside of the CGT world (assets purchased prior to 1985) and also comes with a minimum tax rate of 30%. Interestingly, new home builds can apply for a 50% CGT discount, providing an incentive to make new housing supply an advantageous asset. On top if this, new builds will also be able to apply net losses to other taxable income (i.e. they will still be able to get negative gearing benefits).

Other significant changes – minimum 30% tax on discretionary trusts, end of the fuel excise discount, small business “loss carry back”, and instant $1000 work expense deduction (along with “WATO”). There’s more spending on defence, EV infrastructure, and fuel reserves and less spending on NDIS and inland rail infrastructure. And all of this while trying to keep the budget deficit and inflation at moderate levels amidst a backdrop of economic and geopolitical uncertainty."

Prevention 

"One of the key focus areas that the Treasurer identified for this budget was productivity, but the government has missed a big opportunity to improve productivity through prevention of chronic disease. Chronic diseases cost $98 billion in 2023-24 - over half of all health expenditure - the investment in the budget in prevention (just under $1 billion) is out of proportion to this challenge.

Instead, taxpayers will need to fund an extra $25 billion for hospitals each year, and more for urgent care centres. Not only do chronic diseases cost a lot to treat, sick people are less able to participate in the economy - lost labour force participation from chronic diseases is projected to reach as much as $63,7 billion by 2030. We can't afford to keep ignoring prevention."

Medical research

"It's pleasing to see that an additional $508 million of funding for medical research over the next 4 years, following strong advocacy from the medical research sector. However, it's at least partially funded by the closure of the Australia's Economic Accelerator program which focused on commercialisation. This does not resolve structural problems in the research sector, where for every dollar of research funding, independent research institutes need to find another 65 cents. Grant funding simply hasn't kept up with the cost of delivering medical research - and the budget does not address that."

"Every Budget is a balancing act. The most important Budget in Australia's recent memory attempts to balance an oil shock against an inflation forecast, structural tax reform against an election promise, and short-term relief against long-term fiscal repair. The balance holds only if oil prices fall on schedule and a generation of property investors forgives the Government.

The average worker is $2,500 better off by 2027-28, of which the new Working Australians Tax Offset contributes a princely $4.81 a week. Fuel excise is halved for three months.

From 1 July 2027, negative gearing on established homes is restricted to those owned before Budget night, and the 50 per cent CGT discount becomes inflation indexation plus a 30 per cent minimum tax. The Boomer landlord keeps his deductions for life. The thirty year old who has watched prices double in fifteen years gets a symbolic win that arrives slowly. The over-70s pay up to $400 a year more for private health. 300,000 people will lose NDIS access.

The Budget grasps at a lot and reforms very little. Housing demand gets rewritten while supply stays in state planning offices. Trusts and capital gains widen the tax base while the GST sits untouched. Productivity, the slowest in sixty years, gets regulatory housekeeping rather than structural overhaul."

"We welcome the investment in science and research – including for publicly-funded research agencies like CSIRO. It’s a much-needed lifeline after many years of dwindling funding.

Funding science and research is one of the best investments a government can make – we know that the extra funding announced tonight will pay dividends and set us up to be more prosperous and competitive.

We’re pleased to see the Government start to implement the Ambitious Australia report – and we call on the Government to harness that ambition, continuing to invest in research as well as proven initiatives to grow the skilled workforce we need to deliver it."

"The tax reforms from the 2026 budget will attract all the headlines and rightly so. Replacing the 50% Capital Gains Discount with the pre-1999 inflation adjustment system (such that taxes are paid on real gains to their full amount) is an easy win and should have been done a decade ago. It won’t raise much cash for government, but it will assist in keeping housing prices in check.

Restricting negative gearing to new builds will also help, but in the long run, much more substantial investments in infrastructure need to be made. By taxing trusts more aggressively the government will get some extra revenue but how much is unclear given their financial complexity, and the potential for exploitable loopholes.

The overhaul of the NDIS in an effort to combat ballooning costs is probably necessary. Without reform the scheme will cost more that $70b by the end of the decade. But this needs to be done in a way that doesn’t throw vulnerable Australians under the bus, which is no easy task."

On the establishment of the National Resilience and Science Council:

“Ambitious Australia provided the blueprint for the future of research and development. We now need the whole Government to be part of the implementation."

On the Budget more broadly:

"Tonight’s Budget gives with one hand but takes with the other. Additional funding for government science agencies is always welcome, as key foundations for Australian science. And we certainly support increased disbursements from the MRFF. This should have happened long ago.

But there is an overwhelming sense of uncertainty in the research and development industry as funding for non-medical research grants see a significant reduction. One third of the workforce has told us they are planning to leave the sector. And we have decades-long under-investment in R&D that simply hasn’t kept up with the real cost of doing research.

The Government says it's taking a responsible approach to securing Australia's resilience and intergenerational equity – backing our R&D sector is the only way to do that.

The Government also wants a Future Made in Australia. But increasingly our workforce doesn’t see a future here. Until the Ambitious Australia report recommendations are implemented in full with corresponding new investment, our industry will continue to lack the certainty it needs to deliver on that ambition.”

"The housing market is a complex system. Any tweaks must be checked for unintended consequences, else risk making housing less affordable. The proposed changes to negative gearing and CGT are designed to fast track more new homes. But, in the same way the 5% deposit scheme pushed up prices at the bottom end of the market, so too can poorly thought out tax changes have unintended consequences.  The proposed changes to negative gearing and CGT are cases in point.

Proposed changes to negative gearing and CGT are designed to disincentivise property investors, making room for owner occupiers. The only trouble is, 33% of Australian households are renters, and every renter needs a landlord. Take rental stock out of the market, and the rental crisis will only get worse.

Worse still, is the impact to new housing supply.  New apartment projects, where most of the new supply is forecast to occur, rely on presales to get construction funding. Take investors out of the market, and new projects won't make the presale targets to commence. So instead of increasing supply, disincentivising property investors has the opposite effect, stalling new projects that will struggle to attract owner occupiers necessary to get construction funding."

"The Medicare Levy threshold will be increased – by $1000-2000 – this will remove some low-income earners from the levy. However, for older people, over 65, the private health insurance rebate will be lowered – to the rebate provided to younger populations. The hope is to provide equity – however, this does not take health needs into account – with increasing out-of-pocket expenses for health care, now older people may be reticent to avail of health care they need and less likely to take up health insurance.

There is also a need to assess access to health and care based on an individual rather than combined household income – to ensure all individuals receive access to health and social care, under a person-centred care framework."

"My broad take is that this Budget seeks to reposition Labor as a government willing to pursue politically difficult structural reform - particularly around housing and tax - rather than leaning mainly on temporary cost-of-living relief. In many respects, that’s economically mature and overdue.

The permanency of the $250 Working Australians Tax Offset is a surprise, but modest in scale relative to the pressures households face. And it’s worth remembering that bracket creep remains a far larger revenue engine. In effect, the Budget hands back a small share of the revenue generated by non-indexed tax thresholds while leaving the underlying mechanism firmly intact.

The move on housing tax reform is politically bold, but more measured than many expected. Retaining negative gearing for new builds and phasing CGT changes is more nuanced than a blunt reduction in the current discount rate.

The Budget is clearly trying to improve affordability and ease rental pressures over the medium term by lifting supply and taking some heat out of investor demand. But that offers limited comfort to renters under acute financial strain right now, many of whom will see little immediate relief. Investor incentives may soften at the margin, though broader market conditions and price expectations will still dominate behaviour."

Resilience and Reform (but sorry Boomers) - a Responsible Budget in 2026-27

"Dr “Sunny” Jim Chalmers has brought down a responsible budget vowing not to slow the pace of reform due to the Iran War and subsequent global fuel crisis. However, the budget is not without its risks with an attack on the baby boomer holy trinity of negative gearing, capital gains tax (CGT) and family trusts. The Treasurer hopes the benefits to younger first home buyers looking to enter the housing market will make the budget popular and drown out the boomer concerns. 

Here’s a few highlights:

1. Do mention the war. The Treasurer naturally made much of the global economic uncertainty due to the Iran war but said that it made him more determined to undertake reform and build resilience in the Australian economy.
2. Take a walk on the (fuel) supply side – the Treasurer has introduced measures to help provide relief to motorists and business adversely impacted by higher fuel costs. This includes abolition of road user charges.
3. Future Made in Australia. The Government will continue an activist industry policy particularly in critical minerals and renewable energy under Industry Minister Tim Ayres.
4. Health wins. The effective Health Minister Mark Butler had big wins in the budget in terms of Medicare office expansions and more pharmaceuticals on the PBS.
5. Housing wins. The Treasurer has made home builds a major focus of the budget along with the tax changes, following on from the example of NSW Premier Chris Minns to dramatically increase housing supply.
6. Tax Reform – Tax cuts to 13.3 million workers -  tax offsets paid for by adjustments to the baby boomer holy trinity of negative gearing, capital gains tax (CGT) and family trusts. The Treasurer basically said “ok boomer the jig is up”.
7. Productivity is not the only thing, but in the long run it’s everything. The Treasurer introduced a major productivity package, simplifying regulation, cutting red tape, expanding national competition policy (so Australia acts as one single market not eight) and supporting investments in renewable energy, including solar power and batteries, AI and allowing superannuation funds to invest in energy and housing.
8. Responsible Savings - $36 billion cuts to NDIS – to streamline the scheme and have it better targeted, abolishing private health insurance rebates to the over 65s and trimming the public sector.
9. Defending the nation. A $53 billion boost in defence in response to a changing geopolitical environment.
10. The bottom line – a responsible budget curbing spendings but still preserving tax cuts. The budget papers offered some ‘brave’ forecasts on inflation and unemployment (assuming an end to the Iran war soon) that could easily come unstuck. The big political sell will be to the younger first home buyers and all whose derive income from labour not assets. However, the claims of inter-generational fairness will be criticised for denying the younger generations the chance to accumulate capital as the baby boomers and (some) gen Xers have done."