{"id":"au:budget:2026-27","name":"Australian Budget 2026-27","slug":"australian-budget-2026-27","collection":"budget","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":"2026-05-12","administeringDepartment":"Australian Treasury","currentVersion":{"id":451231,"registerId":"budget-2026-27","compilationNumber":"2026-27","startDate":"2026-05-12","status":"in_force","reasons":null,"registeredAt":"2026-05-11T23:00:00.000Z"},"sections":[{"sectionNumber":"budget-01","sectionType":"budget_page","heading":"Budget home","content":"Source: https://budget.gov.au/index.htm\n\n# Resilience and reform\n\nBuilding an economy that works for all Australians\n\nThe Treasurer delivered the Federal Budget on Tuesday 12 May 2026\n\n## [Budget documents](/content/documents.htm)\n\nPapers detailing planned revenue and spending for the coming financial year\n\n## [Overview](/content/overview/index.htm)\n\nOverview documents highlighting the key measures for this Budget\n\n## [Calculator](/content/calculator.htm)\n\nEstimate your tax cut by entering your annual taxable income in to the calculator\n\n## Budget themes\n\n![](dist/img/themes/icon-fuel.png)\n\n### [Fuel supply and security](content/01-fuel-supply-and-security.htm)\n\nResponding to the global oil shock\n\n![](dist/img/themes/icon-col.png)\n\n### [Cost of living](content/02-cost-of-living.htm)\n\nTaking pressure off Australians\n\n![](dist/img/themes/icon-productivity.png)\n\n### [Productivity](content/03-productivity.htm)\n\nMaking our economy more productive\n\n![](dist/img/themes/icon-tax.png)\n\n### [Tax reform](content/04-tax-reform.htm)\n\nTax reform for workers, businesses and future generations\n\n![](dist/img/themes/icon-care.png)\n\n### [Care and opportunity](content/05-care-and-opportunity.htm)\n\nStrengthening care and broadening opportunity\n\n![](dist/img/themes/icon-security.png)\n\n### [Security and investment](content/06-security-and-investment.htm)\n\nBuilding a resilient and secure Australia\n\n## Budget priorities\n\nUse this tool to show the most relevant measures for the topic selected\n\nIndividuals Households Business Industry Regional International\n\n### [New tax cuts](content/02-cost-of-living.htm#m1)\n\nMore tax cuts to all Australian taxpayers, with additional tax cuts in 2026 and 2027\n\nIndividuals Households Business Industry Regional International\n\n### [Boosting fuel and fertiliser security](/content/01-fuel-supply-and-security.htm#m1)\n\nSecuring fuel now and building reserves for the future\n\nIndividuals Households Business Industry Regional International\n\n### [Relieving pressure on fuel users](/content/01-fuel-supply-and-security.htm#m1)\n\nInterest-free loans to help manufacturing and logistics businesses\n\nIndividuals Households Business Industry Regional International\n\n### [Tax cut for Australian workers](/content/04-tax-reform.htm#m1)\n\n$250 Working Australians Tax Offset to help with cost of living\n\nIndividuals Households Business Industry Regional International\n\n### [Cheaper medicines](/content/02-cost-of-living.htm#m4)\n\nCutting the cost of life-saving medicines\n\nIndividuals Households Business Industry Regional International\n\n### [Building housing infrastructure](/content/02-cost-of-living.htm#m3)\n\nLocal housing infrastructure to support up to 65,000 new homes\n\nIndividuals Households Business Industry Regional International\n\n### [Reducing red tape](/content/03-productivity.htm#m2)\n\nCutting regulatory burden by $10.2 billion per year\n\nIndividuals Households Business Industry Regional International\n\n### [Lowering taxes for businesses](/content/04-tax-reform.htm#m2)\n\nNew measures lowering taxes for businesses and start-ups\n\nIndividuals Households Business Industry Regional International\n\n### [Helping more home owners](/content/02-cost-of-living.htm#m3)\n\nReforms to support an additional 75,000 homeowners\n\nIndividuals Households Business Industry Regional International\n\n### [Record funding for hospitals](/content/05-care-and-opportunity.htm#m3)\n\n$25 billion additional investment for public hospitals\n\nIndividuals Households Business Industry Regional International\n\n### [Better aged care](/content/05-care-and-opportunity.htm#m2)\n\nMore beds, more support packages and better care for older Australians\n\nIndividuals Households Business Industry Regional International\n\n### [Funding boost for defence](/content/06-security-and-investment.htm#m2)\n\nA record additional $53 billion investment in defence\n\nIndividuals Households Business Industry Regional International\n\n### [Significant road and rail projects](/content/06-security-and-investment.htm#m3)\n\n$8.6 billion for nationally significant road and rail projects\n\nIndividuals Households Business Industry Regional International\n\n### [Reserving gas exports](/content/01-fuel-supply-and-security.htm#m3)\n\nReserving 20 per cent of gas exports for Australians\n\nIndividuals Households Business Industry Regional International\n\n### [Accelerating approvals](/content/03-productivity.htm#m1)\n\nFaster environmental and foreign investment approvals\n\nIndividuals Households Business Industry Regional International","sortOrder":1},{"sectionNumber":"budget-02","sectionType":"budget_page","heading":"Budget documents","content":"Source: https://budget.gov.au/content/documents.htm\n\n# Budget documents\n\nThe Treasurer delivered the Federal Budget on Tuesday 12 May 2026\n\n## Budget papers\n\n### [Budget Strategy and Outlook](bp1/index.htm)\n\nBudget Paper No. 1\n\n### [Budget Measures](bp2/index.htm)\n\nBudget Paper No. 2\n\n### [Federal Financial Relations](bp3/index.htm)\n\nBudget Paper No. 3\n\n### [Agency Resourcing](bp4/index.htm)\n\nBudget Paper No. 4\n\n### [Women's Budget Statement](womens-statement/index.htm)\n\n## Media\n\n### [Treasurer's speech to Parliament](https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/speeches/2026-27-budget-speech-parliament-house-canberra \"Treasury portfolio ministers - Budget Speech 2026-27\")\n\n### [Ministerial media releases](media.htm)\n\n## Ministerial statements\n\n### [Ministerial statements](ministerial-statements/index.htm)\n\n## Portfolio papers\n\n### [Portfolio Budget Statements](pbs/index.htm)\n\n## Resources\n\n### [Overview](overview/index.htm)\n\n### [Fact sheets](/content/downloads.htm#fact-sheets)\n\n### [Downloads](downloads.htm)\n\n### [Appropriation Bills](appropriation-bills/index.htm)\n\n## Outlooks and outcomes\n\n### [Mid-Year Economic and Fiscal Outlook](myefo/index.htm)\n\n### [Final Budget Outcome](fbo/index.htm)\n\n### [Portfolio Supplementary Additional Estimates Statements](psaes/index.htm)","sortOrder":2},{"sectionNumber":"budget-03","sectionType":"budget_page","heading":"Downloads","content":"Source: https://budget.gov.au/content/downloads.htm\n\n# Downloads\n\nBudget Papers\n\nPublication/Part\n\nDownloads\n\nBudget Paper No. 1: Budget Strategy and Outlook\n\n[PDF 6.99 MB](/content/bp1/download/bp1_2026-27.pdf)\n\nBudget Paper No. 2: Budget Measures\n\n[PDF 1.96 MB](/content/bp2/download/bp2_2026-27.pdf)\n\nBudget Paper No. 3: Federal Financial Relations\n\n[PDF 4.81 MB](/content/bp3/download/bp3_2026-27.pdf)\n\nBudget Paper No. 4: Agency Resourcing\n\n[PDF 5.92 MB](/content/bp4/download/bp4_2026_27_consolidated.pdf)\n\nWomen’s Budget Statement\n\n[PDF 0.97 MB](/content/womens-statement/download/womens-budget-statement-2026-27.pdf)\n\nBudget Papers chart data\n\n[ZIP 291 kB](/content/download/chart-data-final.zip)\n\nOverview\n\nPublication/Part\n\nDownloads\n\nBudget overview - Resilience and reform\n\n[PDF 14.7 MB](/content/overview/download/budget-overview-2026-27.pdf)\n[DOCX 1.62 MB](/content/overview/download/budget-overview-2026-27.docx)\n\nFact sheets\n\nPublication/Part\n\nDownloads\n\nProductivity Package\n\n[PDF 944 kB](/content/factsheets/download/factsheet-productivity.pdf)\n[DOCX 1.15 MB](/content/factsheets/download/factsheet-productivity.docx)\n\nBacking small businesses to grow, compete and build resilience\n\n[PDF 1.11 MB](/content/factsheets/download/factsheet-backing-small-business.pdf)\n[DOCX 2.29 MB](/content/factsheets/download/factsheet-backing-small-business.docx)\n\nWhole-of-Government Regulatory Reform Agenda\n\n[PDF 0.97 MB](/content/factsheets/download/factsheet-regulatory-reform.pdf)\n[DOCX 1.42 MB](/content/factsheets/download/factsheet-regulatory-reform.docx)\n\nTax explainer - Minimum tax on discretionary trusts\n\n[PDF 358 kB](/content/factsheets/download/tax-explainers-minimum-tax-discretionary-trusts.pdf)\n[DOCX 170 kB](/content/factsheets/download/tax-explainers-minimum-tax-discretionary-trusts.docx)\n\nTax explainer - Negative Gearing and Capital Gains Tax Reform\n\n[PDF 432 kB](/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf)\n[DOCX 182 kB](/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.docx)\n\nTax explainer - New tax cuts for Australian workers\n\n[PDF 432 kB](/content/factsheets/download/tax-explainers-new-tax-cuts-workers.pdf)\n[DOCX 253 kB](/content/factsheets/download/tax-explainers-new-tax-cuts-workers.docx)\n\nTax explainer - Small business Capital Gains Tax and Discretionary Trusts\n\n[PDF 466 kB](/content/factsheets/download/tax-explainers-cgt-trusts-impacts.pdf)\n[DOCX 735 kB](/content/factsheets/download/tax-explainers-cgt-trusts-impacts.docx)","sortOrder":3},{"sectionNumber":"budget-04","sectionType":"budget_page","heading":"Overview","content":"Source: https://budget.gov.au/content/overview/index.htm\n\n# Overview\n\n## Resilience and reform\n\nThe conflict in the Middle East has severely disrupted global oil supplies and is contributing to higher inflation, slower growth and extreme economic uncertainty at home and abroad. At the same time, there are big structural changes unfolding in areas like energy and technology, and longstanding challenges when it comes to productivity, intergenerational equity and access to home ownership that demand our attention.\n\nThis Budget is about getting us through the global oil shock and taking pressure off Australians, while continuing to build a stronger economy, better tax system, fairer housing market and a more sustainable budget.\n\nPublication\n\nDownload\n\nBudget overview - Resilience and reform\n\n[PDF 14.7 MB](/content/overview/download/budget-overview-2026-27.pdf)\n[DOCX 1.62 MB](/content/overview/download/budget-overview-2026-27.docx)\n\n## Budget themes\n\n### [Fuel supply and security](/content/01-fuel-supply-and-security.htm)\n\nResponding to the global oil shock\n\n### [Cost of living](/content/02-cost-of-living.htm)\n\nTaking pressure off Australians\n\n### [Productivity](/content/03-productivity.htm)\n\nMaking our economy more productive\n\n### [Tax reform](/content/04-tax-reform.htm)\n\nTax reform for workers, businesses and future generations\n\n### [Care and opportunity](/content/05-care-and-opportunity.htm)\n\nStrengthening care and broadening opportunity\n\n### [Security and investment](/content/06-security-and-investment.htm)\n\nBuilding a resilient and secure Australia","sortOrder":4},{"sectionNumber":"budget-05","sectionType":"budget_page","heading":"Budget Paper 1: Budget Strategy and Outlook","content":"Source: https://budget.gov.au/content/bp1/index.htm\n\n# Budget Paper No. 1\n\nBudget Strategy and Outlook\n\n![](/dist/img/covers/budget 2026-27_cover_bp1.png)\n\nPublication/Part\n\nDownloads\n\n**Budget Paper No. 1: Budget Strategy and Outlook**\n\n[PDF 6.99 MB](/content/bp1/download/bp1_2026-27.pdf)\n\nPreliminaries\n\n[PDF 275 kB](/content/bp1/download/bp1_prelims.pdf)\n[DOCX 162 kB](/content/bp1/download/bp1_prelims.docx)\n\nStatement 1: Overview\n\n[PDF 640 kB](/content/bp1/download/bp1_bs-1.pdf)\n[DOCX 644 kB](/content/bp1/download/bp1_bs-1.docx)\n\nStatement 2: Economic Outlook\n\n[PDF 533 kB](/content/bp1/download/bp1_bs-2.pdf)\n[DOCX 1.63 MB](/content/bp1/download/bp1_bs-2.docx)\n\nAdditional data: Nominal GDP (online only)\n\n[XLSX 21 kB](/content/bp1/download/bp1_s2-data-nominal-GDP.xlsx)\n\nStatement 3: Fiscal Strategy and Outlook\n\n[PDF 830 kB](/content/bp1/download/bp1_bs-3.pdf)\n[DOCX 1.44 MB](/content/bp1/download/bp1_bs-3.docx)\n\nStatement 4: Tax reform for workers, businesses and future generations\n\n[PDF 861 kB](/content/bp1/download/bp1_bs-4.pdf)\n[DOCX 2.34 MB](/content/bp1/download/bp1_bs-4.docx)\n\nStatement 5: Revenue\n\n[PDF 641 kB](/content/bp1/download/bp1_bs-5.pdf)\n[DOCX 546 kB](/content/bp1/download/bp1_bs-5.docx)\n\nTable 1: Australian Government (cash) receipts (online only)\n\n[CSV 5 kB](/content/bp1/download/bp1_s5-online_t1.csv)\n\nTable 2: Major categories of (cash) receipts as a proportion of gross domestic product (online only)\n\n[CSV 5 kB](/content/bp1/download/bp1_s5-online_t2.csv)\n\nTable 3: Australian Government (accrual) revenue (online only)\n\n[CSV 5 kB](/content/bp1/download/bp1_s5-online_t3.csv)\n\nTable 4: Major categories of (accrual) revenue as a proportion of gross domestic product (online only)\n\n[CSV 3 kB](/content/bp1/download/bp1_s5-online_t4.csv)\n\nStatement 6: Expenses and Net Capital Investment\n\n[PDF 788 kB](/content/bp1/download/bp1_bs-6.pdf)\n[DOCX 521 kB](/content/bp1/download/bp1_bs-6.docx)\n\nStatement 7: Debt Statement\n\n[PDF 399 kB](/content/bp1/download/bp1_bs-7.pdf)\n[DOCX 426 kB](/content/bp1/download/bp1_bs-7.docx)\n\nStatement 8: Forecasting Performance and Sensitivity Analysis\n\n[PDF 356 kB](/content/bp1/download/bp1_bs-8.pdf)\n[DOCX 1.63 MB](/content/bp1/download/bp1_bs-8.docx)\n\nStatement 9: Statement of Risks\n\n[PDF 754 kB](/content/bp1/download/bp1_bs-9.pdf)\n[DOCX 269 kB](/content/bp1/download/bp1_bs-9.docx)\n\nStatement 10: Australian Government Budget Financial Statements\n\n[PDF 1.08 MB](/content/bp1/download/bp1_bs-10.pdf)\n[DOCX 811 kB](/content/bp1/download/bp1_bs-10.docx)\n\nStatement 11: Historical Australian Government Data\n\n[PDF 649 kB](/content/bp1/download/bp1_bs-11.pdf)\n[DOCX 330 kB](/content/bp1/download/bp1_bs-11.docx)\n\nNotes\n\n[PDF 149 kB](/content/bp1/download/bp1_notes.pdf)\n[DOCX 51 kB](/content/bp1/download/bp1_notes.docx)","sortOrder":5},{"sectionNumber":"budget-06","sectionType":"budget_page","heading":"Budget Paper 2: Budget Measures","content":"Source: https://budget.gov.au/content/bp2/index.htm\n\n# Budget Paper No. 2\n\nBudget Measures\n\n![](/dist/img/covers/budget 2026-27_cover_bp2.png)\n\nPublication/Part\n\nDownloads\n\n**Budget Paper No. 2: Budget Measures**\n\n[PDF 1.96 MB](/content/bp2/download/bp2_2026-27.pdf)\n\nPreliminaries\n\n[PDF 327 kB](/content/bp2/download/bp2_01_prelims.pdf)\n[DOCX 263 kB](/content/bp2/download/bp2_01_prelims.docx)\n\nPart 1: Receipt Measures\nPart 2: Payment Measures\n\n[PDF 1.43 MB](/content/bp2/download/bp2_02_receipt_payment.pdf)\n[DOCX 494 kB](/content/bp2/download/bp2_02_receipt_payment.docx)\n\nNotes\n\n[PDF 142 kB](/content/bp2/download/bp2_03_notes.pdf)\n[DOCX 52 kB](/content/bp2/download/bp2_03_notes.docx)","sortOrder":6},{"sectionNumber":"budget-07","sectionType":"budget_page","heading":"Budget Paper 3: Federal Financial Relations","content":"Source: https://budget.gov.au/content/bp3/index.htm\n\n# Budget Paper No. 3\n\nFederal Financial Relations\n\n![](/dist/img/covers/budget 2026-27_cover_bp3.png)\n\nPublication/Part\n\nDownloads\n\n**Budget Paper No. 3: Federal Financial Relations**\n\n[PDF 4.81 MB](/content/bp3/download/bp3_2026-27.pdf)\n\nPreliminaries\n\n[PDF 278 kB](/content/bp3/download/bp3_01_prelims.pdf)\n[DOCX 133 kB](/content/bp3/download/bp3_01_prelims.docx)\n\nPart 1: Australia’s Federal Relations\n\n[PDF 357 kB](/content/bp3/download/bp3_02_part_1.pdf)\n[DOCX 250 kB](/content/bp3/download/bp3_02_part_1.docx)\n\nPart 2: Payments for specific purposes\n\n[PDF 297 kB](/content/bp3/download/bp3_03_part_2_overview.pdf)\n[DOCX 74 kB](/content/bp3/download/bp3_03_part_2_overview.docx)\n\nHealth\n\n[PDF 631 kB](/content/bp3/download/bp3_04_part_2_health.pdf)\n[DOCX 190 kB](/content/bp3/download/bp3_04_part_2_health.docx)\n\nEducation\n\n[PDF 329 kB](/content/bp3/download/bp3_05_part_2_education.pdf)\n[DOCX 82 kB](/content/bp3/download/bp3_05_part_2_education.docx)\n\nSkills and workforce development\n\n[PDF 253 kB](/content/bp3/download/bp3_06_part_2_skills.pdf)\n[DOCX 68 kB](/content/bp3/download/bp3_06_part_2_skills.docx)\n\nCommunity services\n\n[PDF 308 kB](/content/bp3/download/bp3_07_part_2_community.pdf)\n[DOCX 84 kB](/content/bp3/download/bp3_07_part_2_community.docx)\n\nAffordable housing\n\n[PDF 285 kB](/content/bp3/download/bp3_08_part_2_affordable.pdf)\n[DOCX 75 kB](/content/bp3/download/bp3_08_part_2_affordable.docx)\n\nInfrastructure\n\n[PDF 600 kB](/content/bp3/download/bp3_09_part_2_infrastructure.pdf)\n[DOCX 163 kB](/content/bp3/download/bp3_09_part_2_infrastructure.docx)\n\nEnvironment, energy and water\n\n[PDF 616 kB](/content/bp3/download/bp3_10_part_2_environment.pdf)\n[DOCX 180 kB](/content/bp3/download/bp3_10_part_2_environment.docx)\n\nContingent payments\n\n[PDF 208 kB](/content/bp3/download/bp3_11_part_2_contingent.pdf)\n[DOCX 53 kB](/content/bp3/download/bp3_11_part_2_contingent.docx)\n\nOther payments\n\n[PDF 471 kB](/content/bp3/download/bp3_12_part_2_other.pdf)\n[DOCX 130 kB](/content/bp3/download/bp3_12_part_2_other.docx)\n\nPart 3: General revenue assistance\n\n[PDF 317 kB](/content/bp3/download/bp3_13_part_3.pdf)\n[DOCX 73 kB](/content/bp3/download/bp3_13_part_3.docx)\n\nAppendix A: Parameters and further information\n\n[PDF 262 kB](/content/bp3/download/bp3_14_appendix_a.pdf)\n[DOCX 58 kB](/content/bp3/download/bp3_14_appendix_a.docx)\n\nAppendix B: Total payments to the states by function (online only)\n\n[PDF 308 kB](/content/bp3/download/bp3_15_appendix_b_online.pdf)\n[DOCX 184 kB](/content/bp3/download/bp3_15_appendix_b_online.docx)\n\nAppendix C: Supplementary Tables (online only)\n\n[PDF 403 kB](/content/bp3/download/bp3_16_appendix_c_online.pdf)\n[DOCX 131 kB](/content/bp3/download/bp3_16_appendix_c_online.docx)\n\nAppendix D: Debt transactions (online only)\n\n[PDF 397 kB](/content/bp3/download/bp3_17_appendix_d_online.pdf)\n[DOCX 113 kB](/content/bp3/download/bp3_17_appendix_d_online.docx)\n\nAppendix E: Appropriations and conditions (online only)\n\n[PDF 219 kB](/content/bp3/download/bp3_18_appendix_e_online.pdf)\n[DOCX 158 kB](/content/bp3/download/bp3_18_appendix_e_online.docx)\n\nNotes\n\n[PDF 158 kB](/content/bp3/download/bp3_18_notes.pdf)\n[DOCX 42 kB](/content/bp3/download/bp3_18_notes.docx)","sortOrder":7},{"sectionNumber":"budget-08","sectionType":"budget_page","heading":"Budget Paper 4: Agency Resourcing","content":"Source: https://budget.gov.au/content/bp4/index.htm\n\n# Budget Paper No. 4\n\nAgency Resourcing\n\n![](/dist/img/covers/budget 2026-27_cover_bp4.png)\n\nPublication/Part\n\nDownloads\n\n**Budget Paper No. 4: Agency Resourcing**\n\n[PDF 5.92 MB](/content/bp4/download/bp4_2026_27_consolidated.pdf)\n\nPreliminaries\n\n[PDF 230 kB](/content/bp4/download/bp4_01_prelims.pdf)\n[DOCX 154 kB](/content/bp4/download/bp4_01_prelims.docx)\n\nPreface\n\n[PDF 332 kB](/content/bp4/download/bp4_02_preface.pdf)\n[DOCX 158 kB](/content/bp4/download/bp4_02_preface.docx)\n\nIntroduction and Guide to Budget Paper No. 4\n\n[PDF 1.03 MB](/content/bp4/download/bp4_03_introduction_and_guide.pdf)\n[DOCX 1.37 MB](/content/bp4/download/bp4_03_introduction_and_guide.docx)\n\nPart 1: Agency Financial Resourcing\n\n[PDF 209 kB](/content/bp4/download/bp4_04_agency_financial_resourcing.pdf)\n[DOCX 53 kB](/content/bp4/download/bp4_04_agency_financial_resourcing.docx)\n\nAgency resourcing table\n\n[PDF 1.97 MB](/content/bp4/download/bp4_05_agency_resourcing_tables.pdf)\n[DOCX 490 kB](/content/bp4/download/bp4_05_agency_resourcing_tables.docx)\n\nSpecial appropriations table - overview\n\n[PDF 131 kB](/content/bp4/download/bp4_06_special_appropriations_table_overview.pdf)\n[DOCX 41 kB](/content/bp4/download/bp4_06_special_appropriations_table_overview.docx)\n\nSpecial appropriations table\n\n[PDF 358 kB](/content/bp4/download/bp4_07_special_appropriations_table_tables.pdf)\n[DOCX 84 kB](/content/bp4/download/bp4_07_special_appropriations_table_tables.docx)\n\nSpecial accounts table - overview\n\n[PDF 131 kB](/content/bp4/download/bp4_08_special_accounts_table_overview.pdf)\n[DOCX 44 kB](/content/bp4/download/bp4_08_special_accounts_table_overview.docx)\n\nSpecial accounts table - summary\n\n[PDF 131 kB](/content/bp4/download/bp4_09a_special_accounts_table_summary.pdf)\n[DOCX 58 kB](/content/bp4/download/bp4_09a_special_accounts_table_summary.docx)\n\nSpecial accounts table\n\n[PDF 610 kB](/content/bp4/download/bp4_09b_special_accounts_table.pdf)\n[DOCX 167 kB](/content/bp4/download/bp4_09b_special_accounts_table.docx)\n\nPart 2: Staffing of Agencies\n\n[PDF 320 kB](/content/bp4/download/bp4_10_staffing_of_agencies.pdf)\n[DOCX 82 kB](/content/bp4/download/bp4_10_staffing_of_agencies.docx)\n\nPart 3: Expenses and Net Capital Investment\n\n[PDF 385 kB](/content/bp4/download/bp4_11_expenses_and_net_capital_investment.pdf)\n[DOCX 85 kB](/content/bp4/download/bp4_11_expenses_and_net_capital_investment.docx)\n\nAppendix A: Agency Outcome Statements\n\n[PDF 408 kB](/content/bp4/download/bp4_12_app_a.pdf)\n[DOCX 85 kB](/content/bp4/download/bp4_12_app_a.docx)","sortOrder":8},{"sectionNumber":"budget-09","sectionType":"budget_page","heading":"Fuel supply and security","content":"Source: https://budget.gov.au/content/01-fuel-supply-and-security.htm\n\n# Fuel supply and security\n\nResponding to the global oil shock\n\nPrint or save page\n\nOn this page\n\n## Boosting Australia’s fuel security\n\nThe crisis in the Middle East has disrupted global oil supply. The Government is strengthening Australia’s fuel supply now and into the future through our $14.8 billion Strengthening Australia’s Fuel Resilience Package.\n\n### Securing fuel and fertiliser now\n\nThe Government has secured more than a billion extra litres of fuel so far for March to June by:\n\n-   relaxing the Minimum Stockholding Obligation\n-   underwriting additional cargoes, and\n-   adjusting fuel standards, enabling more Australian‑produced fuels to be used here.\n\nFuel and fertiliser shipments are en route to Australia through the new $7.5 billion ($5 billion USD) Fuel and Fertiliser Security Facility. So far, Export Finance Australia has secured over 450 million litres of additional diesel and around 100 million litres of additional jet fuel through this facility.\n\n### Building up reserves for the future\n\n-   We are expanding the Minimum Stockholding Obligation with an additional 10 days’ supply for diesel, jet fuel and petrol.\n-   We are establishing the $3.2 billion government‑controlled Australian Fuel Security Reserve, which will hold around 1 billion litres of diesel and jet fuel to provide an additional buffer during any future crisis. Together through these efforts, Australia will increase its diesel and jet fuel reserves to 50 days.\n-   We have strengthened the Fuel Security Services Payment to protect the future of our two refineries and committed $10 million for feasibility studies into expanding our domestic refining capacity.\n-   We are also providing $34.7 million to manage Australia’s fuel security framework, including oversight of the Fuel Security Services Payment and the Minimum Stockholding Obligation.\n\n### Ensuring a coordinated national response\n\nThe Government is facilitating an orderly response to the international supply chain disruptions, coordinating planning across states and territories and strengthening our trading partnerships. The National Fuel Security Plan agreed by National Cabinet establishes a coordinated four‑stage approach to safeguarding Australia’s fuel supply, supported by the Fuel Supply Taskforce.\n\nTo raise awareness of the National Fuel Security Plan and to help Australians feel prepared and supported, the Government has launched the National Fuel Security Campaign. The campaign encourages Australians to adopt simple, practical behaviours to use less fuel, helping our supply go further and saving fuel for our truckies, farmers and essential services.\n\n### Relieving immediate pressure on fuel users\n\n-   To keep our trucks, trains and planes moving and critical production online, the Government is helping manufacturing and logistics businesses manage cashflow pressures with interest‑free loans from the National Reconstruction Fund’s (NRF) $1 billion Economic Resilience Program. This complements the $5 billion committed to the NRF’s Net Zero Fund since last Budget.\n-   We have also more than halved the fuel excise and reduced the heavy vehicle road user charge to zero for three months, and deferred full cost recovery arrangements for agricultural export services.\n-   To support supply chain efficiency, the Government will streamline the Australian Competition and Consumer Commission’s (ACCC) powers to allow industry to better coordinate during exceptional circumstances.\n-   The Government has also empowered the Fair Work Commission to make orders to support more timely adjustments to fuel terms in road transport contracts, supporting small business.\n\nTo support businesses’ and individuals’ purchasing options, the Government has increased reporting on fuel availability and prices through ACCC and Fuel Supply Taskforce reporting. We are also regularly engaging with industry through the Taskforce and other forums to ensure the policy response is timely, well targeted and appropriate.\n\n## Strengthening supply chains\n\nAustralia’s economy depends on secure and reliable supply chains. In a more volatile global environment, the Government is taking targeted action to keep essential goods moving while strengthening resilience for the future. This approach focuses on early action, close partnership with industry, and interventions that support markets rather than replace them.\n\n### Strengthening partnerships with trading partners\n\nSince the conflict in the Middle East began, the Government has facilitated supply of 250,000 tonnes of agricultural urea for Australian farmers and signed landmark supply chain commitments with Japan, the Republic of Korea, Singapore, Malaysia and Brunei Darussalam, keeping critical goods flowing despite global instability.\n\n### Improving freight resilience\n\nMoving more freight by rail or ship improves fuel efficiency and supply chain resilience.\n\nThe Government is providing $55 million for a Transport Resilience and Capacity Kickstart pilot program to incentivise greater volumes of ship and rail freight. We will also progress improvements to interstate rail operations and connectivity, and biosecurity border processes will be streamlined to help get fertiliser to farms, faster.\n\nThe Government will accelerate heavy vehicle reforms through National Competition Policy to increase heavy vehicle transport productivity and support the uptake of zero emissions heavy vehicles.\n\n## Building resilience\n\nThe Government is improving Australia’s longer‑term resilience to energy shocks, securing more affordable gas and shielding Australians from the worst impacts of climate change through our transition to net zero.\n\nAustralians will have more choice in how they power their homes, businesses and vehicles, reducing their dependence on imported fuels and vulnerability to high global energy prices.\n\n### Building energy sovereignty\n\nAustralia continues to take steps to secure greater energy sovereignty, delivering:\n\n-   6.8 gigawatts of renewable energy in 2025, and more than 370,000 home batteries through the Cheaper Home Batteries program since 1 July 2025, providing over 10 gigawatt hours of new capacity.\n-   Over 4 million households currently generate their own solar energy, and two million are expected to have a battery by 2030.\n\nThe Government is announcing a 20 per cent domestic gas reservation so that LNG exporters supply a proportion of production to the domestic market. The domestic reservation scheme will commence on 1 July 2027, with final consultation on legislation throughout June and July. This will ensure Australian gas users have access to a stable and affordable supply of energy and will grow our energy resilience and industrial capabilities.\n\nAlongside implementation of a domestic gas reservation, the Government will streamline gas regulatory frameworks, with the reservation superseding the Australian Domestic Gas Security Mechanism and Heads of Agreements, and enabling further reform to the Gas Market Code.\n\n### Making more clean fuels here\n\nDiversifying our energy supply away from imported fuels will improve our economy’s resilience to future oil shocks.\n\n-   The Government is delivering the $1.1 billion Cleaner Fuels Program to provide production support to the domestic low carbon liquid fuels industry.\n-   We are also progressing the $1 billion Round 2 of the Hydrogen Headstart program to provide revenue support for large‑scale renewable hydrogen projects.\n-   We are continuing to develop a domestic low carbon liquid fuel industry, along with a green fuel bunkering strategy. Working with industry, we will introduce a demand measure that provides certainty for new Australian low carbon liquid fuel production and stimulates investment in new, clean fuel refining capacity. This will reduce our reliance on imported fuels, improving the resilience of our domestic transport industry.\n\n### Electrifying freight and transit\n\n-   The Government will transition the arrangements to support electric cars to a permanent 25 per cent fringe benefits tax (FBT) discount for eligible electric cars costing over $75,000 from 1 April 2027, and for all eligible electric cars from 1 April 2029.\n-   Electric cars costing up to $75,000 will continue to receive a full FBT exemption, provided the arrangement commences before 1 April 2029. Existing arrangements will not be affected.\n-   All eligible cars will retain the FBT discount in place when the fringe benefit arrangement starts, for the life of the arrangement.\n\nThese changes reflect the recommendations of the statutory review of the electric car discount policy and will further incentivise the supply of more affordable electric cars, while moving to more sustainable settings for the future.\n\nWe are supporting Australia Post to electrify its delivery fleet with a further $40.5 million investment. This adds to work underway to make it easier for Australians to charge their electric vehicles by committing $40 million to install more kerbside and regional chargers.\n\n## Budget themes\n\nFuel supply and security [Cost of living](02-cost-of-living.htm) [Productivity](03-productivity.htm) [Tax reform](04-tax-reform.htm) [Care and opportunity](05-care-and-opportunity.htm) [Security and investment](06-security-and-investment.htm)\n\n[Back to top](#masthead-top)","sortOrder":9},{"sectionNumber":"budget-10","sectionType":"budget_page","heading":"Cost of living","content":"Source: https://budget.gov.au/content/02-cost-of-living.htm\n\n# Cost of living\n\nTaking pressure off Australians\n\nPrint or save page\n\nOn this page\n\n## New tax cuts to help with the cost of living\n\n### A new tax cut for every Australian worker\n\nThe Working Australians Tax Offset (WATO) provides an additional tax cut of up to $250 for working Australians on top of the tax cuts in the 2024-25 Budget and the two upcoming rounds announced in the 2025-26 Budget. This will benefit over 13 million Australian workers.\n\nThe WATO is a permanent, annual tax offset of up to $250 from the 2027-28 income year for all Australian workers. This increases the effective tax‑free threshold for Australian workers by nearly $1,800 to $19,985 (or up to $24,985 for workers eligible for the Low Income Tax Offset). Of the 13 million Australian workers who receive the WATO, 97 per cent are expected to receive the full $250 offset.\n\n### Tax cuts for every taxpayer starting 1 July 2026\n\nThe Government is rolling out two more tax cuts for every Australian taxpayer.\n\n-   From 1 July 2026, the 16 per cent tax rate on taxable income between $18,201 and $45,000 will drop to 15 per cent.\n-   From 1 July 2027, the tax rate will drop to 14 per cent.\n\nEvery Australian taxpayer will receive a tax cut of up to $268 from 1 July 2026, then up to $536 every year from 1 July 2027, compared to the 2024-25 tax settings.\n\n### Lower, simpler taxes with a $1,000 instant tax deduction\n\nThe Government is also introducing a $1,000 instant tax deduction to deliver lower and simpler taxes for workers from 2026-27. 6.2 million workers, or 42 per cent of taxpayers, will benefit from an average tax saving of $205 for 2026-27.\n\nThe instant tax deduction allows workers to lower their taxable income from work by $1,000 without keeping receipts when they lodge their tax return. It will make tax time simpler and deliver more cost‑of‑living relief for workers from 2026-27.\n\n![](/dist/img/cameos/cameo-kerry-matt.jpg)\n\n### Case study: Instant tax deduction\n\nKerry and Matt both work and share looking after their young daughter. Kerry is a cyber security engineer earning $140,000 a year. She incurs $800 in self‑education costs to keep her skills current. Matt is a pharmacy nurse earning $90,000. He sometimes drives his car to home visits and incurs $450 in work‑related car expenses.\n\nThanks to the instant tax deduction, from 2026-27 onwards they both receive a $1,000 deduction without needing to keep records of their work‑related expenses. Their combined tax bill for 2026-27 falls by $254.\n\n### Combined benefits of five tax cuts\n\nThe Government is cutting taxes five times to help workers keep more of what they earn. Combined with the first round of tax cuts from 1 July 2024 and the additional tax cuts from 1 July 2026 and 1 July 2027, the WATO will mean an Australian worker on average earnings ($81,245) will receive a tax cut of $1,978 in 2026-27 and $2,496 from 2027-28, compared to 2023-24 tax settings.\n\nCombined with the $1,000 instant tax deduction, an Australian worker on average earnings who receives the average benefit from the instant tax deduction would be $2,701 better off in 2027-28. If this worker received the maximum benefit from the instant tax deduction, they would be $2,816 better off after the five rounds of tax cuts.\n\nAn Australian worker on average earnings is expected to pay up to $38,977 less tax from 2024-25 to 2036-37, relative to 2023-24 tax settings.\n\n### Case study: Combined benefits of five tax cuts\n\nDean is a mechanic and has taxable income of $70,000 per year, after claiming $300 in work‑related expenses. He received a tax cut of $1,429 in both 2024-25 and 2025-26 from the first round of tax cuts, compared with the 2023-24 tax settings. When combined with the new $250 WATO and the two upcoming rounds of tax cuts, his saving will grow to $2,215 per year from 2027-28. Dean will further reduce his tax by $224 per year by using the $1,000 instant tax deduction.\n\n![](/dist/img/cameos/cameo-dean.jpg)\n\n## Helping with the cost of fuel\n\n### Taking the sting out of fuel prices\n\nThe Government has delivered a $2.9 billion package to more than halve the fuel excise and reduce the heavy vehicle road user charge to zero for three months from 1 April 2026. Excise on petrol and diesel has fallen from 52.6 to 20.6 cents per litre. The states and territories will provide the Commonwealth up to $400 million to support the fuel excise reduction.\n\n### A fair go for consumers and small businesses\n\nThe Government has directed the ACCC to undertake weekly reporting on retail fuel prices. We have also doubled the maximum penalties for major breaches of competition and consumer laws to $100 million and are providing more resourcing for enforcement.\n\nThe Government is also introducing penalties for breaches of the Oil Code of Conduct.\n\n### Support for businesses\n\nThe ATO is streamlining access to temporary relief from tax obligations for eligible businesses until 30 June 2026. This includes more generous payment plans, remission of interest and penalties, support in varying pay as you go (PAYG) instalments where there has been a reduction in taxable income, and a new dedicated channel for businesses to access relief.\n\nSome compliance actions will also be limited across the worst affected industries, and debt collection actions may be paused where appropriate.\n\n![](/dist/img/cameos/cameo-anjali.jpg)\n\n### Case study: Helping with the cost of fuel\n\nAnjali is a teacher and drives to work in her small petrol hatchback. On average, she needs to fill her 40‑litre tank once a week. Under the changes, Anjali saves around $14 in excise and GST per tank and around $170 over the three‑month period.\n\n## More homes and a fair go for first home buyers\n\n### Helping more Australians own their own home\n\nIn this Budget the Government is reforming negative gearing and capital gains tax concessions. These tax changes are estimated to support an additional 75,000 homeowners over the decade.\n\n### Building more homes\n\nThe Government is establishing a new $2 billion Local Infrastructure Fund to help local governments and state utilities build essential infrastructure to support new housing - including by connecting essential services such as water, power, sewerage and roads. This funding will support up to 65,000 homes over the decade and brings the Government’s total investment in housing‑enabling infrastructure to $6.3 billion.\n\n### Banning foreign investors from buying existing homes\n\nThe Government is extending the ban on foreign buyers purchasing established homes until mid‑2029.\n\n### Making renting fairer and more affordable\n\nThe Government is continuing to work with states and territories to harmonise and strengthen renters’ rights across Australia through A Better Deal for Renters.\n\nThe Government has also delivered the first back‑to‑back increases in Commonwealth Rent Assistance (CRA) in more than 30 years and continues to support over 1.4 million renters through CRA.\n\n### Securing more housing for Australians doing it tough\n\nThe Government is investing $59.4 million to help Community Housing Providers provide social housing for over 4,000 young people aged 16-24 who are at risk of or experiencing homelessness.\n\nThis Budget also releases a further $100 million from the Housing Australia Future Fund to improve the quality of housing for First Nations Australians in remote communities.\n\n## More affordable and accessible healthcare\n\n### Cheaper medicines\n\nThe Government is investing $5.9 billion in this Budget to list new medicines on the PBS, including treatments for cystic fibrosis, chronic kidney disease, various cancers and more. This includes permanently cutting the cost of COVID‑19 oral antiviral medicines. Since 1 July 2022, the Government has funded 437 new or amended PBS medicines.\n\nThe Government is also providing $449.3 million to list the respiratory syncytial virus (RSV) vaccine Arexvy® for eligible older Australians on the National Immunisation Program to protect against respiratory infection caused by RSV.\n\n### Record funding for public hospitals\n\nThe Government is delivering a landmark $25 billion in additional funding for state and territory hospitals to reach a record $220.3 billion over five years.\n\n### Investing in Medicare Urgent Care Clinics\n\nThe Government is investing $1.8 billion and $580.2 million each year ongoing to secure the future of Australia’s 137 Medicare Urgent Care Clinics - making them a permanent feature of Australia’s health system.\n\n### Case study: Cheaper medicines\n\nKen has severe asthma. Now that the vaccine for RSV is available to eligible older Australians through the National Immunisation Program, he can receive this important vaccination for free when he goes to the GP, an immunisation clinic or a participating pharmacy. This will help protect him, his family and his community from severe disease caused by this common illness.\n\n![](/dist/img/cameos/cameo-ken.jpg)\n\n## Growing wages\n\n### Increases to minimum and award wages\n\nFor the current 2026 Annual Wage Review, the Government has recommended the Fair Work Commission award an economically sustainable real wage increase to Australia’s award workers.\n\n### Addressing the gender pay gap\n\nThe Government is supporting a historic review to address gender pay gaps. The Fair Work Commission has found historical gender undervaluation occurred in five priority modern awards across female‑dominated sectors such as child care, health (including First Nations workers) and social services.\n\n### Adult age, adult wage\n\nThe Fair Work Commission’s decision to phase out junior pay rates will help ensure young workers get fair and decent wages. Junior award rates of pay will be phased out for retail, fast food and pharmacy workers aged 18 to 20.\n\n### Responding to changing fuel costs\n\nThe Government has amended the _Fair Work Act 2009_ to allow the Fair Work Commission to make orders to deal with rising fuel prices. On 21 April 2026, an order came into effect to help road transport businesses and workers, by regularly adjusting the rates they are paid. This will help the many owner‑drivers and small transport operators recover costs from higher fuel prices.\n\n## Budget themes\n\n[Fuel supply and security](01-fuel-supply-and-security.htm) Cost of living [Productivity](03-productivity.htm) [Tax reform](04-tax-reform.htm) [Care and opportunity](05-care-and-opportunity.htm) [Security and investment](06-security-and-investment.htm)\n\n[Back to top](#masthead-top)","sortOrder":10},{"sectionNumber":"budget-11","sectionType":"budget_page","heading":"Productivity","content":"Source: https://budget.gov.au/content/03-productivity.htm\n\n# Productivity\n\nMaking our economy more productive\n\nPrint or save page\n\nOn this page\n\n## Delivering on our productivity agenda\n\nThis Budget advances the reform directions set by the Treasurer’s Economic Reform Roundtable, delivering a significant package of practical reforms that will meaningfully boost productivity growth. Together, they will make it easier to build, easier to do business and easier to invest and innovate.\n\n### Incentivising investment and innovation\n\nThis Budget delivers landmark tax reforms that will encourage investment and innovation, including:\n\n-   loss refundability\n-   a permanent $20,000 instant asset write‑off, and\n-   expanded tax incentives for venture capital.\n\nReforms to the Research and Development (R&D) Tax Incentive will unlock $400 million per year in additional R&D by young firms.\n\nThe annual superannuation performance test helps protect members from persistent underperformance. The Government will strengthen the test to help reduce unintended barriers to investment that supports member outcomes.\n\nA stronger Investor Council will support the Investor Front Door to prioritise investment proposals and identify opportunities for coordinated public financing; with up to $125 billion being deployed by the Government’s specialist investment vehicles.\n\n### Reducing red tape\n\nThe Government is reducing financial sector compliance costs by $780 million a year by progressing 14 legislative reforms, including increasing company reporting thresholds. Financial regulators are also taking 13 actions to streamline their data collections to reduce compliance costs.\n\nWe will regularly introduce regulatory reform bills to improve and modernise regulation, building on the 60 measures legislated in 2025.\n\n#### Removing barriers to trade\n\n-   The Government is abolishing another 497 nuisance tariffs from 1 July 2026, bringing the total abolished to around 1,000 and saving businesses $157 million a year in compliance costs.\n-   The Government will also consult on abolishing additional tariffs to further cut costs for Australian businesses.\n-   We are simplifying trade through the landmark Australia‑EU Free Trade Agreement, expanding the Australian Trusted Trader program and streamlining biosecurity border processes.\n\n#### Building a Single National Market\n\n-   The Government will work with states on reforms to payroll tax administration, in addition to further improving labour mobility through national occupational licensing.\n-   This will allow health practitioners to work to their full scope of practice, and enable a national approach to screening care workers.\n\n#### Making it easier to engage with Government\n\nThe Government is implementing a ‘tell‑us‑once’ approach and investing $654.3 million to expand the use of Digital ID to safely verify identity, reduce data storage and improve access to government services online.\n\nA further $62 million is being invested into the Consumer Data Right, including finding new ways for customers to use their own data to save money and get better services.\n\n### Accelerating approvals\n\nThe Government is:\n\n-   accelerating environmental, low‑risk foreign investment, resources and telecommunications approvals to make it easier to launch new projects\n-   delivering stronger environmental outcomes through more than $500 million to implement approval reforms that deploy AI, cut duplication with states and fund more bioregional plans and strategic assessments\n-   strengthening the Investor Front Door to help nationally significant projects.\n\n### Building more homes\n\nThe Government is funding last‑mile infrastructure to unlock up to 65,000 homes in states and territories that drive productivity in the housing sector, including by:\n\n-   speeding up approvals\n-   making more land ready for new homes, and\n-   modernising the National Construction Code.\n\nThe Government is also taking action to simplify building regulations and make it easier to build by providing free access to all standards referenced in Australian legislation. This will save small businesses and tradies up to $1,600 per year. The Government is also removing barriers to using modern methods of housing construction.\n\n### Modernising energy markets\n\nThe Government is working with states and territories to pursue the most significant reforms to our energy market since the 1990s. These upgrades will make our system more productive and competitive and for the first time allow household solar and battery systems to directly participate in the market.\n\nWe are introducing a domestic gas reservation from 1 July 2027 to ensure Australian gas stays on our shores. This requires LNG producers to reserve 20 per cent of their export volumes for Australian users to reduce pressure on prices.\n\n### Better recognising skills\n\n-   The Government is investing $85.2 million to accelerate skills assessments for migrant trades workers and to accelerate occupational licensing, making it faster for them to enter the workforce.\n-   The Government is also reforming the permanent migration points test to select better educated, higher‑skilled and younger migrants.\n-   University students with relevant TAFE qualifications will benefit from quicker degrees through a National Credit Recognition Framework.\n\n### Unlocking the data and AI opportunity\n\nThe Government is providing up to $70 million for ‘AI Accelerator’ grants to boost AI development. It is also advancing use of AI in government, including to accelerate environmental and medicine approvals and make the National Construction Code easier to use.\n\n### Investing in science and innovation\n\nThe Government is investing $1.5 billion in our research and scientific institutions including:\n\n-   CSIRO\n-   the National Measurement Institute, and\n-   the Square Kilometre Array.\n\nTo maximise value from its innovation investment, the Government is establishing the National Resilience and Science Council to coordinate and align public innovation investments.\n\nThe Government has also provisioned $508.5 million to increase disbursements for medical research from the Medical Research Future Fund.\n\n## Reducing the regulatory burden\n\nThe Government’s productivity reforms will reduce regulatory burden by $10.2 billion each year, boost long‑run GDP by around $13 billion a year, and progress 13 of the 17 reform areas identified by the Productivity Commission’s five pillar inquiries.\n\n## Budget themes\n\n[Fuel supply and security](01-fuel-supply-and-security.htm) [Cost of living](02-cost-of-living.htm) Productivity [Tax reform](04-tax-reform.htm) [Care and opportunity](05-care-and-opportunity.htm) [Security and investment](06-security-and-investment.htm)\n\n[Back to top](#masthead-top)","sortOrder":11},{"sectionNumber":"budget-12","sectionType":"budget_page","heading":"Tax reform","content":"Source: https://budget.gov.au/content/04-tax-reform.htm\n\n# Tax reform\n\nTax reform for workers, businesses and future generations\n\nPrint or save page\n\nOn this page\n\n## A better tax system for workers, first home buyers and future generations\n\nThe Government is reforming the tax system to help more Australians realise the dream of home ownership, better encourage productive investment and help fund a new $250 tax offset for workers.\n\n### Cutting taxes for working Australians\n\n-   The Government is introducing a $250 Working Australians Tax Offset from 2027-28, providing an ongoing annual tax cut for over 13 million Australian workers.\n-   This is on top of the three tax cuts the Government has already legislated and the $1,000 instant tax deduction.\n-   For an Australian worker on average earnings, the combined benefit of the Government’s five tax cuts could be up to $2,816 per year, helping every Australian worker keep more of what they earn.\n\nTax explainer - New tax cuts for Australian workers\n\n[PDF 432 kB](/content/factsheets/download/tax-explainers-new-tax-cuts-workers.pdf)\n[DOCX 253 kB](/content/factsheets/download/tax-explainers-new-tax-cuts-workers.docx)\n\n### Negative gearing\n\nThe Government will limit negative gearing to new builds from 1 July 2027, to focus tax support on new supply.\n\nExisting arrangements will remain unchanged for all properties held before Budget night, and investors who buy new builds will still be able to deduct losses from other income.\n\nInvestors who buy established housing after Budget night will still be able to deduct losses against residential property income. They will be able to carry forward unused losses to future years but won’t be able to deduct them against other income like wages.\n\nTax explainer - Negative Gearing and Capital Gains Tax Reform\n\n[PDF 432 kB](/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf)\n[DOCX 182 kB](/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.docx)\n\n### Capital gains tax\n\nThe Government will replace the 50 per cent Capital Gains Tax (CGT) discount with a discount based on inflation and introduce a minimum 30 per cent tax on gains from 1 July 2027.\n\nThis reform means that investors will only pay tax on their real capital gain, restoring the original intent of the CGT arrangements. The CGT reforms will only apply to gains arising after 1 July 2027. Investors in new builds will be able to choose the 50 per cent CGT discount or the new arrangements.\n\n### Fairer tax arrangements for discretionary trusts\n\nThe Government will introduce a minimum tax of 30 per cent on discretionary trusts from 1 July 2028 with some exceptions.\n\nRollover relief will be provided for three years from 1 July 2027 to assist small businesses and others that wish to restructure.\n\nTax explainer - Minimum tax on discretionary trusts\n\n[PDF 358 kB](/content/factsheets/download/tax-explainers-minimum-tax-discretionary-trusts.pdf)\n[DOCX 170 kB](/content/factsheets/download/tax-explainers-minimum-tax-discretionary-trusts.docx)\n\nTax explainer - Small business Capital Gains Tax and Discretionary Trusts\n\n[PDF 466 kB](/content/factsheets/download/tax-explainers-cgt-trusts-impacts.pdf)\n[DOCX 735 kB](/content/factsheets/download/tax-explainers-cgt-trusts-impacts.docx)\n\n## A better tax system for businesses\n\n### Boosting resilience and dynamism\n\nThe Government is reintroducing loss carry back to support business risk taking and resilience.\n\nFrom 2026-27, eligible companies that make a loss in the current income year will be able to use that loss to get a refund against tax paid in the prior two income years. This will benefit up to 85,000 companies, mostly small businesses.\n\nThe Government is also introducing loss refundability to support new start‑up businesses. From 2028-29, small start‑ups in their first two years of operation will be able to get a refund for tax losses, up to the value of fringe benefits tax and withholding tax paid on employee wages. This will benefit up to 25,000 young companies each year, providing valuable cash flow support.\n\nThe Government is also improving cash flow for small businesses by permanently extending the $20,000 instant asset write‑off from 1 July 2026. Small businesses with turnover up to $10 million will be able to immediately deduct eligible assets costing less than $20,000, helping them to make their investment decisions with confidence. This is estimated to improve cash flow for small businesses by around $890 million over the next five years.\n\nThese reforms form part of the Government’s strategy to improve economic resilience, support productivity and promote employment.\n\n![](/dist/img/cameos/cameo-dining-co.jpg)\n\n#### How small businesses can benefit from instant asset write‑off and loss carry back\n\nDining Co runs a local restaurant with $1 million in turnover. It generated $50,000 in taxable profits and paid $12,500 tax in 2025-26 (at the 25% tax rate).\n\nIn 2026-27, Dining Co decides to supply ready‑cooked meals to local supermarkets. It purchases new equipment for a total of $65,000, with each piece costing less than $20,000. Due to the instant asset write‑off , these items can be immediately deducted.\n\nWithout these new investments, Dining Co would have reported a $50,000 profit in 2026-27. However, with the instant asset write‑off deductions, it reports a $15,000 tax loss and pays no tax.\n\nFurther, Dining Co will now be able to carry back that tax loss to the previous year’s tax paid, generating a $3,750 tax refund ($15,000 × 25% tax rate). This provides timely cash flow to the company as it seeks to expand.\n\n### Expanding venture capital incentives\n\nFrom 1 July 2027, the Government will expand venture capital tax incentives to align with modern company valuations.\n\nChanges to the Early‑Stage Venture Capital Limited Partnership and Venture Capital Limited Partnership programs will support start‑ups and high‑growth businesses to unlock greater access to capital and industry knowledge.\n\n### Better targeting the Research and Development Tax Incentive\n\nThe Government will better incentivise core R&D that benefits the broader economy, in response to recommendations of the Ambitious Australia Report. From 1 July 2028, the Government is:\n\n-   Increasing the offset for experimental core R&D by around 25 to 50 per cent and removing eligibility for expenditure that only supports R&D. The intensity threshold will reduce to 1.5 per cent, providing higher offsets to firms undertaking substantial core R&D.\n-   Providing greater support to young, fast‑growing firms by increasing the turnover threshold for the higher, refundable offset to $50 million. Refundability will be limited to firms operating less than ten years, with older firms eligible for an equivalent, non‑refundable offset.\n-   Increasing the maximum expenditure cap to $200 million, encouraging more R&D onshore.\n-   Improving assurance by increasing the minimum expenditure threshold to $50,000. R&D below this must be undertaken with a Research Service Provider or Cooperative Research Centre.\n\n## A simpler and more sustainable tax system\n\nThe Government is making Australia’s tax system simpler and more sustainable by making tax easier to manage for businesses and individuals.\n\n### Making tax easier for workers and small businesses\n\nFrom 2026-27, a new instant tax deduction of up to $1,000 will simplify work‑related expense deductions. This will deliver 6.2 million workers an average tax benefit of $205 for 2026-27 and reduce compliance costs by around $380 million a year.\n\nThe $20,000 instant asset write‑off for small business will be made permanent, simplifying tax obligations, improving cash flow and saving small businesses around $32 million per year in compliance costs.\n\nThe Government is also boosting business cash flow by making it easier for businesses to change their pay as you go (PAYG) instalments when business conditions change, by:\n\n-   providing businesses with flexibility to opt in to monthly PAYG instalments from 1 July 2027, and\n-   expanding access to the ATO’s dynamic instalments pilot using business software to more accurately calculate PAYG instalments.\n\nThe Government will work with states on reforms to payroll tax administration.\n\n### More sustainable settings to support take‑up of electric cars\n\nThe Government will transition the arrangements to support electric cars to a permanent 25 per cent fringe benefits tax (FBT) discount, for eligible electric cars over $75,000 from 1 April 2027 and for all eligible electric cars from 1 April 2029.\n\nElectric cars costing up to $75,000 will continue to receive a full FBT exemption provided the fringe benefit arrangement commences before 1 April 2029.\n\n## Budget themes\n\n[Fuel supply and security](01-fuel-supply-and-security.htm) [Cost of living](02-cost-of-living.htm) [Productivity](03-productivity.htm) Tax reform [Care and opportunity](05-care-and-opportunity.htm) [Security and investment](06-security-and-investment.htm)\n\n[Back to top](#masthead-top)","sortOrder":12},{"sectionNumber":"budget-13","sectionType":"budget_page","heading":"Care and opportunity","content":"Source: https://budget.gov.au/content/05-care-and-opportunity.htm\n\n# Care and opportunity\n\nStrengthening care and broadening opportunity\n\nPrint or save page\n\nOn this page\n\n## Securing the NDIS for future generations\n\n### Returning the NDIS to its original intent\n\nThe NDIS was established to support people with permanent and significant disability. The reforms in this Budget will protect that original intent for current and future participants. The Government will implement reforms across four pillars to secure the future of the NDIS.\n\n1.  To ensure quality services and supports that meet the needs of participants, the Government will commission plan management and support coordination, and consult on a commissioning approach for home and living supports for Supported Independent Living participants so they receive the best supports and address provider viability challenges.\n2.  To set clearer eligibility requirements, the Government will put standardised, evidence‑based assessments of functional capacity at the core of determining access to the NDIS.\n3.  To slow cost increases, the Government will tighten criteria around plan reassessments and strengthen guidance about what are reasonable and necessary supports. Budgets for social, civic and community participation and capacity building daily activities will be reset, and New Framework Planning will deliver more equitable, consistent and sustainable participant plans from April 2027.\n4.  To fight fraud and stop rorts, the Government will increase oversight of providers and payments, strengthen the National Disability Insurance Agency’s investigative and enforcement capabilities, and introduce new regulatory controls to protect participants and the NDIS from exploitation.\n\nThe Government is also providing $2 billion to establish the Thriving Kids program as part of the $5 billion Foundational Supports commitment to be matched by the states.\n\nThese reforms are expected to save a total of $37.8 billion over the next four years. The NDIS will continue to grow each year and remain Australia’s largest social program outside of the Age Pension.\n\n## Better care for older Australians\n\nThis Government is investing $3.7 billion to deliver more beds, more packages and better care for older Australians to ensure they get the support they deserve.\n\n### More aged care beds and Support at Home packages\n\nThe Government is investing $1.7 billion to incentivise construction of up to 5,000 aged care beds a year and protect equity of access for those less well off.\n\nThis investment includes $606.5 million to:\n\n-   introduce new capital subsidies for aged care providers who build or expand residential accommodation\n-   deliver up to 20 additional Specialist Dementia Care units, and\n-   expand the Hospital to Aged Care Dementia Support program from 11 to 20 locations nationally.\n\nThe Government is also provisioning $1.1 billion for future spending to increase and restructure the Accommodation Supplement and introduce an additional payment for homes with more than 60 per cent low‑means residents.\n\nAn additional $565.1 million will improve sector quality, safety and viability. This builds on the Government’s first‑term measures to improve the quality of residential aged care, including by increasing minutes of care delivered to older Australians and strengthening regulatory oversight.\n\nThe Government is providing $389.8 million to accelerate the release of Support at Home packages and make the program fairer and more affordable.\n\n### Quality, affordable personal care for older Australians\n\nThe Government is committing $1 billion to fully subsidise and remove co‑contributions for personal care services such as showering through the Support at Home program. These changes build on the Government’s landmark aged care reforms that have codified the rights of older Australians in law and established a system to deliver safe, dignified and high‑quality care for an ageing population.\n\n## Strengthening Medicare\n\n### Record funding for public hospitals\n\nThe Government is delivering $25 billion in additional funding for public hospitals, to reach a record $220.3 billion over five years. The renewed National Health Reform Agreement will ensure Australians receive safe and high‑quality care. Reforms will also better meet the needs of First Nations people with a dedicated funding schedule.\n\n### Investing in Medicare Urgent Care Clinics\n\nThis Budget provides $1.8 billion to secure the future of Medicare Urgent Care Clinics as permanent features of Australia’s health system. This builds on previous investments to expand the total network to 137 clinics across Australia.\n\nThe network has delivered almost three million free visits nationwide. By July 2026, four in five Australians will live within a 20‑minute drive of their local Medicare Urgent Care Clinic.\n\n### More bulk billing\n\nThe Government has invested $11.4 billion to incentivise bulk billing, with a goal of ensuring nine out of ten GP services are bulk billed by 2030.\n\nSince the Government’s recent bulk billing reforms commenced on 1 November 2025, 1,420 general practices across Australia that were previously mixed billing have become fully bulk billing. The national GP bulk billing rate has also risen to 81.4 per cent in the period between November 2025 and January 2026.\n\nThis Budget also provides an additional $25.3 million in targeted funding to lift bulk billing rates in the Central Coast, Newcastle, Lake Macquarie and Hunter regions.\n\n## Broadening opportunity and increasing equality\n\n### Investing in First Nations communities and Closing the Gap\n\nThe Government continues to work with First Nations communities to deliver Closing the Gap commitments. This Budget invests $1.2 billion, building on work already underway, including a 10-year, $4 billion joint investment to halve overcrowding in remote Northern Territory communities, and targeted investment in Indigenous Rangers programs, education, justice reinvestment, health, water and digital connectivity.\n\n#### Jobs and economic empowerment\n\nThe Government is investing $299 million to double the successful Remote Jobs and Economic Development Program from 3,000 to 6,000 new jobs - delivering the dignity of work with decent pay and conditions in First Nations communities.\n\n#### Easing the cost‑of‑living for remote communities\n\nThe Government has invested an additional $27.4 million to expand the Low‑Cost Essentials Subsidy Scheme to all 225 remote stores around Australia, reducing prices for 30 essential grocery items. The Store Efficiency and Resilience Package is also being expanded to 75 more remote stores, with $32.7 million to increase supplies of groceries and essentials in preparation for seasonal weather events.\n\n#### Investing in culturally‑safe healthcare\n\nThe Government is continuing to invest in improving health infrastructure across Aboriginal Community‑Controlled Health Services with $144.1 million to expand on the more than 100 projects already delivered or underway.\n\nThe Government is also supporting Birthing on Country with $44.4 million for culturally‑safe maternal care for 1,100 mothers, and providing $18.9 million to expand access to culturally‑safe crisis care through 13YARN.\n\nThe Government’s investment in public hospitals also includes almost $250 million in dedicated funding for new, co‑designed programs to improve First Nations health outcomes, with $200 million matched by states and territories.\n\n#### Improving education outcomes\n\nThe Government is investing $113 million to improve education outcomes, including extending the Clontarf Foundation’s young men’s program and the Indigenous Boarding Provider grants program.\n\n### Continuing to support veterans and their families\n\nThis Budget provides a further $583.4 million to implement recommendations from the Royal Commission into Defence and Veteran Suicide, and $169.7 million for allied health services for veterans.\n\n### Supporting women and advancing gender equality\n\nThe Government is improving the lives of Australian women by putting gender equality at the centre of decision making. The gender pay gap is at an historic low and women’s workforce participation reached record highs in 2025.\n\n#### A safer and more effective Child Support Scheme\n\nThe Government is investing $182.6 million to make the Child Support Scheme safer so children get the financial support they need and women are protected from conflict and abuse.\n\n#### Supporting families and children\n\nThe 3 Day Guarantee entitles eligible families to three days of subsidised child care per week. From July, government‑funded Paid Parental Leave will increase to a full six months. This Budget also provides $171.7 million for front line community services including through a new, simplified Children and Families Support program.\n\n#### Better healthcare for women\n\nThis Budget will expand access to Keytruda®, a cervical cancer treatment, and support more long‑acting reversible contraceptives, while continuing the work to achieve universal perinatal mental health screening.\n\n#### Addressing violence against women, children and families\n\nSince 2022, the Government has invested over $4.4 billion to deliver the _National Plan to End Violence against Women and Children_.\n\nThe Government is also investing $218.3 million to support delivery of Our Ways - Strong Ways - Our Voices, Australia’s first standalone plan to end violence against Aboriginal and Torres Strait Islander women and children.\n\n## Budget themes\n\n[Fuel supply and security](01-fuel-supply-and-security.htm) [Cost of living](02-cost-of-living.htm) [Productivity](03-productivity.htm) [Tax reform](04-tax-reform.htm) Care and opportunity [Security and investment](06-security-and-investment.htm)\n\n[Back to top](#masthead-top)","sortOrder":13},{"sectionNumber":"budget-14","sectionType":"budget_page","heading":"Security and investment","content":"Source: https://budget.gov.au/content/06-security-and-investment.htm\n\n# Security and investment\n\nBuilding a resilient and secure Australia\n\nPrint or save page\n\nOn this page\n\n## Future Made in Australia\n\n### Supporting resilient metals production\n\nThe Government is capitalising on economic opportunities available through the net zero transition and working to ensure the continued success of our metals‑smelting capabilities into the future. This includes investing up to $1 billion in the Boyne Island Aluminium Smelter to secure its long‑term, lower emissions and renewables powered operations, with funding matched by the Queensland Government and unlocking almost $7.5 billion in private investment.\n\nThe Government is partnering with state governments to support critical facilities that contribute to Australia’s economic prosperity. This includes $222.6 million in further funding to support the administration and ongoing operations of the Whyalla Steelworks, as well as support for employees of the Liberty Bell Bay manganese smelter, while work progresses to find new owners for both facilities.\n\n### Securing critical minerals supply chains\n\nGrowing Australia’s critical minerals industry will help create diverse, resilient and sustainable global supply chains. The Government has delivered on its commitment to establish a Critical Minerals Strategic Reserve. Future transactions under the Reserve will be led out of the Department of Industry, Science and Resources, in close partnership with Export Finance Australia. The Reserve will initially focus on antimony, gallium and rare earth elements which are crucial for clean energy and high‑technology manufacturing, as well as advanced military equipment.\n\nThe Reserve will draw on $1 billion from the previously expanded $5 billion Critical Minerals Facility for transactions. The Government is also providing $150 million for selective stockpiling of minerals and $20.4 million to support the operation of the Reserve. To complement these efforts and ensure Australia can be a reliable supplier of critical minerals, the Government is providing $2.9 million to support delivery of Australia’s international critical minerals commitments.\n\n## A record funding boost for defence\n\n### Bolstering Australia’s defence capability\n\nThe Government is delivering the defence capabilities Australia needs to ensure a secure and prosperous future. The 2026 National Defence Strategy provides an additional $53 billion over the next ten years through direct government investment and plans to leverage private sector funding. These investments will:\n\n-   increase the ADF’s ability to deter and respond to threats\n-   build a more self‑reliant ADF for the future\n-   strengthen Australia’s sovereign defence industrial base\n-   increase coordination with our regional partners.\n\nThe 2026 Integrated Investment Program supports the National Defence Strategy by providing new and increased investment over the decade in high priority Defence capabilities, including:\n\n-   up to $130 billion on enhanced undersea warfare capabilities, supported by a fleet of conventionally‑armed, nuclear‑powered submarines\n-   up to $15 billion on autonomous and uncrewed systems, such as the Australian designed and built Ghost Bat and smaller, low‑cost drones for deployment in large numbers\n-   up to $77 billion to deliver the enhanced surface combatant fleet and fleet support, including upgraded Japanese Mogami class frigates and Hunter class anti‑submarine frigates\n-   an initial $12 billion to establish the Henderson Defence Precinct as a world class centre of excellence for naval shipbuilding and sustainment in Western Australia.\n\n## Building infrastructure for the future\n\n### Sustainable investment in transport infrastructure\n\nThe Government is maintaining a rolling infrastructure pipeline of more than $120 billion over ten years, with short‑term profile adjustments in response to the effects of the Middle East conflict and potential constraints on capacity. This Budget includes over $8.6 billion for new and ongoing nationally significant projects.\n\nWorking in partnership with every state and territory, the Government’s infrastructure pipeline will deliver the road and rail projects needed across our cities and communities. This includes:\n\n-   $812.5 million in this Budget for the Bruce Highway upgrade between the Gateway Motorway and Dohles Rocks Road in Queensland\n-   $45 million for safety improvements to the M1 in New South Wales\n-   $500 million over ten years to continue the Active Transport Fund\n-   $50 million to upgrade the Sydney to Canberra rail corridor.\n\nIt also includes $3.8 billion for Victoria’s Suburban Rail Loop East, bringing the Government’s total commitment to $6.0 billion. This landmark project will enable more transport and homes in the right places - cutting travel times, reducing congestion and reshaping how Melbourne grows.\n\nIn addition, the Government is making targeted freight and supply chain investments that will support the efficient movement of goods around the country. This includes $1.75 billion in equity for the Australian Rail Track Corporation to upgrade Australia’s rail freight network.\n\n### Investing in communities\n\nThe Government is providing a further $841.7 million in community infrastructure, including through the Thriving Suburbs, Growing Regions and Stronger Communities programs. This will fund projects such as libraries, parks, community centres and sport and cultural facilities that enhance liveability, bolster social cohesion and enrich quality of life at a local level.\n\n### Support for disasters\n\nThe Government continues to support communities impacted by disasters. Funding for natural disaster relief is expected to increase by $2.5 billion.\n\n## Responding to the Bondi attack\n\n### Supporting victims and impacted communities\n\nTogether with the NSW Government, we have committed $21.7 million in Disaster Recovery Funding Arrangements to support the Bondi community. Support includes:\n\n-   $2 million for Jewish community organisations\n-   $1 million for legal services\n-   up to $25,000 for local small businesses, and\n-   $2.8 million for up to eight coordinators to support the local community and provide capacity building.\n\nThe Government has invested $42.9 million in mental health supports for the Jewish community and the broader Bondi community, including an interim Medicare Mental Health Centre in Bondi, which is providing free, walk‑in mental health support.\n\n### Countering hate speech, terrorism and violent extremism\n\nThe Government is addressing hate speech, violent extremism and terrorism, committing $604.2 million to initiatives in response to the antisemitic Bondi terrorist attack. This includes:\n\n-   $36.1 million for stronger hate crime and firearms laws\n-   continued work to progress the National Gun Buyback Scheme through National Cabinet, and\n-   more funding to disrupt politically and ideologically motivated violence and hate crimes.\n\n### Support for Jewish Australians\n\nThe Government accepted all recommendations relevant to the Commonwealth from the Interim Report of the Royal Commission on Antisemitism and Social Cohesion and has committed to working with states and territories on a nationally consistent approach to implementing all 14 recommendations.\n\nThe Government adopted the Special Envoy to Combat Antisemitism’s Plan to Combat Antisemitism and is implementing the 13 recommendations in consultation with the Jewish Australian community and the Special Envoy.\n\nThe Government is also providing $46.7 million in financial support to the wider Jewish community, including for security and infrastructure upgrades and grant opportunities to support priority projects, including for a Chabad of Bondi project.\n\n## Budget themes\n\n[Fuel supply and security](01-fuel-supply-and-security.htm) [Cost of living](02-cost-of-living.htm) [Productivity](03-productivity.htm) [Tax reform](04-tax-reform.htm) [Care and opportunity](05-care-and-opportunity.htm) Security and investment\n\n[Back to top](#masthead-top)","sortOrder":14},{"sectionNumber":"budget-15","sectionType":"budget_page","heading":"Tax explainer - Negative Gearing and Capital Gains Tax Reform","content":"Source: https://budget.gov.au/content/factsheets/download/tax-explainers-negative-gearing-capital-gains-tax.pdf\n\n| Negative Gearing and Capital Gains Tax Reform 1\nNegative Gearing and Capital Gains Tax Reform\nThe Government is helping more Australians get into the housing market and\nimproving the efficiency and fairness of the tax system.\nSupporting home ownership\nwith a fairer and more efficient\ntax system\nThe Government is reforming negative gearing\nand capital gains tax (CGT) arrangements.\nThese reforms will limit the benefits of negative\ngearing to new residential properties, re-introduce\ncapital gains tax cost base indexation, and\nintroduce a 30 per cent minimum tax on\ncapital gains.\nSince 1999, housing prices have risen more than\ntwice as fast as average full time earnings and,\nsince 2001 to 2021, the home ownership rate for\nhouseholds 25 to 34 years old has declined by\nseven percentage points.\nThese changes will help level the playing field for\nfirst home buyers, preserve the gains investors\nhave made, and support investment in new\nhousing supply.\nFrom 1 July 2027, the Government will:\n• limit negative gearing for residential property\ninvestments to new builds; and\n• replace the 50 per cent CGT discount for\nindividuals, trusts and partnerships with cost\nbase indexation and a 30 per cent minimum tax\nrate on capital gains.\nThese changes will rebalance our tax system,\nallowing the Government to take pressure off\nwage earners and first home buyers.\nThe impact of these changes on existing\ninvestments will be limited. Properties held before\nannouncement (7:30pm AEST 12 May 2026) will\nbe exempt from the negative gearing changes. The\nCGT reforms will only apply to gains accruing after\n1 July 2027.\nRental losses can only reduce income\nfrom residential properties\nUnder current tax settings, losses from a rental\nproperty can be used to reduce other forms of\ntaxable income (e.g. salary and wages). This\nencourages leveraged property investments that\ncan lead to investors receiving greater tax\nadvantages than those available to owner\noccupiers.\nFrom 1 July 2027, losses related to existing\nresidential investment properties purchased from\n7:30pm AEST 12 May 2026 will only be deductible\nagainst other income from residential properties,\nincluding capital gains.\nHowever, when an investor has excess losses, they\nwill be able to carry forward that excess to offset\nresidential property income in future years.\nEnabling losses to be carried forward ensures\ninvestors remain able to claim a deduction in the\nfuture for costs such as maintenance.\nThese changes will apply to individuals,\npartnerships, companies and most trusts. Widely\nheld trusts (for example, most managed\ninvestment trusts) and superannuation funds\n(including SMSFs) will be excluded.\n\n| Negative Gearing and Capital Gains Tax Reform 2\nCost base indexation\nThe current 50 per cent CGT discount was\nintroduced in 1999, allowing taxpayers to\nreduce their taxable capital gain by half rather\nthan adjusting for inflation. As a result, the\n50 per cent discount does not accurately\napproximate the inflation component of gains,\nmeaning investors are undercompensated or\novercompensated depending on their returns.\nReturning to indexation based on the\nConsumer Price Index (CPI) aligns with the\noriginal intent of the CGT regime and supports\nproductivity over time by ensuring that\ninvestment decisions are taken for economic\nreasons, not due to tax outcomes.\nIndexation will be calculated using CPI in a\nsimilar manner to arrangements previously in\nplace between 1985 and 1999. The ATO will\nprovide guidance and tools to support\ncalculation of this adjustment.\nThese changes will apply to all CGT assets\n(including property and shares) held by individuals,\npartnerships and trusts for at least 12 months.\nApplying these changes broadly across assets\nensures the CGT settings are broadly asset neutral\nwith only targeted exemptions.\nMinimum tax on capital gains\nA minimum tax rate of 30 per cent will apply\nto real capital gains accruing from 1 July 2027\n(with no impact until the income is realised).\nThis will not affect people whose capital gains\nare already taxed at rates of at least 30 per cent.\nThe introduction of the minimum tax reduces\nthe benefit of taxpayers deferring capital gains\nrealisation to years where their marginal tax rates\nare low. It ensures their gains are subject to a tax\nrate closer to the rate they faced during their\nworking life and is commensurate with the tax\nrate paid by most workers.\nRecipients of means-tested income support\npayments, such as the Age Pension or JobSeeker,\nwill be exempted from the minimum tax if they\nreceive any payment in the financial year in which\nthey realise the capital gain.\nComparison of Returns, Inflation and Effective Rates\nUnder these new arrangements, the effective tax rate on nominal capital gains would vary\ndepending on an individual’s marginal rate, their returns and the inflation rate over the period\nthe asset had been held.\nAs shown below, if indexation had been in place over the past 20 years instead of the current\narrangements, the effective discount would have ranged from 35-60 per cent on average for\ntypical assets held for five or ten years.\nThis equates to an effective tax rate on the nominal gain of between 13 per cent and 30 per cent.\nTable 1: Comparison of tax rates under indexation on average over past 20 years\nHouse\nAverage capital growth(a) Discount for CPI(b) At 32c rate(c) At 47c rate(d)\n5y hold 5.8% 42% 18.6 27.3\n10y hold 6.1% 36% 20.5 30.1\ncontinued on next page\n\n| Negative Gearing and Capital Gains Tax Reform 3\nTable 1: Comparison of tax rates under indexation on average over past 20 years\n(continued)\nUnit\nAverage capital growth(a) Discount for CPI(b) At 32c rate(c) At 47c rate(d)\n5y hold 4.1% 59% 13.1 19.3\n10y hold 4.8% 50% 16.0 23.5\nShares (S&P/ASX 200)\nAverage capital growth(a) Discount for CPI(b) At 32c rate(c) At 47c rate(d)\n5y hold 4.4% 53% 15.0 22.1\n10y hold 4.3% 56% 14.1 20.7\na) Average annual return on an asset held for five or ten years and sold over the period, not including rental or dividend income\nor additional investor costs\nb) Average inflation share of nominal gain over holding period\nc) Effective tax rate on nominal gain at 32 cent marginal tax rate after indexation\nd) Effective tax rate on nominal gain at 47 cent marginal tax rate after indexation\nSource: Cotality Data, ASX and Treasury analysis; Budget Paper No. 1, Statement 4: Tax reform for workers, businesses\nand future generations.\nTransitional arrangements\nTransitional arrangements for\nnegative gearing\nNew builds can continue to be negatively geared\nbefore and after 1 July 2027.\nFor established residential properties:\n• Properties held at announcement (including\nwhere a contract has been entered into, but\nnot yet settled) will be allowed to be negatively\ngeared in future years until sold. This ensures\nthat arrangements for taxpayers who have\nalready made investment decisions based on\nthe existing negative gearing rules will not\nchange.\n• Properties purchased between announcement\nand 30 June 2027 may be negatively geared\nduring this period, but not from 1 July 2027.\n• Properties purchased from 1 July 2027 will not\nbe able to be negatively geared.\nTransitional arrangements for capital gains tax\nFor eligible CGT assets other than new residential\nproperties:\n• There will be no changes in arrangements for\nassets purchased and sold prior to 1 July 2027.\n• Assets purchased after 1 July 2027 will be\ntreated wholly under the new arrangements.\n• Assets owned prior to 1 July 2027 and sold\nafter 1 July 2027 will be treated under current\narrangements on gains made prior to this date,\nand under the new arrangements for gains\nmade after this date (with no impact until gains\nare realised).\nThe 50 per cent CGT discount will apply to the\ndifference between the asset’s cost base and its\nvalue at 1 July 2027. Indexation and the minimum\ntax will be used to calculate the CGT on gains\naccruing from 1 July 2027 (using the asset’s value\nat 1 July 2027 as the asset’s cost base).\n\n| Negative Gearing and Capital Gains Tax Reform 4\nAn asset’s value at 1 July 2027 will be determined\nby taxpayers as part of their tax return in the year\nthe asset is realised. Taxpayers can either:\n• seek a valuation of the asset as at 1 July 2027,\nwhich will include using quoted prices for\nassets such as shares; or\n• use a specified apportionment formula that\nestimates the asset’s value on 1 July 2027,\nbased on its growth rate over the asset’s\nholding period. The ATO will provide tools to\nestimate this value for taxpayers.\nThese transitional arrangements also apply to\nlegacy assets, including those purchased before\n1985. Gains on pre-1985 assets accrued before\n1 July 2027 will continue to be exempt.\nNew build exemption\nInvestors who buy new builds will be able to\nchoose either the 50 per cent CGT discount or\nindexation and the minimum tax when they sell\nthe property.\nThese investors will also continue to have access\nto negative gearing. This means if they make a\nrental loss on a new build, they can still use that\nloss to reduce their taxable income (including\nsalary and wages).\nNew builds are residential properties which\ngenuinely add to supply (see Table 2). This will\ninclude:\n• dwellings constructed on vacant land, or\n• where existing properties are demolished and\nreplaced with a greater number of dwellings.\nKnock-down rebuilds or substantial renovations\nthat do not increase supply will not be eligible.\nA new build cannot have been previously sold,\nunless first owned by the builder and not occupied\nfor more than 12 months.\nSubsequent purchasers of the dwelling will not be\nable to access the 50 per cent CGT discount or\nnegative gearing in relation to that property. This\nis similar to how stamp duty exemptions apply to\nnew builds under some state-based arrangements.\nOther exemptions\nThe main residence will continue to be exempt\nfor CGT purposes. The four small business CGT\nconcessions will also be unchanged.\nThe existing 60 per cent CGT discount applying to\nqualifying affordable housing will be fully retained\nto preserve incentives to invest in those assets.\nGiven the unique characteristics of the tech and\nstart up sector the Government will consult on\nthe interaction of the capital gains tax reforms\nand incentives for investment in early-stage and\nstart-up businesses.\nChanges to negative gearing will only apply to\nresidential property. Commercial property and\nother asset classes, such as shares, will remain\nsubject to existing arrangements.\nFurther exemptions to the negative gearing\nchanges will also be available for private\ninvestors who support government housing\nprograms, for example, through the provision\nof affordable housing.\nPolicy impacts\nChanges to negative gearing\narrangements\nEvery existing property owner will be able to\ncontinue to negatively gear any properties held\nbefore the time of announcement (7:30PM AEST\non 12 May 2026).\nAll future investors will still be able to negatively\ngear property investments if they are new builds.\nAround 1 per cent of taxfilers acquire negatively\ngeared properties each year. In 2022-23, this was\naround 230,000 individuals.\n\n| Negative Gearing and Capital Gains Tax Reform 5\nChanges to capital gains tax\narrangements\nThe new arrangements will only apply to capital\ngains that accrue after 1 July 2027 when they are\nrealised. Individuals may pay more or less tax than\nunder current settings depending on investment\nreturns (see Cameos: Different rates of return).\nAround 7 per cent of taxfilers report a net capital\ngain each year. In 2022-23, this was around\n1.1 million individuals. Most of these taxfilers used\nthe CGT discount (which is only available for assets\nheld for more than 12 months).\nMarket impacts\nThe transitional arrangements minimise risks of\nasset market disruption. Properties held at\nannouncement (including where a contract has\nbeen entered into, but not yet settled) will be\nallowed to be negatively geared in future years,\nmeaning there will be no incentive to buy or sell\nproperties before specific dates.\nOnly capital gains accrued after the\ncommencement of the policy will be subject to\nnew arrangements, meaning there is no incentive\nto buy or sell assets before this date.\nHousing impacts\nThese changes will support more first home\nbuyers to enter the housing market over time, and\nform part of a package of reforms that will support\nsupply overall.\nTreasury modelling suggests that the reforms will\nincrease the owner occupier share of the housing\nmarket, resulting in around 75,000 additional\nowner-occupiers over the next decade. This is\nequivalent to reversing around 10 years of\ndeclines in the home ownership rate.\nThe reduction in investor demand is expected to\nlead to a small and temporary slowing in house\nprice growth, estimated to see prices grow by\naround 2 per cent less over a couple years relative\nto no tax policy change. Lower house price growth\nwill have a small impact on housing supply, more\nthan offset by the additional homes supported by\nhousing supply measures in the Budget.\nThe reforms are likely to have a small impact on\nrents, with an expected increase of less than\n$2 per week for a household paying the current\nmedian rent. The combination of the\nGovernment’s policies in this Budget will add to\nhousing supply, which will exert downward\npressure on rents over time. The Government’s\nincreases to Commonwealth Rent Assistance in\n2023 and 2024 total more than $20 per week for a\nsingle person receiving the maximum rate, and\nrenters can also benefit from the Government’s\ntax cuts.\nInternational comparisons\nIn its most recent country report on Australia, the\nOECD recommended cutting or eliminating the\ncapital gains tax discount and phasing out negative\ngearing to improve Australia’s tax system.\nCountries tax capital gains and treat rental\ndeductions in a range of different ways, so direct\ncomparisons depend on specific circumstances. In\nparticular, headline tax rates applying to nominal\nand real gains are not directly comparable.\nThe effective tax rate on nominal gains in Australia\nunder the new indexation arrangements will\ndepend on the nominal return, inflation and\nmarginal tax rate. As highlighted above, over the\npast 20 years nominal tax rates on average returns\ncould have been in the order of 20 to 30 per cent\nfor someone on the top marginal tax rate, though\nin some cases the effective rate could be higher\nwhere real returns are large.\nWhile there are difficulties in comparing tax\narrangements across jurisdictions, similar rates\napply across many OECD countries.\n\n| Negative Gearing and Capital Gains Tax Reform 6\nTable 2: New builds comparison table\nThe changes target the benefit of negative gearing to newly constructed properties that genuinely add\nto housing supply.\nEligible new build Not an eligible new build\nA newly constructed apartment bought off-the-plan. An established property that has recently been extended to\nadd additional bedrooms.\nA duplex constructed through a knock-down rebuild\nreplacing a single, free-standing house.\nA free-standing house constructed through a knock-down\nrebuild replacing an older, smaller free-standing house.\nAny residential construction on previously vacant land. A granny flat built adjacent to an established property that\nis not eligible for negative gearing.\nA newly built property which is occupied for less than\n12 months before being first sold.\nA newly built property which is occupied for more than\n12 months before being sold to a subsequent investor.\n1 This is roughly the average negative gearing loss in 2022-23 for an individual in the top tax bracket ($14,390) and is\nequivalent to the loss with a 3.1 per cent rental yield and 5.7 per cent interest rate on a $1 million property.\nCameos\nImpacts on existing property investors\nMichael owns an investment property purchased before 12 May 2026 that is negatively geared.\nHe can continue to negatively gear this property in future years by using losses from his investment\nproperty against other income.\nMichael sells the property two years after the policy commences for $560,000. Michael still receives\nthe 50 per cent CGT discount for the capital gain he makes on the property between the purchase\ndate and 1 July 2027. He uses ATO tools to determine its value on that date was $500,000. After\nadjusting for two years of inflation of 2.5 per cent, his taxable capital gain for the period after\n1 July 2027 is $34,688, slightly more than if he had applied a 50 per cent discount (which would have\nresulted in a taxable capital gain of $30,000). Assuming a 47 per cent tax rate, the tax on his gain since\n1 July 2027 is $16,303 (instead of $14,100 with a 50 per cent discount). Michael does not pay any tax\non the capital gain until he sells his property.\nCarrying forward losses for future property investors\nA person buying a new build property can continue to negatively gear as per current arrangements.\nFor an individual purchasing an existing property after the announcement, the impact depends on\nthe size of their rental loss and how much other income they have. For example, assuming a rental\nloss of $14,810: 1\n• For a person with $80,000 in other income this deduction would be worth $4,761.\n• For a person with $210,000 in other income this deduction would be worth $6,961.\nThis person will instead carry forward their $14,810 loss to use against future property income.\nThe tax value of this future deduction will also depend on their other income at the time.\ncontinued on next page\n\n| Negative Gearing and Capital Gains Tax Reform 7\nCameos (continued)\nNegative gearing an existing residential property bought after announcement\nYoonseo earns an income of $100,000 and buys an existing residential investment property for\n$519,000 (including stamp duty) after the policy start date, rents it out and sells it ten years later\nfor $814,447. Over the first five years that she owns the property she has net rental losses and\naccumulates $22,879 of carry forward losses.\nIn the following five years, Yoonseo applies most of these carried forward losses to reduce her positive\nnet rent over this period from $18,079 to zero. In the year she sells the property she uses the remaining\ncarried forward losses to reduce her real estate capital gain from $150,083 to $145,284. Overall, she\npays $186 more in nominal tax over the years of her investment compared to previous settings.\nHad Yoonseo bought a new build property, she would not pay additional tax as negative gearing\nand the existing capital gains tax discount would still be available for this property.\nCost base indexation\nZoe purchases shares in a company for $100 on 1 July 2027. She then sells her shares on 1 July 2032\nfor $125, having made a nominal gain of from this investment of $25, with an investment return of\n4.6 per cent per year.\nAs the shares were purchased after 1 July 2027, Zoe’s capital gains are subject to cost base indexation.\nInflation is 2.5 per cent each year Zoe holds the assets and, using ATO tools, Zoe can work out that the\nindexed cost base of the shares is $113. Zoe's taxable capital gain is reduced from $25 to $12 under\ncost base indexation. This is slightly less than the taxable capital gain of about $13 under the 50 per\ncent discount, meaning she will pay slightly less tax.\nTransitional CGT arrangements\nJane purchases an asset on 1 July 2022 for $800,000. She sells the asset on 1 July 2032 for\n$1,600,000 earning a 7.2 per cent annual return. Using ATO tools, Jane determines that the asset\nwas worth $1,131,371 at commencement of the policy (1 July 2027).\nUnder the transitional rules, Jane calculates her taxable capital gain by adding:\n• Taxable capital gains of $165,685 earned before commencement, which is equal to gross capital\ngains of $331,371 with the 50 per cent CGT discount; plus\n• Taxable gains of $319,958 earned after commencement, which is equal to the gain of $468,629 less\ncost base indexation.\nHer total taxable capital gain is $485,643. This is more than the $400,000 that would have been\ncalculated if a 50 per cent discount applied to the gain overall. Assuming a 47 per cent tax rate, the\ntax on her gain is $228,252 (compared to $188,000 with a 50 per cent discount).\ncontinued on next page\n\n| Negative Gearing and Capital Gains Tax Reform 8\nCameos (continued)\nDifferent rates of return\nPeople will be affected differently depending on the rate of return on their assets. For example,\nassuming 2.5 per cent inflation, an asset purchased for $500,000 in July 2027, a holding period of\n10 years, and $100,000 in other income per year:\n• David earns an annual rate of return of 5 per cent, similar to longer term returns on residential\nreal estate. He will have a taxable capital gain of $174,405 under cost base indexation compared\nto $157,224 under the current 50 per cent discount. He will pay an extra $8,075 in tax due to\nthe reforms.\n• Ben earns a lower 2.5 per cent annual return. As Ben does not earn a positive return on his\ninvestment after inflation, he will not have a taxable capital gain under cost base indexation.\nUnder the 50 per cent discount his taxable capital gain would have been $70,021. He will pay\n$24,858 less in tax due to the reforms.\n• Kate earns a higher 7.5 per cent annual return. She will have a taxable capital gain of $390,474\nunder cost base indexation compared to $265,258 under the current 50 per cent discount. She\nwill pay an extra $58,851 in tax due to the reforms.\nMinimum tax on capital gains\nJack has a taxable income before capital gains of $25,000 in 2029-30 and realises a capital gain of\n$10,000 on an asset that he purchased in 2027-28. Jack does not receive an income support payment\nso is not exempt from the minimum tax.\n• The tax on Jack's capital gain of $10,000 is $1,400, or a tax rate of 14 per cent (excluding the\nMedicare levy). As this is lower than 30 per cent, Jack pays an additional $1,600 in tax to bring\nthe tax rate on his capital gain up to 30 per cent. Jack may have tax offsets available to reduce the\nminimum tax and would be exempt from the minimum tax if he received an income support\npayment in that year.","sortOrder":15},{"sectionNumber":"budget-16","sectionType":"budget_page","heading":"Tax explainer - New tax cuts for Australian workers","content":"Source: https://budget.gov.au/content/factsheets/download/tax-explainers-new-tax-cuts-workers.pdf\n\n| New tax cuts for Australian workers 1\nNew tax cuts for Australian workers\nThe Government is delivering new tax cuts for every working\nAustralian taxpayer from the 2027-28 income year.\nWorking Australians Tax Offset\nThe Government will deliver new tax cuts for every\nworking Australian taxpayer by introducing a\n$250 Working Australians Tax Offset (WATO).\nOver 13 million Australian workers will benefit\nfrom the WATO for income earned from\n1 July 2027. This is on top of the first round of tax\ncuts that were rolled out in 2024 and two further\ntax cuts already coming into effect over the next\ntwo years.\nThe WATO will provide a permanent annual tax\noffset of up to $250 for income earned by\nAustralian workers from 1 July 2027, increasing\nthe effective tax-free threshold for workers by\nnearly $1,800 to $19,985 (or up to $24,985 for\nworkers eligible for the Low Income Tax Offset).\nThis is the largest permanent increase in the\neffective tax-free threshold since 2012-13.\nThe WATO will reduce tax on income from work -\nhelping workers keep more of what they earn. The\nWATO will be available automatically after\nworkers lodge their tax return. The WATO will also\nbe available to sole traders running their\nown business.\n$1,000 Instant Tax Deduction\nThe Government is also introducing a $1,000\ninstant tax deduction for work-related expenses to\noffset employment income. The instant tax\ndeduction will make tax time simpler and deliver\nmore cost-of-living relief for workers from the\n2026-27 income year. Around 6.2 million workers\n(42 per cent of taxpayers) will benefit in 2026-27,\nwith an average tax saving of $205.\nThe instant tax deduction allows employees to\nreduce their taxable income by up to $1,000\nwithout keeping receipts when they lodge their\ntax return.\nTaxpayers claiming more than $1,000 in\nwork-related deductions will still be able to do so\nin the usual way. Charitable donations, union and\nprofessional association membership fees and\nother non‑work related deductions can still be\nclaimed on top of the instant tax deduction.\nHelping Australian workers keep more\nof what they earn\nThese changes provide further cost-of-living relief\nand allow Australian workers to keep more of\nwhat they earn.\nAn Australian worker on average earnings would\nreceive a combined benefit of $2,496 from the\n2027-28 income year from the WATO and three\nrounds of tax cuts relative to 2023-24, as well as\nup to $320 from the instant tax deduction, for a\ntotal benefit of up to $2,816.\nThese reforms are part of a tax package which, as\na whole, is broadly revenue neutral over the\nforward estimates so will not add to the outlook\nfor inflation.\n\n| New tax cuts for Australian workers 2\nRelated measures\nIncreasing Medicare levy low-income thresholds\nThe Government will also increase the Medicare\nlevy low-income thresholds by 2.9 per cent for\nsingles, families, and seniors and pensioners from\n1 July 2025. This increase means over 1 million\nAustralians on lower incomes will continue to be\nexempt from paying the Medicare levy or pay a\nreduced levy rate.\nParticipation impacts\nThe Government’s already legislated tax cuts are\nestimated to increase labour supply by 1.3 million\nhours a week, compared to 2023-24 settings. The\nWATO builds on these reforms, providing further\nmodest support to labour supply from\nlower-income taxpayers, likely part-time workers\nand women. By only targeting income from work,\nthe cost is lower than a comparative tax cut that\nalso lowers taxes on non-labour income.\nAverage tax rates\nThe Government’s tax cuts return bracket creep by\nlowering average tax rates for working Australian\ntaxpayers, especially for low- and middle-income\nworkers. An Australian worker on average\nearnings is expected to pay up to $38,977 less tax\nfrom 2024-25 to 2036-37, relative to 2023-24\nsettings.\nThe new tax cuts provide further protection\nagainst bracket creep and lower average tax rates\nfor working Australian taxpayers, with the average\ntax rate across all taxpayers falling from\n25.5 per cent in 2023-24 to 24.7 per cent in\n2027-28. The average tax rate for a worker on\naverage earnings who receives the average benefit\nfrom the instant tax deduction will fall from\n21.9 per cent in 2023-24 to 20.2 per cent in\n2027-28, and is not expected to exceed 2023-24\nlevels until 2032-33 - three years later than under\n2024-25 settings.\nClaire is employed as an occupational\ntherapist and Hugh is employed as a\nhigh school teacher. They both have taxable\nincome of $90,000 per year, after claiming\nwork-related expense deductions (Claire\nclaims $400 and Hugh claims $600). As a\nresult of new decisions announced in this\nBudget, they will collectively pay $320 less in\ntax for the 2026-27 income year and $820\nfrom 2027-28.\nCombined with the Government’s previously\nannounced tax cuts, Claire and Hugh will\ncollectively pay $5,750 less tax from the\n2027-28 income year, compared to 2023-24\ntax settings.\nMark is a chef who earns $75,000 per year.\nUnder the first round of tax cuts, Mark paid\n$1,554 less tax in 2024-25 and 2025-26,\ncompared to 2023-24 tax settings.\nWhen combined with the new tax cuts, the\nWATO and the instant tax deduction, this tax\nsaving will grow to $2,142 for the 2026-27\nincome year and $2,660 from 2027-28,\nassuming he has no work-related expenses.\nThe decisions announced in this Budget mean\nthat Mark will receive an additional tax\nbenefit of $570 per year from 2027-28.\n\n| New tax cuts for Australian workers 3\nAverage tax rates for a worker on average earnings20\n22\n2\n2\n2\nverage tax rate 202 2 tax settings 202 25 tax settings 202 2 udget settings\nNote: Prior to 2026-27, the worker on average earnings is assumed to have taxable income equal to annualised estimates of\naverage weekly earnings (AWE) after incorporating an annual deduction for work-related expenses of $359. From 2026-27\nonwards, the worker’s taxable income is further reduced by the instant tax deduction (providing a tax benefit of $205). From\n2027-28 the worker is assumed to benefit from the full Working Australians Tax Offset. Forecasts for AWE are as at the\n2026-27 Budget. Average tax rate is defined as the ratio of tax payable to taxable income. Tax payable is calculated\naccounting for basic tax rates and thresholds and the Medicare levy.\nSource: Treasury\nCombined annual tax cut compared to 2023-24 tax settings\nIncome from work 2026-27\nTwo tax cuts\n2027-28 onwards\nCombined benefit with\ninstant tax deduction\n2027-28 onwards\nThree tax cuts + WATO\n2027-28 onwards\nCombined benefit with\ninstant tax deduction\nFull-time national\nminimum wage -\n$49,296\n$1,179 Up to $1,514 $1,697 Up to $2,032\nMedian income -\n$74,100\n$1,800 Up to $2,120 $2,318 Up to $2,638\nAverage income -\n$81,245\n$1,978 Up to $2,298 $2,496 Up to $2,816\nAverage full-time\nincome - $106,657\n$2,613 Up to $2,933 $3,131 Up to $3,451\nNote: This table presents stylised cameos on the assumptions that an individual is an Australian tax resident, only has income from\nwork and has work-related expenses of less than $1,000 from 2026-27. The reduction in tax liability is calculated by only\ntaking into account the basic tax scales, Low Income Tax Offset (as applicable) and Medicare levy. The instant tax deduction\nbenefit for an individual on the full-time national minimum wage includes additional benefit from the Low Income Tax Offset\ndue to the reduction in their taxable income.\nSource: Fair Work Ombudsman; ABS, Employee earnings, Aug 2025; ABS, Average Weekly Earnings, Nov 2025.\n\n| New tax cuts for Australian workers 4\nKey facts and figures\n• After three rounds of tax cuts, the WATO and the instant tax deduction, an Australian worker on\naverage earnings could receive a combined benefit of up to $2,816 from the 2027-28 income\nyear relative to 2023-24 tax settings.\n• Around 13 million Australian workers, including 6.3 million women, will receive the WATO for the\n2027-28 income year, of whom 97 per cent are expected to receive the full $250 offset.\n• The Government’s combined tax cuts are lowering average tax rates for all working Australian\ntaxpayers, with the average tax rates across all taxpayers falling from 25.5 per cent in 2023-24 to\n24.7 per cent in 2027-28.\n• The Government’s combined tax cuts are expected to keep average tax rates for an Australian\nworker on average earnings who receives the average benefit from the instant tax deduction\nbelow 2023-24 levels until 2032-33 - three years later than under 2024-25 settings.\n• The WATO builds upon the Government’s already legislated tax cuts which are estimated to\nincrease labour supply by 1.3 million hours per week, relative to 2023-24 settings.\n• Around 6.2 million workers will benefit from the instant tax deduction with an average saving of\n$205 for 2026-27.\n\n| New tax cuts for Australian workers 5\nCombined annual tax cut compared to 2023-24 tax settings ($)\nIncome from work 2026-27\nTwo tax cuts\n2027-28 onwards\nCombined benefit\nwith instant\ntax deduction\n2027-28 onwards\nThree tax cuts + WATO\n2027-28 onwards\nCombined benefit\nwith instant tax\ndeduction\n20,000 - - - -\n30,000 673 Up to 923 1,041 Up to 1,281\n40,000 872 Up to 1,092 1,340 Up to 1,550\n50,000 1,197 Up to 1,532 1,715 Up to 2,050\n60,000 1,447 Up to 1,782 1,965 Up to 2,300\n70,000 1,697 Up to 2,017 2,215 Up to 2,535\n80,000 1,947 Up to 2,267 2,465 Up to 2,785\n90,000 2,197 Up to 2,517 2,715 Up to 3,035\n100,000 2,447 Up to 2,767 2,965 Up to 3,285\n110,000 2,697 Up to 3,017 3,215 Up to 3,535\n120,000 2,947 Up to 3,267 3,465 Up to 3,785\n130,000 3,647 Up to 3,967 4,165 Up to 4,485\n140,000 3,997 Up to 4,387 4,515 Up to 4,905\n150,000 3,997 Up to 4,387 4,515 Up to 4,905\n160,000 3,997 Up to 4,387 4,515 Up to 4,905\n170,000 3,997 Up to 4,387 4,515 Up to 4,905\n180,000 3,997 Up to 4,387 4,515 Up to 4,905\n190,000 4,797 Up to 5,187 5,315 Up to 5,705\n200,000 4,797 Up to 5,267 5,315 Up to 5,785\nNote: This table presents stylised cameos on the assumptions that an individual is an Australian resident, only has income from\nwork and has work-related expenses of less than $1,000 from 2026-27. The reduction in tax liability is calculated by only\ntaking into account the basic tax scales, Low Income Tax Offset (as applicable) and Medicare levy. The tax cut benefit for an\nindividual with taxable income of $30,000 includes the increase in the Medicare levy low-income thresholds from 2024-25 and\n2025-26; their Medicare levy phases in at 10 cents per dollar above the Medicare levy low-income threshold. The instant tax\ndeduction benefit for an individual with taxable income between $40,000 and $60,000 includes additional benefit from the\nLow Income Tax Offset due to the reduction in their taxable income.","sortOrder":16},{"sectionNumber":"budget-17","sectionType":"budget_page","heading":"Tax explainer - Minimum tax on discretionary trusts","content":"Source: https://budget.gov.au/content/factsheets/download/tax-explainers-minimum-tax-discretionary-trusts.pdf\n\n| Minimum tax on discretionary trusts 1\nMinimum tax on discretionary trusts\nThe Government is improving the fairness of the tax system by introducing a 30 per cent\nminimum tax on discretionary trusts. Expanded rollover relief will be available for small\nbusiness and others to support restructuring out of discretionary trusts.\n30 per cent minimum tax on\ndiscretionary trusts\nMinimum tax on discretionary trusts\nThe Government is introducing a 30 per cent\nminimum tax on discretionary trusts from\n1 July 2028.\nThe tax will be paid by the trustee as it is the\ntrustee who controls distributions. Beneficiaries\nwill still need to declare their trust income in\ntheir tax returns, but beneficiaries, other than\ncorporate beneficiaries, will receive\nnon-refundable credits for the tax payable\nby the trustee.\nThe introduction of a 30 per cent minimum rate\nwill mean a fairer rate of tax paid on discretionary\ntrust income, better aligning the tax rate on trust\nincome with the tax rates paid by workers.\nGrowing use of discretionary trusts is\nincreasingly unsustainable\nSince 2001-02, the number of discretionary trusts\nin Australia has doubled, exceeding the growth in\ncompanies (which have grown by 70 per cent).\nAustralia now has over one million trusts, of\nwhich around 840,000 (80 per cent) are\ndiscretionary trusts.\nIn 2022-23, discretionary trusts distributed\n$142.4 billion in income to other entities, with\naverage annual growth in income of\n7.8 per cent since 2011-12.\nThe majority of trust income flows to the top\nearning 10 per cent of families and approximately\n90 per cent of total private trust wealth is held by\nthe wealthiest 10 per cent of households\n(those with net worth above around $2.3 million).\nBetter aligning the tax rate on trust\nincome with the tax rate paid by\nworkers\nTrusts, including discretionary trusts, can assist\nwith asset protection and succession planning.\nHowever, discretionary trusts also allow lower tax\nrates to be achieved through ‘income splitting’,\nwhere trustees of discretionary trusts allocate all\nor part of their income to others who have a lower\nmarginal tax rate, while often retaining the\nincome. Treasury analysis shows that in 2022-23,\non average, families with discretionary trusts faced\nan average tax rate around 4 percentage points\nlower compared with families with similar incomes\nwho do not use a trust.\nThis flexibility is not available to individuals\nwithout a trust, including workers who pay tax on\nwages at marginal rates. Numerous reviews of the\ntax system over the past 50-years have raised\nconcerns that different structures used to hold\nassets or earn an income can result in different tax\noutcomes for people with similar levels of income\n(see Table 1).\nIntroducing a 30 per cent minimum tax brings the\ntax outcome on income earned in a discretionary\ntrust closer to that of wage and salary earners who\npay a 30 per cent marginal rate on incomes\nbetween $45,001 and $135,000. This improves\nthe fairness and sustainability of the tax system.\n\n| Minimum tax on discretionary trusts 2\nTable 1: Tax reviews raising discretionary\ntrust concerns\nReview Key concerns\nAsprey Report\n(1975)\nIncome splitting through trusts\nundermines tax integrity.\nReview of\nBusiness Taxation\n(1999)\nInconsistent tax treatment\nbetween trusts, companies and\nother entities.\nAustralia’s Future\nTax System (2009)\nTrusts remain a source of tax\navoidance and complexity.\nRe:think (2015) Discretionary trusts offer tax\nadvantages to individuals who\nshare the income from savings.\nHow it works\nTrustees currently pay tax on any income that is\nretained in the trust, as well as paying tax on\nbehalf of particular beneficiaries (including\nchildren). The trustee determines which\nbeneficiaries are to be made presently entitled to\nthe income of the trust and the beneficiary pays\ntax based on that entitlement at their marginal\ntax rate.\nUnder these changes, the trustee of a\ndiscretionary trust will continue to determine the\ntrust income that beneficiaries are entitled to each\nyear, and beneficiaries will continue to be\nresponsible for including trust distributions in\ntheir income tax returns.\nHowever, the trustee will now pay 30 per cent tax\non the taxable income of the trust (unless higher\nrates apply). Individuals and other non-corporate\nbeneficiaries will receive non-refundable tax\ncredits for the tax payable by the trustee, which\nreduces their income tax payable. This recognises\nthe tax already paid, while ensuring the tax paid\non that income is not lower than 30 per cent.\nTrustees will be required to calculate, report and\npay the minimum tax, as well as to notify\nbeneficiaries of their entitlements and associated\ntax credits. The mechanism for collecting the\nminimum tax will be subject to consultation, but is\nexpected to be consistent with established\ncollection mechanisms.\nTo ensure the use of refundable franking credits\ndoes not undermine the minimum tax:\n• trustees that receive franked dividends will be\nrequired to use their franking credits to pay the\nminimum tax; and\n• corporate beneficiaries will not receive\nnon-refundable credits for tax payable by the\ntrustee, to avoid them converting these to\nrefundable franking credits to avoid the\nminimum tax.\nKey aspects of the changes will be finalised\nfollowing consultation with stakeholders. As well\nas the mechanism for collecting the minimum tax,\nstakeholder views will also be sought on how the\ntrustee uses franking credits that exceed the\nminimum tax liability, and on the rollover relief\nprovided to support restructuring.\nRollover relief\nRollover relief will be available to assist small\nbusinesses and others that wish to restructure out\nof a discretionary trust into other arrangements,\nsuch as a company or a fixed trust.\nThis will provide expanded relief from income tax\nconsequences, including capital gains tax, for\nthose who choose to restructure, and will be\navailable for three years from 1 July 2027.\nFrom 1 January 2027, the Australian Small\nBusiness and Family Enterprise Ombudsman will\nbe available to assist small businesses to\nunderstand the options available to them and\nwhere they can get further advice. Specific\narrangements will be put in place by the\nAustralian Securities and Investments Commission\nto support small businesses that wish\nto incorporate.\n\n| Minimum tax on discretionary trusts 3\nExclusions\nThe minimum tax will not apply to other types of\ntrusts such as fixed and widely held trusts,\ncomplying superannuation funds, special disability\ntrusts, deceased estates and charitable trusts.\nSome types of income such as primary production\nincome, certain income relating to vulnerable\nminors, amounts to which non-resident\nwithholding tax applies, and income from assets of\ntestamentary trusts existing at announcement will\nalso be excluded.\nPolicy impact\nTrustees and individuals\nAll trustees of discretionary trusts in scope will be\nrequired to pay the minimum tax, but where a\ntrust is already distributing to non-corporate\nbeneficiaries with a tax rate of 30 per cent or\nhigher there will be no overall increase in tax paid.\nAround half of discretionary trusts are not\nexpected to be affected in any given year. Those\nthat are affected may restructure into a company\nor fixed trust structure not subject to the\nminimum tax, or make different decisions about\nthe distribution of income to beneficiaries to\nreduce their tax liability.\nMore than 95 per cent of individual taxfilers will\nnot be affected by these changes in any given\nyear. Around 810,000 adults, or 5 per cent of\nindividual taxfilers, received distributions from\ndiscretionary trusts in 2022-23, plus 120,000\nnon-filers, who are predominantly minors.\nSince the financial benefit of income splitting goes\nto the primary earner in most cases, the minimum\ntax will primarily align the tax rates of the\nhigh-income primary earner more closely to wage\nand salary earners on similar incomes.\nSmall businesses\nAround 350,000 active small businesses (less than\n15 per cent of all active small businesses) operate\nthrough a discretionary trust structure. Of these,\n40 per cent (140,000) are not expected to pay\nadditional tax or need to restructure in any given\nyear. As a result, more than 90 per cent of all small\nbusinesses in any given year will not be affected by\nthese changes.\nSmall businesses sometimes use trust structures\nfor tax reasons, despite the drawbacks of trusts for\nrunning a business. For example, trusts do not\nprovide a simple way to retain earnings and have\nmore difficulties accessing debt financing or\nattracting equity finance.\nSmall businesses will be able to reduce the impact\nof the minimum tax by employing beneficiaries\nworking in the business, rather than paying them a\ntrust distribution. Payments of salary or wages to\nemployees will not attract the minimum tax.\nAlternatively, small businesses could choose to\nrestructure their operations, for example into a\ncompany or a fixed trust.\nRollover relief will facilitate restructuring by\nensuring there are no income tax consequences,\nincluding capital gains tax, for those that wish to\nmove out of discretionary trust structures.\nSmall businesses that choose to restructure into a\ncompany will benefit from access to dividend\nimputation and a lower 25 per cent corporate tax\nrate where their aggregated annual turnover is\nless than $50 million and no more than 80 per cent\nof their assessable income is passive income.\nCompanies also provide simpler ways to retain\nearnings, to access debt financing and to introduce\nnew equity.\nRestructuring into a fixed trust will allow a\nbusiness to retain the benefits of a trust structure\nwhile providing beneficiaries with more certain\nentitlements.\n\n| Minimum tax on discretionary trusts 4\nCorporate beneficiaries\nTrusts can distribute to corporate beneficiaries\nthat have access to corporate tax rates and\nfranking credits, and which can be used to defer\ntax for underlying shareholders, who are often\nalso trust beneficiaries.\nUnder the minimum tax, corporate beneficiaries\nwill be assessed based on the trust income to\nwhich they are entitled, without being able to\nclaim credits for tax payable by the trustee. This\nwill ensure the minimum tax cannot be avoided by\ncycling income through a ‘bucket’ company.\nAround 94 per cent of companies did not receive a\ndistribution from a discretionary trust in 2022-23.\nAustralian Taxation Office data indicates that of\nthe 80,000 companies receiving distributions,\n83 per cent did not have evidence of business\nactivity, suggesting they operate primarily for tax\npurposes.\nThe introduction of the minimum tax will reduce\nthe incentive for trustees to distribute to\ncorporate beneficiaries set up just to receive trust\ndistributions from discretionary trusts. This will\ndiscourage the use of structures that add\ncomplexity to the tax system and compliance costs\nfor taxpayers.\nInternational comparisons\nAustralia has a high use of trusts compared with\njurisdictions with similar tax systems.\nIn 2022-23, there were more than one million\ntrusts in Australia, or around 40 trusts per\n1,000 people. By comparison, the UK is estimated\nto have around 2 trusts per 1,000 people, and the\nUS around 9 trusts per 1,000 people. New Zealand\nhas higher use of trusts, estimated at around\n44 trusts per 1,000 people.\nWhile different jurisdictions use different tax\nstructures for different purposes, the combination\nof the high use of trusts in Australia, and the\navailability of the discretionary trust structure to\nmore flexibly tax income at marginal rates,\npresents challenges for the fairness and\nsustainability of the tax system.\n\n| Minimum tax on discretionary trusts 5\nCameo - using a discretionary trust can result in a lower rate of tax compared to an\nordinary worker\nYing is a youth worker earning $80,000 in 2028-29. Ying will pay $15,602 in tax, with a marginal rate\nof 30 per cent (plus Medicare levy) and an average tax rate of 19.5 per cent.\nSteven earns $200,000 of income from investments through a family discretionary trust. Steven as\ntrustee is able to split the taxable income of $200,000 among his family members. Steven chooses to\nmake himself and each of his three family members, who have no other income, entitled to $50,000\nof the trust’s income. In total, Steven’s family pays $24,008 tax, an average tax rate of around\n12 per cent.\nIf Steven had not used a discretionary trust to split his income with his family, he would have\npaid $59,602 in tax. By using a discretionary trust, Steven has reduced his tax liability by $35,594\nand achieved a tax rate significantly lower than Ying.\nCameo - comparison to equivalent wage income\nIn 2028-29, Angela has $200,000 in wage income, equal to Steven’s $200,000 in investment income in\nthe example above.\nAngela receives her income as a salary and will pay $59,352 in tax, an average tax rate of around\n30 per cent.\nWith a minimum tax in place, Steven’s trust would pay 30 per cent tax on the $200,000 of investment\nincome, regardless of how this income was distributed. This would bring the total tax paid on\nSteven’s income to around the amount of tax paid by Angela.\nCameo - comparison of tax outcomes of different business structures\nIn 2028-29, Kurt and Loretta each earn $300,000 operating small businesses.\nLoretta provides her services through a company. Loretta pays herself a salary as an employee of\n$100,000 and retains the remaining income in the company to build the business. The company pays\nthe small business rate of 25 per cent on this profit. Overall, $72,002 of tax will be paid.\nKurt provides his services through a family discretionary trust with himself as the trustee. The trust\npays Kurt a salary of $100,000 as an employee and has remaining taxable income of $200,000. Kurt\nmakes four of his extended family members, who have no other income, each entitled to $50,000,\nwhile retaining the money in the trust to build the business. In total, Kurt’s family will pay $42,010\nin tax.\nWith a minimum tax in place, the trust would pay 30 per cent tax on the $200,000 of income not paid\nas wages, regardless of how this income was distributed. Overall, $86,002 of tax will be paid if Kurt\ndoes not change the distributions made to his family members. Kurt would pay less tax operating\nthrough a company than a trust, once the minimum tax is in place, by accessing the small business\ntax rate.","sortOrder":17}],"analysis":{"summary":{"complexity_score":1,"scope_assessment":{"changed":false,"description":"This summary restates and analyses measures presented in the Budget documents (Overview; Tax reform; Fuel supply and security; Productivity) without adding or altering policy scope. It highlights mechanics, intended purposes and implementation trade‑offs as described in the source material."},"complexity_factors":["Multiple interacting tax, housing and energy measures with phased start dates and new administrative requirements"],"plain_english_summary":"What the Budget changes mechanically: the Budget legislates recurrent tax and spending changes plus sectoral programs with staged start dates. Key tax mechanics include a $250 Working Australians Tax Offset (WATO) from 2027-28, two further cuts to marginal rates (16%→15% from 1 July 2026, then to 14% from 1 July 2027), a $1,000 instant work‑related deduction from 2026-27, a permanent $20,000 instant asset write‑off for small businesses from 1 July 2026, loss carry back from 2026-27 and targeted loss refundability for start‑ups from 2028-29 (Tax reform; Productivity; Cost of living). The Budget also changes property and trust taxation: negative gearing limited to new builds from 1 July 2027; the 50% CGT discount replaced with CPI cost base indexation plus a 30% minimum tax on real gains from 1 July 2027 (with transitional rules); and a 30% minimum tax on discretionary trusts from 1 July 2028 (Tax reform; Tax explainer documents).\n\nOn fuel and energy the Government commits a $14.8 billion Strengthening Fuel Resilience Package including temporary import underwriting, a $7.5 billion Fuel and Fertiliser Security Facility, a $3.2 billion government‑controlled Australian Fuel Security Reserve and a 20% domestic gas reservation starting 1 July 2027 (Fuel supply and security).\n\nThe Budget says these measures are intended to ease cost‑of‑living pressures, boost investment and secure supplies (Overview; Cost of living; Tax reform; Fuel supply and security). Practical trade‑offs and implementation issues the documents highlight: tax changes shift tax burdens across income and asset owners (the Budget provides Treasury modelling on distributional and housing impacts and transitional rules to limit market disruption) and require new administrative processes (ATO tools for CGT indexation; trustee reporting and payment of minimum tax) that create compliance and reporting obligations (Tax explainer; Minimum tax on discretionary trusts). The gas reservation and fuel reserve entail legislation and consultations with industry and trading partners (Fuel supply and security). Business‑facing measures (instant write‑off, loss carry back, venture capital incentives) increase cash flow and investment incentives for small firms and start‑ups but are phased and capped (Productivity; Tax reform).\n\nWatch points identified in the Budget materials: legislative timing and consultation for the gas reservation and tax reforms, ATO and trustee implementation of new reporting and valuation rules, and the interaction of housing demand substitution toward new builds given negative gearing changes (Tax reform; Fuel supply and security)."},"flash_summary":{"complexity_score":8,"scope_assessment":{"changed":false,"description":"The material presents a set of new Budget measures and implementation timetables but does not indicate that the scope of the announced reforms has been narrowed or expanded relative to the announced package within the source text. The source describes staged commencements, grandfathering and transitional arrangements (for negative gearing and CGT) and notes areas for further consultation (trust tax collection mechanisms, gas reservation legislation), but does not state a change of scope from the instrument's original stated objectives (see: Tax reform; Negative Gearing & CGT explainer; Minimum tax explainer; Fuel supply and security)."},"complexity_factors":["Large number of interlinked tax changes with staggered commencement dates (WATO from 2027-28; CGT changes from 1 July 2027; trust minimum tax from 1 July 2028) (see: Tax reform; fact sheets).","Multi-module transitional and valuation rules for CGT (asset valuation at 1 July 2027, choice of valuation method, ATO tools) increasing calculation complexity (see: Negative Gearing & CGT explainer).","Trust minimum tax requires trustee reporting, beneficiary crediting, and detailed design (franking credit interaction, exclusions, rollover relief) subject to further consultation (see: Minimum tax explainer).","Overlap of tax measures, business incentives and welfare/support changes (loss carry back, loss refundability, instant deductions, WATO) creates interactions affecting effective tax rates and cash flows across entity types (see: Tax reform; New tax cuts fact sheet).","Regulatory and administrative changes across multiple agencies (ATO, ACCC, Fair Work Commission, Export Finance Australia, states/territories) increase coordination and compliance demands (see: Fuel supply; Cost of living; Productivity).","Economic modelling and behavioural assumptions embedded in measures (Treasury modelling on housing impacts, labour supply effects) require complex forecasting and carry implementation risk (see: Negative Gearing & CGT explainer; New tax cuts fact sheet).","Multiple policy domains (taxation, energy security, social services, defence, housing, aged care, NDIS) each with bespoke funding, rules and delivery mechanisms, producing cross‑policy implementation complexity (see: Budget Papers and theme pages)."],"plain_english_summary":"### What this instrument changes (mechanically)\n\n- It announces a package of revenue and spending measures across many policy areas, implemented through Budget decisions and future legislation or regulations. Key mechanical changes include: \n  - New worker tax measures: a $250 Working Australians Tax Offset (WATO) from 2027-28, a $1,000 instant tax deduction for work‑related expenses from 2026-27, and further cuts to marginal tax rates (16% → 15% from 1 July 2026, then 14% from 1 July 2027) (see: Tax reform; New tax cuts fact sheet).\n  - Changes to property and investment taxation: negative gearing limited to new builds from 1 July 2027 for residential property purchases after announcement; replacement of the 50% CGT discount with CPI cost base indexation plus a 30% minimum tax on real capital gains from 1 July 2027; transitional valuation rules for assets at 1 July 2027 (see: Tax reform; Tax explainer - Negative Gearing and Capital Gains Tax Reform).\n  - A 30% minimum tax on discretionary trusts from 1 July 2028, with trustee reporting, beneficiary tax credits, exclusions for certain trust types, and three years of rollover relief from 1 July 2027 to assist restructuring (see: Tax reform; Tax explainer - Minimum tax on discretionary trusts).\n  - Business support changes: reintroduction of loss carry back from 2026-27; loss refundability for eligible start‑ups from 2028-29 (limited to early years and caps tied to FBT/withholding tax paid); permanent $20,000 instant asset write‑off for small businesses from 1 July 2026 (see: Tax reform; Productivity).\n  - Fuel and energy measures: a $14.8 billion Strengthening Australia’s Fuel Resilience Package including relaxed Minimum Stockholding Obligation, underwriting cargoes, adjusted fuel standards, a $7.5 billion Fuel and Fertiliser Security Facility, an Australian Fuel Security Reserve ($3.2 billion) to raise diesel and jet reserves to ~50 days, and a 20% domestic gas reservation from 1 July 2027 (see: Fuel supply and security).\n  - Temporary reliefs and other administrative measures: halving fuel excise and reducing heavy vehicle road user charge to zero for three months (with state contributions), ACCC weekly fuel price reporting and strengthened ACCC powers, Fair Work Commission powers to vary fuel‑related contract terms, ATO temporary relief channels for affected businesses, and expanded Digital ID and regulatory‑reform and approvals acceleration measures (see: Fuel supply; Cost of living; Productivity).\n  - Service and spending commitments: large new funding allocations across health (including $25 billion extra for public hospitals, PBS listings), aged care, NDIS reforms with four pillars and $2 billion Thriving Kids program (part of $5 billion Foundational Supports), defence ($53 billion additional investment over ten years), housing infrastructure funds, transport and community infrastructure (see: Care and opportunity; Security and investment; Budget Papers).\n\n### Who it affects (who pays, who decides, and how behaviours change)\n\n- Workers and taxpayers: Most employed taxpayers gain via the WATO, rate cuts and the $1,000 instant deduction; these measures reduce taxable income or tax payable for many individuals (13 million workers targeted for WATO; ~6.2 million workers estimated to benefit from the instant deduction) (see: Cost of living; New tax cuts fact sheet).\n- Property investors and prospective buyers: Investors buying established dwellings after announcement will face limits on using rental losses against other income (they may carry forward losses to offset future residential income) and will be subject to new CGT arrangements on gains accruing after 1 July 2027; investors in new builds retain negative gearing and may choose between the old 50% CGT discount or the new indexation/minimum tax regime (see: Tax reform; Tax explainer - Negative Gearing and Capital Gains Tax Reform).\n- Discretionary trust users and small businesses: Trustees of discretionary trusts will pay a 30% minimum tax; many small business owners who operate via discretionary trusts may restructure, employ beneficiaries, or convert to companies or fixed trusts, helped by rollover relief and Ombudsman/ASIC support (see: Tax explainer - Minimum tax on discretionary trusts).\n- Companies and start‑ups: Eligible loss carry back and loss refundability provide cash‑flow support to companies (estimates: up to 85,000 companies for carry back; up to 25,000 young companies for refundability) (see: Tax reform).\n- Fuel supply chain participants and consumers: Fuel wholesalers, refiners, exporters and LNG producers face changes (stockholding obligations, underwriting, an Australian Fuel Security Reserve and a 20% domestic gas reservation for LNG exporters from 1 July 2027). Consumers receive temporary excise relief; the ACCC is directed to increase price reporting and enforcement (see: Fuel supply and security; Cost of living).\n- Service providers and government agencies: Trustees must calculate, report and pay the minimum trust tax; ATO will provide tools for CGT indexation and 1 July 2027 valuations; the ACCC and Fuel Supply Taskforce have expanded monitoring/enforcement roles; Fair Work Commission has expanded ordering power (see: Tax explainer - Minimum tax on discretionary trusts; Tax explainer - Negative Gearing and Capital Gains Tax Reform; Fuel supply and security).\n\nBehavioural and market effects signalled by the source text (mechanisms):\n- Investors are financially incentivised to prefer new‑build residential investments (negative gearing retained) and to factor the new CGT indexing/minimum tax into holding/selling decisions (see: Negative gearing & CGT explainer).\n- Trustees may change distribution policies or restructure into companies/fixed trusts to manage new minimum tax exposure; rollover relief is explicitly provided to reduce immediate tax costs of restructuring (see: Minimum tax explainer).\n- Small businesses are incentivised to invest in eligible assets quickly (permanent $20,000 immediate deduction) and take advantage of loss carry back/refundability for cash flow (see: Tax reform; Productivity).\n- LNG exporters and domestic gas suppliers will face supply‑allocation obligations (20% reservation) from 1 July 2027; this directly changes contractual and export decisions (see: Fuel supply and security).\n\n### Costs, incentives, implementation and compliance issues (concrete mechanisms)\n\n- Compliance and reporting burdens: trustees will be required to calculate, report and pay the minimum tax and notify beneficiaries; the mechanism for collection is to be consulted but is expected to follow established collection mechanisms (source: Minimum tax explainer). The ATO will provide tools for CGT indexation and for estimating asset values at 1 July 2027 (source: CGT explainer), implying administrative reliance on agency guidance.\n- Discretionary government discretion and consultation: several measures require further legislation or consultation (the domestic gas reservation has final legislation consultation scheduled; collection mechanism and franking credit treatment for the trust minimum tax will be finalised after consultation) (see: Fuel supply and security; Minimum tax explainer).\n- Fiscal and reallocation trade‑offs: the package reallocates funds across large spending commitments (e.g., $25 billion for hospitals, $53 billion for defence, billions for fuel security and energy programs) and funds tax cuts and business incentives. Some measures are explicitly funded from other tax changes (the Budget materials present modelling and net fiscal impacts across forward estimates) (see: Budget Papers; Care and opportunity; Security and investment).\n- Targeting and distribution of effects: the WATO and instant deduction are broad and affect millions (diffuse benefits); the minimum trust tax and CGT/negative gearing changes concentrate effects on particular investor cohorts and trust users (the Budget papers estimate ~5% of individual taxfilers receive trust distributions; ~1% of taxfilers acquire negatively geared properties each year) (see: Tax explainer - Minimum tax on discretionary trusts; Negative gearing & CGT explainer).\n- Implementation risk and market responses noted in the source: transitional rules (e.g., grandfathering properties held at announcement, valuation options at 1 July 2027) are designed to limit market disruption; Treasury modelling anticipates modest, temporary reductions in house price growth and small upward pressure on rents (<$2/week), and estimates roughly 75,000 additional owner‑occupiers over a decade from the housing tax reforms (see: Negative Gearing & CGT explainer).\n\n### What the instrument claims to achieve (stated rationale) and the practical trade‑offs the source itself identifies\n\n- Stated purposes: ease cost‑of‑living pressures (tax cuts, fuel relief), strengthen fuel and fertiliser security, improve productivity and investment (tax and regulatory reforms), support first home buyers and housing supply (negative gearing/CGT changes plus infrastructure funding), improve fairness and sustainability of the tax system (minimum trust tax), and preserve NDIS focus and fiscal sustainability (NDIS reforms) (see: Overview; Cost of living; Tax reform; Care and opportunity; Fuel supply and security).\n- Source‑identified trade‑offs and risks: the documents acknowledge compliance costs (ATO tools and reporting), need for consultation on collection mechanisms, transitional arrangements to limit market disruption, and modelling that the housing measures may slightly slow price growth and have small rent impacts while supporting more owner‑occupiers (see: Negative Gearing & CGT explainer). The source also signals that some reforms (e.g., trust minimum tax, CGT changes, gas reservation) involve significant design choices that require further legislative or regulatory detail (see: respective fact sheets).\n\n### Bottom line (mechanics and incentives)\n\n- The Budget uses a mix of tax cuts, targeted tax base changes and spending allocations to reallocate fiscal resources and change private incentives. Mechanically, it reduces taxes on labour (WATO, rate cuts, instant deduction), raises or tightens taxes on certain capital structures and investments (CGT indexing + minimum tax; trust minimum tax; negative gearing limits), supports businesses via immediate write‑offs and loss relief, and implements supply‑side interventions in energy/fuel, housing infrastructure and defence. The measures change incentives for property investors, trust users, employers and LNG exporters by altering tax treatment, reporting obligations and statutory reservation/stockholding rules (see: Tax reform; Fuel supply and security; Minimum tax explainer; Negative Gearing & CGT explainer)."}},"importantCases":[],"_links":{"self":"/api/acts/australian-budget-2026-27","history":"/api/acts/australian-budget-2026-27/history","analysis":"/api/acts/australian-budget-2026-27/analysis","conflicts":"/api/acts/australian-budget-2026-27/conflicts","importantCases":"/api/acts/australian-budget-2026-27/important-cases","documents":"/api/acts/australian-budget-2026-27/documents"}}