2026-27

Over four years from 1 July 2026, the Government budgets $86 million to deliver Phase 2 of the Counter Fraud Strategy to modernise the prevention and detection of fraud in the tax and super systems. Plus $9.7 million per year ongoing from 2030–31.  

An additional $17.8 million will strengthen ASIC’s supervision and enforcement of managed investment schemes. This is in direct response to the Shield and First Guardian collapses for increased protection from predatory schemes and will be spread over the four years from 1 July 2026. 

A trio of personal income tax changes aims to reduce the tax on working people’s incomes: 

• A Working Australians Tax Offset of $250 tax offset from the financial year starting 1 July 2027. 
• The tax rate of income between $18,201 and $45,000 is currently 16%. This change is already legislated and will reduce to 15% from 1 July 2026, and again to 14% from 1 July 2027. 
• A new instant tax deduction of up to $1,000 will allow people to offset work-related expenses without receipts from 1 July 2026. This change has also been legislated. 

Plus, low-income threshold before the Medicare Levy is applied will increase by 2.9%, meaning more people will avoid or pay less. 

A further $5.9b investment to add medicines to the Pharmaceutical Benefits Scheme (PBS) that treat diseases including cystic fibrosis, chronic kidney disease and various cancers. 

Negative gearing: Taking a balanced approach to avoid spooking the property market, grandfathering was central to the Government’s plans: 

• Current rules will apply to investments held on 12 May 2026. 
• New rules will allow negative gearing on new builds only. 

Capital Gains Tax: Again, a balance of old and new is planned: 

• Current rules has 50% of the capital gain made on an investment not assessed for tax purposes. This will continue to apply to any gains made before 1 July 2027. 
• Capital gains made from 1 July 2027 – for example on the sale of a house or share investments – will be assessed relative to inflation to tax ‘real’ gains. That is, the gain that’s made after factoring in the increase relative to inflation.  

These measures are expected to raise $3.6b to support the construction of 75,000 homes over the next decade. 

Investment in infrastructure programs will need skilled workers who build the nation and creates new employment opportunities, including: 

• $8.6b over 11 years for essential road and rail infrastructure projects. 
• $2.1b over 4 years to increase the supply of housing and related infrastructure.  
• Focus on boosting productivity through streamlining regulatory systems and increase the speed developments can go to market. 

A trio of personal income tax changes aims to reduce the tax on working people’s incomes: 

• A Working Australians Tax Offset of $250 tax offset from the financial year starting 1 July 2027. 
• The tax rate of incomes of $18,201 and $45,000 is currently 16%. This is planning to reduce to 15% from 1 July 2026, and again to 14% from 1 July 2027. 
• A new instant tax deduction of up to $1,000 will allow people to offset work-related expenses without receipts from 1 July 2026. 

Plus, low-income threshold before the Medicare Levy is applied will increase by 2.9%, meaning more people will avoid or pay less. 

If you have private health insurance and are over age 65, the Private Health rebate will no longer be discounted. Instead, this reduces from 28% to 24% from 1 April 2027. And if you’re over 70, it will reduce from 32% to 24%. 

A further $5.9b investment to add medicines to the Pharmaceutical Benefits Scheme (PBS) that treat diseases including cystic fibrosis, chronic kidney disease and various cancers. 

The Government seeks to save $218m over five years from 20 September 2026 (and $62.3 million per year after that) by changing the Pension Supplement:  

• Extending payment of the full Pension Supplement from six weeks to 12 weeks, for recipients who are temporarily absent from Australia. 
• Stopping payment for those who permanently live overseas. 

Negative gearing: Taking a balanced approach to avoid spooking the property market, grandfathering was central to the Government’s plans: 

• Current rules will apply to investments held on 12 May 2026. 
• New rules will allow negative gearing on new builds only. 

Capital Gains Tax: Again, a balance of old and new is planned: 

• Current rules has 50% of the capital gain made on an investment not assessed for tax purposes. This will continue to apply to any gains made before 1 July 2027. 
• Capital gains made from 1 July 2027 – for example on the sale of a house or share investments – will be assessed relative to inflation to tax ‘real’ gains. That is, the gain that’s made after factoring in the increase relative to inflation.  

These measures are expected to raise $3.6b to support the construction of 75,000 homes over the next decade. 

Temporary measures that formed part of previous budgets allowing up to $20,000 instant asset write-offs are planned to become a permanent opportunity for business. 

Investments of $75m over four years from 1 July 2027 for a new, modern skills assessment system for Trades Recognition Australia (TRA). This aims to facilitate the integration of occupational licensing – working with states and territories – pilot streamlined qualification pathways for priority trades such as electricians and plumbers.