2026–27 Federal Budget: Key Announcements

On Tuesday, 12 May 2026, Treasurer Jim Chalmers handed down the 2026–27 Federal Budget, outlining what the Government has described as its most ambitious reform agenda to date.

This year’s Budget focuses heavily on housing affordability, cost-of-living pressures, healthcare investment and long-term economic resilience, while also introducing significant proposed changes to property investment taxation.

The Budget has been delivered against a backdrop of persistent inflation, higher interest rates, global fuel price volatility and ongoing housing supply challenges.

While many of the announced measures are aimed at improving housing accessibility for younger Australians, the proposed reforms are expected to have broad implications for investors, businesses, employers and individual taxpayers alike.

Key Initiatives Include:

Housing

• Changes to the tax system to reduce existing concessions for property investors, including major changes to negative gearing for residential property.

• Extending the temporary ban on foreign purchases of established dwellings until 30 June 2029.

• An investment of $2 billion to help local governments and state utilities build infrastructure to support new housing.

Health

• Medicare Urgent Care Clinics will receive additional funding to ease the pressure on GPs and hospitals.

• Funds are allocated to list new medicines on the Pharmaceutical Benefits Scheme, including treatments for cystic fibrosis, kidney disease and various cancers.

• An additional $25 billion in funding for public hospitals.

• Reforms to the NDIS are expected to save $37.8 billion over the next four years. The scheme will be more focused on those with permanent and severe disabilities.

• Private health insurance subsidies for Australians over 65 are being cut, with savings being used to fund aged care and dementia care units.

Defence

• The defence budget will be increased by $53 billion over the next ten years.

Fuel

• A $14.8 billion package will be used to help Australia strengthen fuel supply.

• A reduction in the fuel excise and heavy vehicle road user charge will continue to apply for three months from 1 April 2026.

Trusts

• The Government has announced that a minimum 30% tax rate will apply to distributions made by discretionary trusts.

In Summary

Economically, Australia continues to face global uncertainty, with inflationary pressures and international market volatility impacting growth forecasts and household confidence.

Importantly, unless otherwise noted, the measures announced in the Budget are proposals only at this stage. The legislation required to implement many of these initiatives has not yet been passed, and details may change as measures progress through Parliament.

As always, our team is on hand to answer any questions you may have regarding the Federal Budget and how these proposed changes may impact you or your business.

Get in Touch

To discuss the proposed Budget measures and how they may affect your financial position, investments or business structure, contact the team at Shakespeare Financial Group at info@shakes.com.au or Phone (08) 9321 2111.