On Tuesday 12 May 2026, the federal government led by Prime Minister Anthony Albanese and Treasurer Jim Chalmers handed down a budget which was by far the most controversial in at least a decade, proposing a significant amount of tax reform. The budget was clearly headlined by one key thematic – to help young Australians get into the housing market.
It should be noted that this budget was handed down almost a year to the date since the ALP was overwhelmingly re-elected in May 2025, and essentially 2 years prior to the next election in May 2028. If there was a budget to break election promises and propose major tax reform, this was the one. The 2025 election results also highlighted that young voters were losing interest in the major political parties, something which both the ALP and Liberals will be keen to fix before 2028. Fast forward to now and current media polling is showing this loss of interest has spread beyond young voters given the surge of support for One Nation as well.
Rather than delving into the weeds of all the major reform which has been put forward, the purpose of this opinion piece is to really address one major question – are young people really better off under this budget? And naturally if you’re the ALP, is this budget going to get you more votes come election time in May 2028? Introducing major tax reform in this budget allows the ALP the opportunity spend more come the pre-election budget – something they are very good at if this budget is anything to by and something which they can use to get young people on side even more… maybe.
Let’s look at the wins for young people and there are some to be fair to the ALP:
- Working Australian’s are getting back $250 in 2028. Not even a third of the amount that Kevin Rudd handed out during the Global Financial Crisis in 2008/09 (minimum of $950) or that Scott Morrison handed out during the COVID pandemic in 2020 (minimum $750) but everyone loves a bit of free money don’t they… even if they have to wait another 2 years for it.
- The changes to the CGT rules and negative gearing are designed to slow the housing market’s growth, thereby giving younger Australian’s a better chance of getting into the housing market in the future. To be clear here, I actually think this ideology is wonderful at a high level – as a father of two young girls, their ability to buy a home one day is something I am already worrying about so giving them a better chance to access the property market is a tick for me. The problem here is rather than doubling down, cutting spending elsewhere and really helping younger people get into the market, the monies raised from the CGT and negative gearing changes are going elsewhere in this budget.
While I am looking at wins, I can’t help but feel there is a likelihood of further tax cuts for low and middle income earners in the lead up to the next election. Naturally I am looking into my crystal ball a little bit given the lowest income tax rate is still to drop from 16% to 14% in the coming years (a change that is already legislated), I can’t help to think there is more to come in the next 2 budgets. A reduction in the next bracket (30%) maybe? As I say, crystal ball stuff but let’s see.
So, there are the major wins I see for young people from this budget. Both changes designed to win over young voters but is this really a win for them? I think not. And here’s why:
- It doesn’t support small businesses. If there is one thing which really fires me up about this budget, this is it. Australia runs off the back of small business. Rather than encouraging and supporting them, this budget targets them. As Australians, I think its fair to say we love to back the underdog – back in the ones wanting to have a crack. Small business owners take on a lot of risk, employ other Australians and invest their blood sweat and tears – long hours, weekend work, time away from family and so on. If after doing all the hard work things actually come off, this budget imposes a minimum 30% tax on any business sale one day, potentially up to 47%. Cue all the social media posts doing the rounds at the moment. Second to this, it removes all the asset protection mechanisms they have today if they are structured correctly via Trust structures. Fairly harsh indeed if you ask me. What does this mean for aspirational, entrepreneurial young Australians..? It means starting their own business just became a lot riskier and less rewarding if it ends up being a success.
- Do the changes put forward to help young people actually disadvantage property investments, or at least make them less attractive? Those investors already in the property market continue to benefit from negative gearing and strong growth up until this point but new entrants face a completely different environment. This includes forecast lower capital growth and already high costs (think the new emergency services levy as an example). If the property happens to be your first home then yes, forecast lower growth may make it easier to get into the market but what happens when you want to buy the next home, a family home for example? Lower growth and therefore build up of equity makes this more difficult so the first home may end up becoming a bit of a trap or result in you turning the property into an investment property instead (the joy of land tax now added in).
- Higher government spending leads to higher national debt, higher inflation and subsequently higher interest rates. Houses may be cheaper but interest rates won’t, therefore limiting how much can actually be spent due to the way banks evaluate your serviceability metrics. In short, higher interest means banks will lend people less. This means it is a real possibility that young people are actually in a worse position than they are today in terms of actually borrowing to buy their first home!
- To extend on the above point, more control around government spending would also help to reduce the amount of debt we have as a country. This debt needs to be paid back at some point – likely by the young generation and their kids, not the baby boomers who are retired or almost there. Responsible government spending now means lower debt and a future ability to do things such as re-looking at the income tax rates for low and middle income earners – higher government spending likely means the opposite.
- One thing which wasn’t touched in this budget was superannuation which remains a very attractive investment vehicle. Rather than paying CGT rates of 30% minimum, CGT within superannuation ranges from 0-15% for most Australians. This works out brilliantly well for those who are retired or close to, given them a clear and logical spot to invest leading up to retirement. While the younger generation can also use superannuation as a tax effective investment tool, it’s fair to say this is not quite as attractive when you are still 20-40 years away from being able to access it – particularly given the government’s ability to change the rules between now and then.
While I don’t propose to have all the solutions, government spending is a clear problem here. The NDIS system is broken and while fixing this will certainly help, its not the silver bullet. Rather than punishing small businesses and those taking risks to get ahead, we need to find another way. Given the ALP seems hellbent on doing this by targeting the traditional Liberal base of wealthy Australians, why not just increase GST instead? It’s a consumption tax which punishes those who spend, could this not have been a solution? I am not categorically saying this is the answer – I guess what I am saying is I don’t like what has been put forward so perhaps other options could have been explored further.
All in all, the good news for the ALP – they have another 2 years to fix this problem. If they can fix the NDIS issues as the budget promises, this will go a long way to reducing current debt levels and provide more scope for them to help younger Australians. I certainly hope this becomes a reality but in all honesty, I will eat my words if that happens. What I will say with certainty is this – the budget handed down isn’t about fairness or helping younger Australians. It’s about increasing the tax take so the ALP government can spend more now. It’s a clear bluff and nothing more.