Government promises $780m in financial sector redtape reduction
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More news: The federal government is promising to reduce the regulatory burden on the financial sector by $780 million a year through a raft of measures.
The changes include increasing monetary thresholds for some large companies, improving the efficiency of climate-related financial disclosures and increasing the cap on banks’ covered bond issuance.
The proposed changes are among 14 legislative reform changes, which will see business communications modernised through electronic recordkeeping and communication with ASIC, and the extension of technology neutrality reforms to the Australian Small Business and Family Enterprise Ombudsman.
In the long run, the government is expecting the National Competition Policy to be advanced with state and territory governments to deliver a GDP boost of $13 billion a year.
Chalmers confirms CGT, negative gearing reforms as budget deficit hits $28.3b
The news: Treasurer Jim Chalmers has delivered his fifth budget, featuring what he characterised as the most significant tax reforms in “a quarter of a century”. Negative gearing will be scrapped for existing investment properties, the capital gains tax regime will be overhauled, and family trusts will face a minimum tax level.
To support with the cost of living, the government is also instituting a $250 annual tax offset for working Australians, on top of the promised $1,000 instant tax deduction, reductions in the lowest tax bracket and the ongoing halving of the fuel excise and heavy vehicle road user charge.
Forecast savings on the National Disability Insurance Scheme worth $36.22 billion between FY26 and FY30 have also been confirmed.
The government further doubled down on its response to the global oil shock, with a $10 billion investment to be committed to immediate fuel supplies and a permanent Australian Fuel Security Reserve.
The numbers: The underlying budget deficit for 2025-26 is forecast to be $28.3 billion or 1% of GDP while the headline deficit is forecast to be $47.9 billion or 1.6% of GDP
The underlying budget deficit for 2026-27 is forecast to be $31.5 billion or 1% of GDP while the headline deficit is forecast to be $64.1 billion or 2.1% of GDP.
Over the forward estimates, between 2025-26 and 2029-30, the underlying and headline deficits are expected to collectively total $150.53 billion and $264.53 billion respectively.
The changes to the CGT and negative gearing are expected to generate savings worth $3.53 billion of savings over that period while changes to the taxation of family trusts will generate $4.4 billion.
The Working Australians Tax Offset will come into effect from income tax year 2028-29 and will cost $6.38 billion over the forward estimates.
Meanwhile, the instant tax deduction, provisioned for in the mid-year updated is expected to cost about $2.22 billion over the four years from 2025-26.
The fuel excise and road user charge relief will cost $2.55 billion in the three months from 1 April 2026. It is unclear whether this will be extended, with the government previously saying a decision would be made nearer to the time.
The context: As reported ahead of the budget, the federal government has scrapped the 50% capital gains tax discount and returned to a system in which taxable gains are indexed to inflation at the ordinary income tax rate for assets held before 1 July 2027.
A minimum 30% tax floor on indexed capital gains will also be introduced from 1 July 2027, which the government says will better align tax on capital with the marginal tax rate faced by those earning an average income from wages, between $45,000 and $135,000.
Negative gearing for residential properties will be restricted to new builds from 1 July 2027.
A 30% minimum tax will be introduced on taxable income received through family trusts from 1 July 2028 to help fund the tax offset for working people and improve the fairness of the tax system.
The instant asset write off will become permanent from the 2026-27 tax year onwards, delivering on a promise made at the 2025 election.
What they said: Chalmers said in his budget speech that the reforms make the “tax system fairer and stronger for workers, businesses, first home buyers and future generations”.
He later added that the government is “delivering another round of ongoing tax cuts for Australian workers”.
“We will put more money into the pockets of 13.3 million workers with a new $250 Working Australians Tax Offset… This offset is targeted to workers and represents the most meaningful, permanent increase to the effective tax-free threshold since Labor last increased it more than a decade ago,” he said.
“Altogether our five different tax cuts will benefit the average worker by up to $2,816 in 2028.”
The sources: 2026-27 Budget papers, Treasurer Jim Chalmers budget speech
