The Federal budget themes for 2026-27 include reforms and policies across fuel supply, security, cost of living, productivity, taxes, care, opportunity, and investments.
Here, we have covered the measures the government will implement to support housing, taxes, investments, innovation, and compliance in the years ahead.
More affordable housing:
- The government is establishing a $2 billion local infrastructure fund that will support 65,000 homes over the decade.
- The reforms in housing will speed up approvals, make more land available for new homes, and modernise the National Construction Code.
- The Government is investing $59.4 million to help Community Housing Providers provide social housing to over 4,000 young people aged 16–24 who are at risk of, or experiencing, homelessness.
Compliance reforms:
- The financial sector’s compliance cost will be reduced by $780 million a year by progressing 14 legislative reforms.
- The financial regulators are taking 13 actions to streamline their data collection and reduce compliance costs.
Payroll tax administration:
The government will work with states to reform payroll tax administration
Tax reforms:
- The working Australian tax offset (WATO) provides an additional tax cut of up to $250 for working Australians, on top of tax cuts in the 2024-25 budget and two upcoming rounds announced in the 2025-26 budget.
- This is in addition to three tax cuts the government has legislated, and the $1000 instant tax deduction.
- From 1 July 2027, the 50% CGT discount will be replaced with an inflation-indexed cost base system alongside a minimum 30% tax on capital gains.
- From 1 July 2027, negative gearing will generally be limited to new builds to encourage additional housing supply.
- A minimum tax rate of 30% on discretionary trust income will be introduced from 1 July 2028.
- Rollover relief will be provided for three years from 1 July 2027 to assist small businesses and those who wish to restructure.
- From 2026-27, companies that make a loss in the current income year will be able to utilise that loss to get a refund against tax paid in the prior two income years.
Encouraging key investments:
- Investments in environmental initiatives, low-risk foreign investment, resources, and telecommunications will be accelerated.
- Spending more than $500 million to implement approval reforms that deploy AI, reduce duplication, and fund more bioregional plans and strategic assessments.
- Strengthening the investor Front Door to help nationally significant projects.
Start-up boost and innovations:
- From 2028-29, the small start-ups in their first two years of operation are eligible to get a refund for tax losses, up to the values of FBT and withholding tax paid on employee wages.
- Small businesses with a turnover of up to $10 million are eligible to immediately deduct assets costing less than $20,000.
- From 1 July 2027, the venture capital tax incentives will be expanded to align with modern company valuations.
- The offset for experimental core R and D will be increased by around 25 to 50 per cent, and the intensity threshold will reduce to 1.5 per cent.
- Turnover threshold for the higher, refundable offset is increased to $50 million.
Changes to Fringe Benefits Tax Support for Electric Vehicles
- 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 over $75,000 from 1 April 2027 and for all eligible electric cars from 1 April 2029.
- Electric cars costing up to $75,000 will continue to receive a full FBT exemption provided the fringe benefit arrangement commences before 1 April 2029.
The Federal budget also focuses on reforming the fuel supply, security, the cost of living, productivity, medical care, and employment opportunities, while supporting future mineral and infrastructure growth.
Source: Budget.gov.au | Budget 2026–27
Disclaimer: The measures mentioned are proposed budget announcements; they are not yet legislated and may change before implementation.
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