The Budget 2026 live updates: Jim Chalmers claims no election lies, Albanese says Labor changed its mind

Treasurer Jim Chalmers is delivering his post-Budget address in Canberra,

“We didn’t finally decide on negative gearing and capital gains and trusts over the summer, though we did agree that to deliver intergenerational fairness and to rebalance the system, there needed to be tax reform,” Dr Chalmers said.

“The war fundamentally reshaped the Budget forecasts.”

“Our position is we’re going to do everything we can to stop these bad taxes, toxic taxes, from getting through the parliament,” he told Sky News.

“This is a budget of broken promises and higher taxes and less houses and lower standard of living, and we don’t want these taxes to get through because they are a tax on aspiration, a war on aspiration. They’re not going to solve any intergenerational problem.”

He argued the government’s spending had failed to deliver more housing, while placing additional financial pressure on Australians.

“We’ve seen a reduction in the number of houses getting built in this country despite billions of dollars of expenditure... there’s no shortage of areas where this government is spending and shouldn’t be spending, but because it’s spending this money, it’s whacking Australians with more taxes... when the government runs out of money, it comes after yours. And that is exactly what’s going on here.

He went further, accusing Labor of creating division between younger and older Australians.

“Australians don’t want that kind of division. They don’t believe in it. We saw that during the Voice [to parliament referendum]. Labor thinks the answer to things is to divide Australians. Well, I think it’s to unite them,” he said.

Jim Chalmers is calling his fifth Budget the most important and ambitious in decades, amid global uncertainty.

The impact of the Middle East conflict is set to last, with inflation and unemployment going up, but the Treasurer says Australia will avoid a recession and must pursue reform.

He’s announced an expected, but controversial, overhaul of negative gearing and capital gains tax for housing.

And a surprise $250 tax hand-out for workers, but you won’t see the money until late next year.

KEY TAKEAWAYS FROM FEDERAL BUDGET

“Their migration targets, they’ve missed every single year, and they’re now saying 2 million migrants in the first two terms of their government, that I think should be a wake-up call for Australians, because, let’s face it, that excessive migration is causing problems with housing,” she told Sky on Wednesday.

“It’s causing problems in our healthcare system. It’s causing problems with our infrastructure, and it’s out of control.”

Budget figures show net overseas migration for this financial year has been revised up to 295,000, from a previous estimate of 260,000.

While migration is forecast to ease in coming years, next year’s intake is still expected to be 20,000 higher than earlier projections, with 245,000 now expected, up from 225,000.

The Coalition is preparing to announce a policy to cut migration numbers as it seeks to win back voters shifting towards One Nation.

Read more.

Treasurer Jim Chalmers’ fifth Budget will not lower inflation — one of its stated objectives — and could be followed by more interest rate rises, the Commonwealth Bank of Australia’s top economists said.

“Overall, the Budget is unlikely to shift the RBA’s near-term view on interest rates, but it does little to help in the fight against inflation,” wrote Luke Yeaman, Belinda Allen and Ashwin Clarke. “As it stands the risk sits with further tightening by the RBA.”

Australia’s largest bank said the Government’s decision to increase the Budget deficit next financial year, “when the fight against inflation will be hardest” by spending an extra $6.5 billion, makes the Budget “neutral-to-mildly expansionary”.

Because inflation is out of control, many economists would like governments to help slow price rises by reducing spending. Tuesday night’s Budget will widen the federal deficit by $3.2 billion through extra spending on hospitals, defence and other priorities, spending a windfall in taxes from higher gas prices.

Read more.

Pauline Hanson has labelled Jim Chalmers’ efforts a “Sheriff of Nottingham budget” that takes money away from people who worked hard.

“I’m talking people my age. We were the baby boomers. We didn’t have a lot. We had to go without. We have the second-hand furniture, second-hand clothes… we didn’t go to restaurants, and we didn’t have all this. Then we saved and we invested into wealth to create that wealth,” she said.

“All the government’s doing now is stripping that wealth and handing it to others.

“I see this as nothing but communism taking over and redistributing wealth.”

Asked whether she agreed with the government’s proposition that people who earned their money through wages were being taxed higher than those whose income came from assets, Senator Hanson let Barnaby Joyce answer for her.

He said people who bought capital assets had already been taxed once.

“I can choose to buy a new boat, to go on a trip, to go skiing, to go to the coast, or I can put the money aside so that my children have an easier life. That is my choice,” he said.

A very happy sounding Bill Shorten has told Radio Nation he feels vindicated after last night’s Budget adopted many of the tax measures he took to the 2016 and 2019 elections but lost.

“I think that we were probably ahead of our time, and I do think this is important for the nation,” said the former Labor leader, now University of Canberra vice-chancellor.

He said the fact Labor was now in government, combined with the shift in demographics and attitudes towards capital gains tax and negative gearing since 2019, gives him more confidence that the Government will successfully make the changes now.

“I think the great Australian dream of owning a home is a worthy one, and needs to be, that flame needs to be kept alive, not smothered under a tax system,” he said.

“The core of this whole story is a simple proposition… Why is it that a plumber, a nurse, a journalist, a lawyer, a teacher, a doctor, pay higher rates of tax when they go to work every day than someone who just sits on a pile of assets and just sells them down the track and gets taxpayers’ support in between?”

Sunrise host Nat Barr pointed out to the PM, via a letter from a viewer, that he has built his property portfolio using the benefits of the existing negative gearing conditions pre-Budget, and was now robbing other Australians of the same luxury.

“No, but they can invest in a new build though,’ Mr Albanese responded.

“What they’ll be doing is not just helping to build their own portfolio, they’ll be helping to build homes that other young people will be able to move into and rent and boost supply as well.

“So they’ll be able to do that in exactly the same way. They can even choose the old system of capital gains of a 50 per cent discount if they choose to do so.”

Co-host Michael Usher highlighted that the Australian property market is now hotter and harder than when Mr Albanese got in, adding that many politicians also used the old measures to build wealth.

“That’s the whole point of why we’re making this change. You’ve just said it’s a very different market. That’s the point,’ Mr Albanese said.

“We’re throwing everything at this to make a difference because it has got tougher.

“As time has gone on, it’s got tougher and tougher for young people to enter the housing market, which is why we’re making this change.”

Prime Minister Anthony Albanese says he is being “upfront” and Labor changing its mind on CGT and negative gearing, breaking election promises.

“This is a budget of reform and resilience,” Albanese told Sunrise.

“It is making sure that the Australian dream of buying a home isn’t out of reach.”

Mr Albanese said Labor will “own” the decision to change their mind.

“We have changed our position. I am upfront about that, and we will own that,” the Prime Minister said.

“The difference between negatively gearing a new home instead of an existing home… You are investing in Australia as well as your future wealth.

“We have changed our position on property issues because we want 75,000 additional young Australians to access their own home.

“What has changed is that increasingly we realised what we were doing wasn’t enough.

“If you have a negatively geared property, no change to your existing arrangements.

“We are also saying we are not going to sit back and just kick this can down the road again.”