Budget 2026 live updates: Coalition pledges to repeal Chalmers’ tax reforms amid mixed reception for ‘difficult’ budget

From 28m agoCoalition pledges to repeal changes to capital gains tax and negative gearing

The Coalition said last night it would repeal changes to capital gains tax and negative gearing if elected as it tried to hit back at Labor’s budget measures.

The shadow treasurer, Tim Wilson, told Sky News the prime minister promised not to touch the incentives during last year’s election campaign and that therefore Labor did not have a mandate for the reforms.

Wilson said:

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We’ll repeal these measures if necessary, but our objective is to defeat them and to make sure that they’re never legislated. Because this government doesn’t have licence from the Australian community [to] support these changes.

Wilson also says the $250 tax offset for workers will be eaten up within six months due to inflation. That offset will be given to workers after next year – so it’s still a while away.

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We’ll repeal these measures if necessary, but our objective is to defeat them and to make sure that they’re never legislated. Because this government doesn’t have licence from the Australian community [to] support these changes.\n","elementId":"839cbf29-6877-488c-aa4f-2671bb627f50"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Wilson also says the $250 tax offset for workers will be eaten up within six months due to inflation. That offset will be given to workers after next year – so it’s still a while away.","elementId":"21d50ac5-3397-41d2-9135-84a3671f935b"}],"attributes":{"pinned":true,"keyEvent":true,"summary":false},"blockCreatedOn":1778617214000,"blockCreatedOnDisplay":"22.20 CEST","blockLastUpdated":1778618482000,"blockLastUpdatedDisplay":"22.41 CEST","blockFirstPublished":1778618077000,"blockFirstPublishedDisplay":"22.34 CEST","blockFirstPublishedDisplayNoTimezone":"22.34","title":"Coalition pledges to repeal changes to capital gains tax and negative gearing","contributors":[],"primaryDateLine":"Tue 12 May 2026 23.03 CEST","secondaryDateLine":"First published on Tue 12 May 2026 22.20 CEST"},{"id":"679b43ab8f08d7cb6f3007fa","elements":[{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Good morning and welcome to our live news blog. I’m Martin Farrer with the top overnight stories and then it will be Krishani Dhanji with the main action.","elementId":"c9cf9aa7-ad04-409e-81b7-456f25d4cbce"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

There’s already plenty of reaction today after Jim Chalmers delivered his fifth budget as treasurer last night. Interest groups are lining up to give their verdict on their particular slice of the financial pie, welcoming some parts and criticising the lack of action on others.","elementId":"e9b2364f-635f-4484-86b4-17bdc6626858"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

And the shadow treasurer, Tim Wilson, has plainly put out the Coalition’s position on the biggest changes: to capital gains tax and negative gearing, which the government claims will help to redress intergenerational equity. He says they will try to block the changes, or repeal them when next in power.","elementId":"bc9ca112-20c0-4f60-9525-90e72587178c"},{"_type":"model.dotcomrendering.pageElements.TextBlockElement","html":"

Much more to come …","elementId":"0ca39dff-5b62-40c2-8f40-7b282a621d5d"}],"attributes":{"pinned":false,"keyEvent":true,"summary":false},"blockCreatedOn":1778617214000,"blockCreatedOnDisplay":"22.20 CEST","blockLastUpdated":1778617140000,"blockLastUpdatedDisplay":"22.19 CEST","blockFirstPublished":1778617214000,"blockFirstPublishedDisplay":"22.20 CEST","blockFirstPublishedDisplayNoTimezone":"22.20","title":"Welcome","contributors":[],"primaryDateLine":"Tue 12 May 2026 23.03 CEST","secondaryDateLine":"First published on Tue 12 May 2026 22.20 CEST"}],"filterKeyEvents":false,"id":"key-events-carousel-mobile","renderingTarget":"Web","serverTime":1778619837179}">

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Coalition pledges to repeal changes to capital gains tax and negative gearing

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‘These changes are contentious’ says Chalmers

You might say Bill Shorten walked so Jim Chalmers and Anthony Albanese could run. The pair unveiled major changes last night to negative gearing and capital gains tax, a feat that lost Shorten the 2016 and 2019 budget (the latter that everyone expected him to win).

So how different is the politics of it this time?

Chalmers begins his day on the ABC’s Radio National Breakfast, and says that it’s now the right thing to do. Of course the problem isn’t a new one, it’s one that younger people have been battling for years now (hence why Shorten wanted to fix it a decade ago).

Chalmers tell RN:

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These changes are contentious. There’s no use pretending otherwise, but it’s the right thing to do. The easiest thing that we could have done from a political point of view would be to see these challenges in the housing market, particularly for young people, and to see the issues in the tax system and to leave everything exactly as it was. And we didn’t think that was an acceptable outcome.

Chalmers says that the budget – which also includes a $250 tax offset for working Australians come tax time in 2028 – is moving to rely less on income tax and better deal with bracket creep.

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One of the issues in the tax system is that it’s become out of whack. And so that new Working Australians tax offset … It’s effectively lifted the tax-free threshold for workers, but not for others. And that does give us the architecture, I think. In the future, when successive governments can afford to return more bracket creep, it’s another way that we can do that.

Krishani Dhanji

Good morning, Krishani Dhanji here with you for the budget washup. Thanks to Martin Farrer for getting us started.

While I feel like I’ve had a quick turnaround from last night, the prime minister and treasurer are undoubtedly on less sleep, having already begun to do media interviews this morning.

Anthony Albanese and Jim Chalmers are on the budget sell (which you can read all about here and here), doing a range of TV interviews from the prime minister’s courtyard at Parliament House and some radio interviews too.

There has been some political backlash to the changes to negative gearing and capital gains tax but the government has also received a fair bit of applause from economists and others for the bold reforms, and we’ll be seeing plenty more reaction to it today.

It’s going to be a hectic and several coffee day so let’s get cracking.

Australian Medical Association gives mixed verdict to budget

The Australian Medical Association has praised the budget for locking in “much-needed” additional funding for public hospitals but said there was “little else” in the budget to address the critical issues facing Australia’s health system.

The AMA president, Dr Danielle McMullen, said the additional $25bn for the next national health reform agreement was very welcome but it left a funding gap, and other opportunities to tackle healthcare system problems had been missed.

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Our modelling shows a remaining gap of at least $9.6bn – a gap that must be bridged if the cycle of crisis our public hospitals are in is to be broken.

We are also pleased to see $120.9m set aside to support the role of general practice in the early identification of children with development delay or neurodevelopmental difference through a Medicare funded three-year-old health assessment and expanded Comprehensive Health Assessment Program. It will be critical for all governments to ensure that appropriate support for eligible children is available on GP referral.

But McMullen said the budget provides little else to celebrate.

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While we welcome a commitment to undertake consultation on private health reform, cuts to the private health insurance rebate for people who are 65 years and over are likely to see older Australians on modest incomes drop or downgrade their cover and this may put more pressure on the public hospital system.

Government deserves credit for spending political capital on reform says CEDA

Last night’s budget contained a warning that Australia could be thrown into recession if the Middle East crisis continues and the price of oil doesn’t fall back to pre-war levels.

Against this difficult background, the Committee for Economic Development of Australia (CEDA) says the budget makes good progres towards reform by delivering modest savings, and support for households and businesses partially offsetting higher revenue from commodity prices, inflation and a still strong labour market.

It also applauded measures to address housing supply, productivity growth, tax reform, cost of living and intergenerational fairness as “welcome steps towards a stronger, more resilient economy and social compact, but will require more targeted and stronger attention into the future”.

The CEDA’s chief executive, Melinda Cilento, said.

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This was a genuinely difficult budget to calibrate and it contains many moving parts.

While higher commodity prices have boosted national income, the cost of living is biting, inflation remains too high and the global outlook remains highly uncertain. A government willing to spend political capital on productivity, housing, tax reform and intergenerational fairness deserves credit.

Climate Council says budget gives ‘free kick’ to fossil fuel companies

The Climate Council came out of the blocks quickly to decry a “massive free kick” in the budget for fossil fuel multinationals while consumers are “left exposed” to global energy price spikes and climate harm.

The council said last night that by maintaining more than $19bn in annual fossil fuel subsidies and foregone gas tax revenue, the budget ignored “major opportunities to expand clean energy solutions that shield Australians from global fossil fuel chaos”.

YouGov polling showed most Australians want the government to invest in expanding renewable energy solutions over fossil fuels to secure our energy future, the council claimed.

The Climate Council chief executive, Amanda McKenzie, said:

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This budget maintains the $19bn gravy train for big fossil fuel corporations. That is $19bn in the wrong direction, keeping us tied to foreign oil rather than supporting the expansion of renewable energy solutions that Australians want to deliver a safer, cleaner, more secure energy future. Coalition pledges to repeal changes to capital gains tax and negative gearing

The Coalition said last night it would repeal changes to capital gains tax and negative gearing if elected as it tried to hit back at Labor’s budget measures.

The shadow treasurer, Tim Wilson, told Sky News the prime minister promised not to touch the incentives during last year’s election campaign and that therefore Labor did not have a mandate for the reforms.

Wilson said:

double quotation mark

We’ll repeal these measures if necessary, but our objective is to defeat them and to make sure that they’re never legislated. Because this government doesn’t have licence from the Australian community [to] support these changes.

Wilson also says the $250 tax offset for workers will be eaten up within six months due to inflation. That offset will be given to workers after next year – so it’s still a while away.Welcome

Good morning and welcome to our live news blog. I’m Martin Farrer with the top overnight stories and then it will be Krishani Dhanji with the main action.

There’s already plenty of reaction today after Jim Chalmers delivered his fifth budget as treasurer last night. Interest groups are lining up to give their verdict on their particular slice of the financial pie, welcoming some parts and criticising the lack of action on others.

And the shadow treasurer, Tim Wilson, has plainly put out the Coalition’s position on the biggest changes: to capital gains tax and negative gearing, which the government claims will help to redress intergenerational equity. He says they will try to block the changes, or repeal them when next in power.

Much more to come …