The budget is the government’s big yearly spending plan. It explains how the government will collect and spend money over the next year and beyond. The money is primarily collected through taxes and is distributed to pay for welfare, the defence force and other government responsibilities.
On Tuesday the government handed down its 2026-2027 Budget. It aims to help with rising living costs like rent, groceries and fuel without making inflation worse. It also seeks to ease the tax burden on working people and ‘level the playing field’ on housing for new home buyers.
Here’s five wins in the new federal budget that matter to SDA members:
INSTANT TAX DEDUCTION
From 1 July 2026, workers with less than $1,000 in work-related expenses will be able to claim an instant deduction, helping them keep more of what they earn. This means you won’t need to claim individual items.
WORKING AUSTRALIANS TAX OFFSET
From the 2027–28 tax year, workers who pay income tax on wages (not investments) will get a permanent $250 tax offset, helping put money back where it’s needed most.
NEGATIVE GEARING
New reforms to the housing market are designed to help 75,000 Australians buy their own home in the next 10 years. The government is reducing tax advantages that property investors get, especially for buying existing homes. It will reduce investor demand and make it easier for regular people, especially younger buyers, to get into the housing market.
From 1 July 2027, negative gearing for residential property will be limited to new builds. Negative gearing is used by landlords to pay less income tax by deducting the financial losses from renting out a property (such as when interest payments and other costs are higher than rental income).
CAPITAL GAINS TAX DISCOUNT
From 2027, instead of getting an automatic 50% tax discount when they sell, investors will pay a minimum 30% tax on their profit, adjusted for inflation. This gives more opportunities to get a house for first time home buyers and not investors.
CRACKING DOWN ON DISCRETIONARY TRUSTS
In two years, family and small business trusts in Australia will be paying taxes in line with ordinary wage earners. These discretionary trusts will be taxed at 30 per cent. Now, everyone will pay their fair share to fund essential services.
Intergenerational fairness is a great focus for this year’s Federal Budget.
SDA’s housing survey highlighted the challenges young workers face trying to get ahead. We also successfully campaigned to abolish junior rates for young adults and are campaigning for super for under 18s.
That includes removing junior rates so young workers are paid properly, continuing super for under 18s so they build savings earlier, and using tools like housing surveys to better understand and address affordability pressures. Together, these changes aim to give younger workers a fairer start and a more secure future.