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Who Came Out On Top in the 2026-2027 Budget?

Who Came Out On Top in the 2026-2027 Budget?

Top 5 Biggest Impacts from the Budget:

A new 30% tax floor for family trusts to stop “income splitting,” plus a 40% tax rate on super balances over $10 million.

Negative gearing is now for new builds only. The 50% CGT discount is gone, replaced by an inflation-tracking model and a 30% minimum tax.

The $20,000 instant asset write-off is now permanent, and businesses can use recent losses to get tax refunds on past profits.

13 million Aussies get a new $250 tax offset (WATO), plus a $1,000 “no-receipts-needed” deduction for work expenses.

Tech and innovation offsets jump to 50%, but small claims (under $50k) now need a professional research partner to qualify.

Winners

Small Businesses & Innovation

  • The $20,000 write-off for businesses under $10 million turnover is now permanent from July 2026. 
  • The five-year re-entry rule for the simplified depreciation regime remains suspended until 30 June 2027, allowing small businesses to opt back in sooner.
  • Companies (up to $1B turnover) can use current losses to claim refunds on tax paid in the last two years.
  • From July 2028, small start-ups with turnover under $10 million can convert tax losses from their first two years into a refundable tax offset, capped at the value of FBT and PAYG withholding paid on employee wages.
  • From July 2027, SMEs can pay PAYG instalments monthly via their accounting software.
  • There’s also $8.2M for debt and mental health helplines.
  • The offset for core projects will rise from 25% to 50%, with the intensity threshold reduced from 2% to 1.5%.
  • Growing firms will also benefit from the refundable offset turnover threshold increasing to $50 million, and the expenditure cap lifting from $150 million to $200 million.
  • Small claims under $50,000 must now work with registered research organisations.
  • The asset size limit for investee businesses will be increased to $480 million for Venture Capital Limited Partnerships (VCLPs) and $80 million for Early Stage Venture Capital Limited Partnerships (ESVCLPs).
  • $136.1 million to upgrade Australian business registers over two years, which includes linking Director IDs to the Companies Register and upgrading ABN authentication to protect businesses from fraud.
  • Business compliance costs will be cut by $10.2 billion a year, including scrapping fees of up to $1,600 for mandatory construction standards, simpler electronic record-keeping, and streamlined climate reporting.

Workers

  • Over 13 million working Australians will receive a new $250 annual tax offset starting from the 2027–28 income year. This offset effectively increases the tax-free threshold by nearly $1,800 to $19,985 (or up to $24,985 for workers eligible for the Low Income Tax Offset).
  • It will also be available to sole traders running their own businesses.
  • From 2026–27, workers can claim an instant $1,000 deduction for work-related expenses without receipts, saving the average worker $205 and reducing tax-time paperwork.
  • From 1 July 2026, the 16% tax rate for income between $18,201 to $45,000 will fall to 15%, then to 14% from 1 July 2027.
  • Workers earning over $45,000 will also receive tax cuts of about $5 a week from 1 July.

Taxpayers & Low-Income Earners

  • The low-income threshold for the Medicare levy will jump by 2.9% from July 2025.
  • This means over a million lower-income Aussies will dodge the levy entirely or pay a reduced rate.
  • From FY2027–28, the Low Income Superannuation Tax Offset (LISTO) will increase from $500 to $810, reflecting the 12% super guarantee rate.
  • The eligibility threshold will also rise from $37,000 to $45,000.
  • Social Services will receive $1.7 billion over two years to hire and support more frontline Centrelink staff and improve service delivery.

Recipients of the Age Pension or JobSeeker are exempt from the new 30% minimum CGT rate in the financial year they realise a capital gain.

Transport

  • Fuel excise has been halved for three months, reducing petrol and diesel excise by 32 cents per litre and saving drivers around $23 on a 65-litre tank.
  • The heavy vehicle road user charge has also been reduced to zero for the same period.
  • Eligible EVs under $75,000 will keep the full 100% FBT exemption until April 2029, before moving to a permanent 25% FBT discount for eligible EVs below the luxury car tax threshold.

First Home Buyers & Homeowners

  • Your main residence is completely safe. It remains explicitly exempt from capital gains tax, completely untouched by the new CGT changes.
  • The temporary ban on foreign investors buying established homes has been extended until mid-2029 to ease housing market pressure.
  • $2 billion over four years will fund power, roads and drains to unlock 65,000 new homes, plus $105.9 million for an AI tool to speed up environmental approvals.

Families

  • Paid parental leave will permanently expand to six months by July 2026, leaving families up to $14,000 better off.
  • $2 billion will be invested to establish the Thriving Kids program, supporting children with autism and other neurodevelopmental conditions.

Women

  • Funding includes $182.6 million for child support reform, $61.2 million for 500 frontline domestic violence workers, $11.7 million for family law protections, and $16.6 million for an inquiry into military sexual violence.
  • Coerced directorship protections will also be strengthened by linking Director IDs with ASIC and hiding personal addresses.
  • Medicare subsidies will expand for LARC treatments through midwives, and cervical cancer treatments such as Keytruda will be subsidised through the PBS.
  • Funding will also support maternal health, stillbirth prevention, $10.8 million for CALD women’s healthcare access, and $277.5 million for mental health and suicide prevention.
  • $59.4 million will support community housing providers helping young homeless people, with girls and young women making up 66% of clients aged 16 to 24.

A further $27 million will protect migrant women from workplace exploitation.

Health & Aged Care

  • A record $25 billion over five years will go to public hospitals, plus $1.8 billion to keep 137 Medicare Urgent Care Clinics open long-term.
  • An $11.4 billion investment will boost bulk-billing incentives, aiming for 90% of GP services to be bulk-billed by 2030.
  • $5.9 billion will fund new PBS listings, reduce the maximum general co-payment to $25, and freeze the concessional rate at $7.70 until 2030.
  • COVID-19 oral antivirals will also be permanently subsidised through the PBS.

Public dental services for adults will receive permanent funding through a $431 million investment.

  • 5,000 extra residential aged care beds each year and $1 billion to reverse cuts to in-home aged care.
  • Eligible Australians aged 75+ and Indigenous Australians aged 60+ will also receive the RSV vaccine Arexvy for free.

Defence

  • Defence spending will increase by $53 billion over the next decade, including $14 billion over the next four years.
  • Major defence projects will be supported, including AUKUS nuclear-powered submarines, long-range strike missiles, drones, and counter-drone technology.
  • Following the Bondi Beach attack, $604 million will be invested to combat hate speech, violent extremism and terrorism, including $43 million for mental health support, $102 million for Jewish community security, $69 million for AFP national security investigations, and $25 million for firearm import controls.

Miscellaneous

  • The DGR process will be simplified by removing the ministerial declaration requirement.
  • Several organisations and Jewish community funds have also been granted DGR status following the Bondi attack.
  • $2.5 billion over five years will be allocated for natural disaster recovery, plus $6 million to develop AusAlert, a national high-speed emergency messaging service, with extra support for Australia’s aerial firefighting fleet.

$405 million will be allocated to Commonwealth sports programs, plus a $5.4 million tax break for elite players relocating to the new PNG Chiefs NRL team.

  • Gas giants dodged the proposed 25% export tax after heavy lobbying.
  • They must reserve 20% of LNG supply for the Australian market from July 2027, but avoiding the tax hit keeps them in the winners’ circle.

Victoria will receive an extra $3.8 billion for the Suburban Rail Loop, bringing total federal funding to $6 billion.

No change

  • The new 30% tax on discretionary trusts will not apply to fixed trusts, complying super funds, special disability trusts, deceased estates, or charitable trusts.
  • Existing tax rules remain unchanged for these structures.
  • Primary production income earned through trusts is fully exempt from the new minimum trust tax.
  • The permanent intake cap remains steady at 185,000 places, despite the shift towards highly skilled labour.
  • The budget remains in deficit, forecast at $31.5 billion for FY 2026/27.
  • A return to balance is not expected until FY 2034/35, with a true surplus not expected until 2036.

Losers

The Wealthy & High-Balance Superannuation

  • From July 2028, discretionary trust distributions will face a minimum 30% tax.
  • Bucket company distributions may be double-taxed, with no non-refundable tax credits for corporate beneficiaries. A 3-year roll-over relief will apply from July 2027
  • Earnings tax will rise to 30% for super balances between $3 million and $10 million, and 40% for balances above $10 million.

Property Investors & Landlords

  • Negative gearing will be limited to newly built homes.
  • For established properties bought after Budget Night, losses can only offset rental income or capital gains, with excess losses carried forward.
  • Established investment properties bought before 7:30 PM (AEST) on Budget Night, 12 May 2026, are fully grandfathered and can continue to be negatively geared until sold.
  • The new negative gearing restrictions only apply to residential property.
  • Commercial real estate and shares can still be negatively geared.
  • From July 2027, the 50% CGT discount will be replaced by inflation indexation and a minimum 30% tax on net capital gains, including pre-1985 assets.
  • Investors in new builds can choose between the 50% discount or the new indexation model.

Government, Public Servants & Consultants

  • Federal departments must find 5% annual savings, with limited extra wage funding and possible job cut concerns.
  • Consultant, labour hire and travel spending will be cut by $2.7 billion.
  • AGC will add 150 in-house consulting staff, while $760 million will be cut from the Economic Accelerator program.
  • Payments to veterans’ service providers will fall by $606.6 million over five years through better targeted services.
  • The Melbourne-to-Brisbane Inland Rail project has been cut back beyond Parkes, NSW, after major cost blowouts.

Green Industries & Renewable Programs

  • $1.3 billion in uncommitted funding will be withdrawn over the next decade from major green programs, including Hydrogen Headstart, Solar Sunshot and the Battery Breakthrough Initiative.
  • Hundreds of millions will be cut from the Hydrogen Headstart tax credit scheme due to weak demand, economic challenges and project collapses.
  • Uncommitted funding will also be clawed back from schemes including the Powering the Regions Fund and the National Water Grid Fund.

Health & Social Welfare

  • From April 2027, the age-based rebate uplift will be removed, costing over 3 million seniors an extra $226 to $255 a year.
  • The $3 billion saved over four years will fund 5,000 aged care beds and at-home care.
  • NDIS growth will be cut by $37.8 billion, with up to 160,000 participants moved to state-run programs by 2030.
  • Fraud crackdowns across Medicare, PBS and NDIA are expected to save over $820 million and target fraud costing up to $4.6 billion a year.

Travel & Migration

  • From 1 January next year, the Passenger Movement Charge will rise from $70 to $80, raising $755 million over five years.
  • The permanent migration cap stays at 185,000 places, with priority shifting to younger, highly skilled workers.
  • Family visa wait times may increase, while backpackers face a stricter Working Holiday Maker visa ballot.

More Resources

https://budget.gov.au/
https://www.abc.net.au/
CPA – Australian Federal Budget 2026-27
Afr-Budget 2026 winners and losers

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