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

Jim Chalmers said it is not unfair for people to point out that Labor’s position on CGT and negative gearing has changed.

“We thought we could do enough in the housing market to focus overwhelmingly on supply and the 5 per deposits,” Dr Chalmers said.

“We needed to take on this status quo and make some difficult changes.

“I think the worst thing to do, the easier thing to do, would be to leave things as they are and understand that the longer we leave things, the worse they get.

“It is my view, increasingly my view, there is a growing sense, an accelerating sense in our society and societies like ours around the world, that there is a huge risk of people feeling disconnected and disregarded when it comes to our economy.

“In my view, the prospect of more people losing hope or more people losing connection is a problem which transcends all of others.”

Dr Chalmers was pressed of if 75,000 extra Australians getting into the housing market over 10 years is enough, or if this is just an opportunity for ideological change.

“It’s worth it for 75,000 Australians who wouldn’t otherwise get a look in in the housing market if we hadn’t taken the difficult decision we announced last night,” Dr Chalmers told The Nightly in Canberra.

The Treasurer said the status quo in the housing market and the tax system is busted, saying that the point where those two intersect creates intergenerational inequity.

“It would have been the easiest thing in the world to see that problem, to recognise that the longer we leave it, the worse it gets, and leave it unattended. That is why we took the difficult decision that we took and announced last night,” he added.

“I’d rather do the right thing by those 75,000 people and explain why a change in policy was necessary and explain that, than to leave this problem for someone else to fix down the track.

“Too many Australians, particularly young Australians, are locked out of the housing market. It requires government policy to rectify that.”

Treasurer Jim Chalmers says that Labor is confident it will meet the ambitious housing goal of building 1.2 million homes in the next few years, but there is “more to do”.

“If you think about recent developments in the housing market… when it comes to dwelling commencements, we saw commencements go up by 26 per cent last year, that’s progress,” Dr Chalmers said.

“Approvals through to March of this year were 13.1 per cent, they were falling 21.6 per cent when we came to office.

“Similar story for investment and in some of the other categories.

“We know there is heaps more to do.”

Pressed on if the Budget would push inflation, as pre-warned by the RBA,” Dr Chalmers defended his fifth Budget.

“Overall, if you look at the Budget papers and the advice we received from Treasury colleagues.... What it says is that the Budget is taking the pressure off inflation,” he said.

“We took the task of responsible economic management very seriously.”

Dr Chamers said he would not give “free advice” to the independent RBA, but said, looking at what was handed down, the Albanese Government delivered a “historically responsible document”.

“The Budget we handed down last night... is historically responsible.”

“Towards the end of last year, we had a lot going for us,” Dr Chalmers said on Wednesday.

Referencing the Iran war, Dr Chalmers said Australia was now being punished.

“The oil shock that has come with that conflict is part of a bigger pattern of rolling, accelerating turbulence in the global economy. A half-century, bookmarked by oil shocks, where one big global disruption gives rise to the next.

“In the last two decades alone, a subprime mortgage crisis, a pandemic, global inflation spike triggered by war, trade tensions. Now a huge energy shock that is pushing up prices.”

Dr Chalmers said this was reason to go harder on reform.

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.