Australian Federal Budget 2026-27

The 2026-27 Australian Federal Budget projects a FY2026 deficit of $28.3bn, benefiting from commodity windfalls while introducing major back-loaded reforms to NDIS and property taxation. Despite these long-term savings, the near-term fiscal stance remains slightly expansionary.

Key Takeaways

• 1.The budget forecasts an underlying cash deficit of $28.3bn in FY2026 (1.0% of GDP), which is an improvement from previous December forecasts due to commodity price windfalls.
• 2.Significant structural tax reforms are introduced, including changes to Capital Gains Tax (CGT), negative gearing, and a minimum tax on discretionary trusts.
• 3.Major NDIS savings measures are introduced, projected to reduce growth in payments by $37.8bn over four years, though impacts are heavily back-loaded.

Table of Contents

• The Numbers
• A tale of two horizons
• Stronger starting point
• Back-loaded savings measures
• Debt lower, interest unchanged
• Uncertainties
• Fiscal impulse remains slightly expansionary
• The Themes
• Budget delivers downpayment on reform agenda
• Swathe of reforms adds up to material total
• Do the measures take pressure off demand?
• The Key Policy Initiatives
• The Economy
• Economic Forecasts

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