Australian Federal Budget Report 2026-27

The 2026-27 Australian Federal Budget projects a $28.3bn deficit in FY2026, supported by high commodity prices, while introducing major long-term reforms to the NDIS and property taxation.

Key Takeaways

• 1.The FY2026 underlying cash deficit is forecast at $28.3bn (1.0% of GDP), an $8.5bn improvement from December estimates due to higher commodity prices.
• 2.The government is implementing significant structural reforms to CGT, negative gearing, and discretionary trusts to boost housing supply and equity.
• 3.Large savings from NDIS reforms are heavily back-loaded, expected to reach 0.7% of GDP by FY2037, while near-term fiscal impulse remains expansionary.

Table of Contents

• Key points
• 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
• Challenges, but coming from a position of strength
• Labour market unperturbed
• ECONOMIC FORECASTS

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