What to expect ahead of Federal Budget being handed down

Tomorrow, the Government will hand down the 2026-27 Federal Budget.

In simple terms, the budget details how much money the Government expects to bring in, and where it plans to spend it, over the next financial year.

In this budget, it’s been widely rumoured the Government will announce changes to the capital gains tax discount and to negative gearing.

Here’s your guide.

Key terms

The difference between the amount the Government brings in via taxes, and the amount it spends, will determine if the budget is in surplus or deficit.

A surplus is when the Government has collected more money than it is spending. It’s what happens when the Government has leftover money after allocating funds to each of its projects.

A deficit is when the Government wants to spend more money than it has collected in taxes. This means it needs to borrow money, which puts the Government in more debt.

What to expect

It’s been widely reported that in this budget, the Government will make changes to the capital gains tax discount, negative gearing, and trusts.

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The capital gains tax applies to the profit from the sale of an investment asset. At the moment, if you’ve held an investment asset for more than 12 months, you only get taxed on half the profit from selling it (what you gain from selling your capital, hence it being called the ‘capital gains tax discount’).

Negative gearing is when a landlord spends more on an investment property than they make from rent. That loss can be deducted from the owner’s taxable income, meaning they pay less tax overall.

A trust is an arrangement where a person or organisation holds a group of assets and property for someone else’s benefit.

It’s understood the Government will announce changes to how all three of these things are taxed.

Lockup

TDA journos will be in Parliament House for Budget ‘lockup’, where media gets to preview the details but cannot publish them. Here’s what will happen:

1.30pm – Hundreds of journalists (including from TDA) hand their phones to Parliamentary staff and disconnect their computers from the internet.

For the next six hours, they read over the Budget papers and prepare content.

7.30pm – The Treasurer gives a speech in Parliament outlining the Budget to the public. Journalists can press publish.