It has modest sweeteners, in the form of tax cuts, electricity rebates, cheaper medicines and incentives to increase bulk billing.
The tax cuts are well-targeted and cost-of-living measures are not inflationary.
There is nothing in the budget which should stand in the way of more interest rate cuts.
The good:
- Those on the lowest incomes will benefit most from the new tax cuts.
- More people will have access to bulk-billed visits to the doctor and cheaper medicines.
- The budget predicts that the inflation rate will remain in the Reserve Bank's target range.
The bad:
- While there's funding for disasters caused by climate change, there is nothing to reduce emissions.
- There is nothing meaningful to ease the housing crisis.
- The budget does nothing to address growing inequality.
The ugly:
- Australia is unlikely to hit its emissions reduction targets and nothing in this budget will stop that.
- The free ride for gas companies continues, with revenue from the Petroleum Resource Rent Tax predicted to fall.
- There is nothing to prevent the ongoing environmental harm being caused by the salmon industry.
Who's cashing in?
- Those who earn between $18,200 and $45,000.
- People who go to the doctor often and buy a lot of PBS medicines.
- Beer drinkers, with a two-year pause on indexation increases on the draught beer excise.
- Gas companies, which are projected to pay less PRRT over the next 4 years.
- Wealthy people who use the superannuation system to avoid paying tax, with no change to super tax concessions.
- Wealthy people who use the tax system to speculate in the housing market, with no change negative gearing.
- Fossil fuel companies, who use a lot of diesel. The fuel tax credit, which is what the government pays to organisations like mining companies for the fuel they use in their vehicles, is growing. The government will be handing them $10.8 billion this year, rising to $13.1 billion in 2028-29.
Who misses out?
- The unemployed, who have to live on an income which is around 38 percent below the poverty line, as there was no increase in Jobseeker in the budget.
- The Maugean Skate, which – thanks to this budget – is a step closer to extinction. On a day the government rammed through legislation to protect multi-national salmon farmers polluting the skate's only home, the government allocated $2.4 million for a skate breeding program, over 2026/27 and 20-27/28. The skate could be extinct by then.
- The environment. The Treasurer did not mention climate change once in his speech. He did, however, cut the Department of Environment and Climate Change by $2.4 billion.
- Would-be homeowners are further away from the great Australian dream after this budget. Negative gearing and the capital gains tax discount help investors. For buyers, there's some money being spent on shared equity, but it's all just fiddling on the roof - a burning roof.
"To paraphrase Douglas Adams, this budget is mostly harmless," said Greg Jericho, Chief Economist at The Australia Institute.
"The new tax cuts provide a welcome change from previous income tax cuts, which have mainly benefited high-income earners.
"On housing, the government has expanded the eligibility for its Help to Buy scheme. But this is a tiny scheme that makes little to no difference for the generation of Australians who can't afford a home of their own. Expanding this scheme means it will continue to make little to no difference.
"The richest 10 percent of Australians will continue to collect $40 billion a year in superannuation tax concessions, negative gearing and the capital gains tax discount, which drive up house prices.
"Gas companies will continue to avoid paying their fair share of tax. The Prime Minister has paused beer excise, but gas companies don't need such measures. By 2028-29 twice as much will be collected from ordinary Australian beer drinkers than will be collected from PRRT, paid by rich, multinational oil and gas companies.
"It's a huge fail for climate and the environment. Shamelessly, while passing legislation that will critically hurt the survival of the Maugean Skate, the government has allocated $2.4 million for a breeding program that is only to start in 2026-27. Talk about being a day late and a dollar short."
