Budget leaks; One Nation wins Farrer; rare set of Grange for sale
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What are the key highlights of tomorrow's federal budget?
Welcome to Fear and Greed, business news you can use. Today, the federal government applies the final touches on tomorrow night's budget, which is expected to focus on tax, productivity and savings. One Nation's win in the Farah by-election over the weekend escalates problems for the coalition, And Kohl's leans into the Ozempic economy. Plus, a rare full set of Penfolds Grange is up for sale. And Wall Street hits a new record, adding 10 trillion U.S. dollars worth of value in just 29 trading days. It's Monday, the 11th of May, 2026. I'm Nadine Blaney from Ausbiz, and good morning to you, Sean Almer.
Good morning, Nadine, and welcome to the show. We had the wonderful Juliet Sali last week, and you're helping us out this week while Michael's away. I'm looking forward to it.
I am as well. It's nice to be here. Thank you.
Excellent.
The main story this morning, and the final touches, Sean, are being applied to the federal budget due to be released at 7.30pm tomorrow night, Tuesday. It will be a budget with a focus on tax changes, productivity, and savings. What we know so far is there will be changes to tax rules applying to capital gains, negative gearing and trusts. There could be a small cash splash for wage earners in the $200 to $300 range. And businesses should benefit from more generous rules around R&D expenditure. There's also an extra $53 billion for defense over 10 years. And yesterday, just yesterday, the government announced $2 billion to enable infrastructure building, things like water and sewerage piping for housing developments.
And already I note that the HIA is coming out in big support of that.
Yes. On the cost side, there'll be big savings from the National Disability Insurance Scheme in future years. Those programs are being passed to the states, but there will no doubt be some spending pressures, particularly in health and aged care. We also know there's that $11 billion fuel security package announced last week. Maybe the government will extend the current reduction in the fuel excise. We all pay at the pump. That kicked in a couple of Well, about six weeks ago, it's supposed to finish in July. Maybe it'll go a bit longer than that. The budget is unlikely to be as reformist as the government had hoped a couple of months ago before the outbreak of the war in the Middle East. And it's unlikely to raise large amounts of extra revenue, at least in the next couple of years.
It is a big budget economically, but not really politically. The federal government has a huge mandate from the election 12 months ago. This is the opportunity for the Albanese government to make big changes. Unfortunately for it, the Middle East conflict has probably diminished its ability to do so.
Middle East conflict has a lot to answer for. We heard that in Michelle Bullock, the RBA governor's address last week, didn't we? But Sean, the federal government's economic forecasts are likely to show higher inflation for longer and slower economic growth. Now, the budget bottom line is always closely watched.
How did One Nation perform in the Farrer by-election?
And of course, it includes many moving parts. But some economists suggest it might be lower than previous forecasts. So the starting point, as per the Mid-Year Review, is a deficit of $36.8 billion. We know it won't be in surplus any time in the next four years. I mean, we heard that from Treasurer Jim Chalmers yesterday. But there are a bunch of reasons it might actually be better than that.
Yes, like a particularly strong employment market. That means people are paying income tax, so money's coming in, less going out on welfare payments. We've also had higher commodity prices. That translates to higher royalties and other tax payments to the government. Iron ore prices have remained pretty strong, very important for our economy. On the spending side, as we mentioned, the NDIS changes should help the bottom line in a few years' time. I suppose the big unknown here, and you mentioned Michelle Bullock, she even alluded to it last week that government spending is an issue in terms of interest rates.
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Chapters
5 chapters
1
What are the key highlights of tomorrow's federal budget?
0:06–3:10
2
How did One Nation perform in the Farrer by-election?
3:10–4:34
3
What impact does the Ozempic economy have on Coles?
4:34–7:01
4
What record did Wall Street achieve recently?
7:01–10:07
5
How does the federal budget address tax changes and productivity?
10:07–17:09
Speakers
2 identifiedMore from FEAR & GREED | Business News
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