Chapter 1: What is the main topic discussed in this episode?
a listener production. Hi, it's Sasha Barbagat.
And Chris Brewer with you.
Welcome to The Briefing. A major overhaul to Australia's tax system to try to shift the country's wealth from boomers and investors to millennials, Gen Z and the next generations has formed the centrepiece of Labor's fifth budget.
Last night, Treasurer Jim Chalmers confirmed the government is breaking its election promise, although you won't hear him use those words exactly, to scrap existing tax breaks for property investors.
This is the most important and ambitious budget in decades. Important because the world is throwing a lot at us. And this budget is about helping Australia deal with those challenges.
There's also going to be an extra tax cut for workers, more money for defence and a plan to bolster national fuel security.
Overall, the budget will be better off by about $45 billion over the next five years compared to what was predicted six months ago. And while Australia's finances still remain firmly in the red with a deficit of $34 billion expected by the 2028-29 financial year,
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Chapter 2: What are the major changes in Australia's tax system announced in the budget?
there is hope of a return to surplus in 10 years, largely thanks to massive cuts already announced to the NDIS.
Now, the Iran war is also proving a key factor in a lot of the predicted outcomes. While there are key revenue opportunities in skyrocketing commodity prices and inflation, there's also the risk of a doubling of oil prices, which would drive inflation above 7%, unemployment over 5%, and send the economy backwards.
Chalmers says this budget is his most ambitious yet as he spends the political capital gained from Labor's landslide election victory last year. But it's also politically risky with the coalition waiting in the wings to take the government to task over the broken promises around property taxes. So with all that said, what are the five key takeaways last night for you to take into your day today?
Let's get into it. It is the Briefings Budget Breakdown on Wednesday the 13th of May.
We'll give the call to the Treasurer.
Now, we were all expecting it, and it was confirmed last night by Jim Chalmers. Major changes to negative gearing and capital gains will make up the centrepiece of the 2026 budget.
The easiest thing in the world would be to leave these tax breaks in place exactly as they are, but it's locking too many people, particularly young people, out of the housing market. And so we've come to a different view for the right reasons.
So we'll start with negative gearing. That allows people to deduct rental losses from their tax. And that will only be available to those who invest in newly built homes. That's the major change here. Importantly, this change will be grandfathered. That is... Yeah.
Yeah. Okay. So as to the changes to the capital gains tax, this is the other part of that centrepiece tax reform policy. Capital gains taxes currently see people only pay tax on half of their capital gains from investment assets. So that is going to now shift to the previous pre-Howard era model, which will tax real inflation adjusted boost to asset prices when investors sell and at a
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Chapter 3: How will negative gearing and capital gains tax be affected?
And watching the ABC report last night, their political reporter made this interesting point that the word uncertainty was mentioned 54 times in this budget. So there are still a lot of question marks around what might happen in the coming years, depending on what happens in Iran. Before we get back into our budget breakdown, it is time for an update on Australia's blood supply from Lifeblood.
Blood supplies are at concerning levels this week. O negative is very low while O positive, A positive and A negative are all at low levels. Lifeblood is calling on new and returning donors to book an appointment this week. Every 18 seconds, someone in Australia relies on a blood donation and your donation means it's there for them when they need it most.
Search blood supply or visit lifeblood.com.au to book your donation.
Moving now to defence, there's a little something in there that old Donnie in the White House might get a kick out of learning if news of our budget reaches him, which I don't think it will. Labor will spend an extra $53 billion on defence over the next decade. Now, we did already know this, but, you know, to see it in the budget papers means it's concrete.
Right.
Locked in. Locked in. Australia has been under serious pressure from the Trump administration to lift our defence spend and the government plans to increase it to 3% of our GDP by 2033.
Speaker, economic security, economic resilience and national security are now one and the same. We're investing an additional $53 billion over the next decade in our Defence Force to keep Australians and our region safe. And there's almost $800 million for veterans as part of our response to the Royal Commission into Defence and Veteran Suicide.
Now, look, that lift to 3% of GDP does fall short of what Donald Trump wants, which is 3.5%. But, you know, it's not as high as what he's asking NATO members, which is 5%. Again, a bit of context here. Will Donald Trump learn about this lifted defence ban from Australia? Probably not.
But there you go.
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