Budget 2026: The changes you'll feel first

At first glance, the Federal Budget can feel abstract and distant with its fiscal balance, forward estimates and billions of dollars moving around.

But in reality, the money the government raises and spends has very real consequences for almost every Australian.

From tax and housing to health and infrastructure, here are some of the major measures outlined in the 2026 Federal Budget and who they will affect.

1. Working Australians

Tax reform was at the heart of the budget, and Treasurer Jim Chalmers made it clear in his budget speech that Australian workers - as disparate a group as it is - were designed to be the beneficiaries.

Chief among the policies set to benefit workers is the new Working Australians Tax Offset (WATO) which will provide roughly 13 million workers with $250 in their tax refund each year from 2028.

The budget also outlined the new $1000 instant tax deduction which Australians will be able to use to claim work-related expenses when filing their tax returns in the second half of next year.

"This is a budget that finally tackles a system that's been taxing work harder than taxing wealth," says ACTU president Michele O'Neil.

"This budget marks a shift that gives workers a fairer shot at housing stability through tax changes that will start to rebalance the rules."

The new measures are set to build on the stage 3 tax cuts already implemented and the new round of income tax cuts, which will take place from July 1 this year and July 1, 2027.

2. Low-income households

Beyond the new tax initiatives, the budget also outlined several changes the government argues will directly benefit low-income households.

From July 1, the Medicare levy low-income thresholds for singles, families, seniors and pensioners will be raised by 2.9%.

For example, the threshold for singles will increase from $27,222 to $28,011 and the family threshold will go from $45,907 to $47,238.

Income support payments like the Age Pension and JobSeeker will also continue to increase, but at the standard rate of indexation - not because of any new injection of funding.

Cassandra Goldie, chief executive of the Australian Council of Social Service, says that while many of the budgets' tax reforms are welcome, some Australians are still being left behind.

"People with the least, who are most in need of help, especially when cost of living is sky high, do not get the real increases they need in this budget."

3. Investors

Australians looking to invest in property or other asset classes like shares are likely to be relatively worse off in the years to come as a result of less advantageous tax settings.

That's assuming that the government's major amendments to capital gains tax and negative gearing announced in the budget are legislated.

"These changes reshape the incentives for every investor in Australia. Property, shares, crypto, collectibles - if you have an investment portfolio, this budget matters to you," says Susan Franks, Australian tax and superannuation lead at Chartered Accountants ANZ.

Investors may benefit from greater scrutiny of investment management schemes going forward though, with the budget allocating $17 million to ASIC and other bodies to enhance governance requirements, supervision and enforcement in the sector.

4. Future homebuyers

While many investors are unlikely to be happy with the changes around the capital gains tax and negative gearing, future homebuyers could stand to gain.

The government estimates that the reforms will support an additional 75,000 first homebuyers to purchase property over the decade thanks to increased supply and diminished competition.

Trent Saunders, a senior economist at the Commonwealth Bank, suggests that the tax changes are likely to have a relatively modest impact on both home prices and rent prices.

"The combined effect of the changes to negative gearing and the indexation of the CGT discount are expected to see house prices just under 3% lower than they otherwise would have been.

"Treasury estimates that rents could increase by around $2 per week for a household paying the current median rent, which is broadly in line with our estimates."

Elsewhere on the housing front, buyers will face less overseas competition, with the budget outlining an extension to the ban on foreign purchases of existing residential property until June 2029.

5. Older Australians

While measures related to tax and housing reform were presented as moves to address issues of intergenerational fairness for younger people, the budget was arguably more of a mixed bag for older Australians.

Some seniors and pensioners on lower incomes will benefit from increases to the Medicare levy low-income thresholds.

The government has also allocated $449 million to fund free RSV vaccines for all people aged 75 and over and Aboriginal and Torres Strait Islander peoples aged 60 and over through the National Immunisation Program.

However, millions of older Australians are likely to be worse off because of the government's decision to cut a private health insurance rebate for people aged over 65.

"We are particularly concerned about the impact of changes to the private health insurance rebate," says Patricia Sparrow, Council on the Ageing (COTA) Australia chief executive.

"If people drop private health cover altogether or reduce their level of cover because it becomes unaffordable, pressure simply shifts onto already overstretched public hospital systems.

"Older Australians are among the biggest users of healthcare and the rebate has helped many maintain their cover."

Get stories like this in our newsletters.