Budget 2026: The good, the bad and the downright ugly

Budgets are more than just dollars and cents. They set out the legislative agenda and the fights that will animate the media and parliament for the coming year. 

Key Budget announcements in 2026 set up several fights, with seniors caught in the middle of some of these. 

The 2026 Federal Budget has been heavily framed as an opportunity to create greater intergenerational equity.  

The Treasurer, Dr Jim Chalmers, has proposed changes to tax concessions and rebates, including changes to the Capital Gains Tax discount and to the private health insurance rebate for seniors through the lens of intergenerational equity. 

It didn’t have to be this way. Older people, like younger people, are not a homogenous group, with many older people struggling with rising living costs, a lack of housing, and rising health costs. 

Below is a wrap of the key Budget announcements with a call to action on private health insurance rebates.  

Private health insurance rebate 

A reduction in the higher rebate for seniors has been justified on intergenerational equity grounds, but this is misguided. In truth, the higher rebate saves the government money and supports the sustainability of both the private and public health systems, which helps all generations. 

Encouraging older people, especially pensioners and low-income self-funded retirees, to retain private health insurance means they are more likely to contribute to the cost of health out of their own pocket – saving government money!  

People will not support user charges for a public hospital system with huge waiting lists for elective surgery, so encouraging older people to retain private insurance makes good economic sense.  

This change, from 1 April 2027, will cost a couple aged over 70 currently paying $7,000 a year about $830 a year more in premiums according to our new rebate cut estimator. 

Rather than reform the rebate so it is more effective at retaining older people, the government chose to take an axe to a knife fight – effectively chopping off tens of thousands of pensioners from the private health system and burdening others with higher costs to remain in the system.  

National Seniors Australia (NSA) will fight this change in the media and by lobbying parliamentarians, but we can’t do it alone.  

If this change concerns you:  

• Check out and share our rebate cut estimator with friends and encourage them to join the campaign 

• Join our Health Costs campaign or make a donation to the campaign 

• Become a member of NSA. 

The most powerful way for us to be heard is by having real people share the impact of this change through the media (TV, radio and print). It’s not for everyone but if this is something you are willing to do, please email us at policy@nationalseniors.com.au with details of how the rebate change will affect you.  

Capital Gains Tax (CGT) and negative gearing 

The proposed changes to the CGT discount and negative gearing are complex and will affect people differently, depending on their circumstance. 

On the plus side, capital gains made before 1 July 2027 will be grandfathered and continue to attract a 50% discount. Tax on gains made after 1 July 2027 will be subject to the Keating era method using cost base indexation (adjusting the purchase price for inflation), but with a 30% minimum tax on net capital gains. 

Assets purchased and fully sold before 1 July 2027 are not affected by the change.  

People who buy new investment properties will be able to choose between the 50% discount and the inflation adjusted discount to encourage investment in new housing stock. 

The CGT change will impact all assets, such as shares, not just housing assets. The budget papers say it will apply to assets held by individuals, trusts, and partnerships, but according to CPA Australia, one of the peak accounting bodies, superannuation funds will maintain their current CGT treatment.  

The 30% minimum tax is the most controversial change. While some capital gains might be taxed at the 0% or 16% individual tax rates currently, this would apply a minimum 30% tax rate to the net capital gain.  

Importantly, Age Pension recipients are explicitly exempt from a 30% minimum tax on capital gains. 

The government also intends to apply the 30% minimum tax to some trust distributions form 1 July 2028. This is a very complicated proposal with many details to be confirmed. 

Investors purchasing existing housing from 7.30pm on the night of the budget will no longer be able to claim negative gearing when they purchase an existing dwelling, but newly built dwellings will continue to be eligible. Investors in newly built residential property will also be able to choose either the 50% discount capital gains rules or the new rules.  

Other assets, such as commercial property and shares, will continue to be eligible for negative gearing. 

In an ominous sign for renters, when a similar policy was introduced in New Zealand in 2021, this resulted in higher rental prices, leading to the policy being abandoned only three years later.