Jim Chalmers hints at more tax cuts before 2028 election after Budget crackdown on negative gearing and CGT

Published: 22:05, 13 May 2026 | Updated: 22:08, 13 May 2026 Tax changes in the budget give the government scope to direct more relief to workers in future, raising the prospect of a 2028 pre-election sweetener. While higher taxes on assets will be returned to workers via tax cuts in the short term, Treasury predicts the budget changes will deliver the government a $77 billion war chest over the 10 years to 2036/37. With a federal election scheduled for 2028, it opens the door for more tax cuts in coming years by addressing bracket creep, where workers' wages are eaten up by inflation as they are pushed into a higher tax bracket. The novel 'Working Australians Tax Offset' included in the budget offers a new way for governments to return bracket creep solely to people who earn an income through labour, rather than through assets, Treasurer Jim Chalmers said. 'My ambition when it comes to future tax reform is to try and provide more tax relief for working people,' he told the National Press Club on Wednesday. 'We set up this architecture to make that easier on the income tax side for workers and so I would intend to make the most of that at some future point. 'I suspect that successive governments after us would do that too.' Dr Chalmers said the government decided to backflip on assurances not to touch negative gearing and the capital gains tax discount because the status quo was doing more damage by marginalising young Australians than a broken promise would. The federal budget targeted housing tax breaks in a bid to help young Aussies buy their first home The changes would rebalance the tax burden so it was shared more fairly between income from assets - typically relied upon by wealthier, older Australians — and labour, which younger Australians rely on more heavily, he said. Prime Minister Anthony Albanese said winding back negative gearing and capital gains tax breaks would not curb ambition for future generations. 'They can invest in a new build, though, and what they'll be doing is not just helping to build their own portfolio, they'll be helping to build homes that other young people will be able to move into and rent,' he told Seven's Sunrise program on Wednesday. The Coalition has attacked Labor for misleading voters after the prime minister pledged during the 2025 election not to tinker with negative gearing. The prime minister conceded there would be a large-scale campaign against the move. 'We're doing something about it, that's the point. You're elected to govern, to make hard decisions,' he said. 'I knew there'd be a bit of blowback on this,' he said, adding, 'but gee, it's the right thing to do'. The $250-a-year wage earners tax offset won't hit pockets until mid-2028, but Dr Chalmers said more immediate relief would flow through from July, with the previous year's top-up tax cuts and a $1,000 instant tax deduction. The treasurer said it would take time for the full extent of the negative gearing changes to become clear. Gains on properties built before 1985 - which have previously been exempt from CGT — will start being taxed from July 2027 at the inflation-adjusted rate. A 30 per cent minimum tax will also be imposed on discretionary trusts, which are often used by wealthy families to split income between family members and minimise tax. Together, the changes to investment taxes will rake in an extra $8 billion, to be spent on the new offset for all workers and further relief for businesses and startups. Opposition Leader Angus Taylor said while the Coalition supported measures for small business, the tax changes were a broken promise. 'We think there's different savings. We think there's much better places to save rather than hitting Australians with higher taxes,' he told ABC Radio. 'The budget papers show that the changes around negative gearing, capital gains and the trusts will dampen investment.' The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.