The 2026-27 Federal Budget marks a clear shift by the government toward addressing intergenerational and wealth inequality, prioritising a more resilient economy that benefits both current and future generations of Australians.
The Centre for Policy Development (CPD) supports the government’s reforms to the Capital Gains Tax (CGT) discount and negative gearing. These are essential steps to remove the tax distortions that have long favoured wealthy property investors over younger people and low-to-middle-income families.
“While the housing affordability crisis is complex—and much more needs to be done—these reforms are a necessary and welcome intervention,” says CPD Research Director Warwick Smith.
“With 92% of investor finance flowing into established homes rather than new builds, these concessions have significantly inflated prices while doing little to increase the supply of housing. Reforming these settings is a critical move toward restoring the promise of homeownership and ensuring our housing system serves the needs of all Australians, not just the interests of investors.”
Beyond housing, reforming the CGT discount also removes a tax break that overwhelmingly benefitted the top 10% of earners. This reform ensures that all Australians contribute a fair amount, regardless of whether their income is generated from investments or from work.
CPD also supports the Government’s move to overhaul the skilled-migration points test and fast-track the recognition of overseas qualifications. These reforms address the chronic underutilisation of skilled migrants in Australia—tens of thousands of whom are qualified and ready to work in critical fields, but are currently sidelined by bureaucratic bottlenecks and accreditation hurdles.
“Reducing the time it takes for overseas-trained workers to enter the workforce isn’t just about filling skills gaps; it is a key way to improve productivity,” says CPD Economic Director Toby Phillips. “It is also a vital step toward accelerating Australia’s path to becoming a global green energy superpower, where we need to double our energy workforce over coming years.”
This measure reflects a key CPD recommendation to build a workforce capable of competing in a global economy that is rapidly decarbonising. Without these changes, Australia risks stalling on major infrastructure projects essential for the energy transition due to avoidable labour shortages.
However, CPD highlights a missed opportunity to further accelerate the energy transition. While we acknowledge the need to focus on immediate energy security, more needs to be done to lessen Australia’s reliance on fossil fuels and drive investment in technologies that will secure long-term energy independence. Intergenerational equity also means delivering on a swift transition to a net zero future.
Measures to improve Australia’s social services systems, particularly those aimed at early childhood development and employment, are welcome but must be paired with a commitment to improving how these services are delivered. The goal must be a social services system that is flexible, collaborative, person-centred, and deeply connected to the communities it serves.
The $2.2 billion investment in Services Australia is a necessary step to ensure Australians can effectively access support. Similarly, the $316 million in funding for employment services addresses a system in need of extensive reform. CPD has long recommended an overhaul of the current system and hopes this funding will be used to move the system forward so that it better meets the needs of the people it serves.
The government’s $2 billion investment in foundational supports for children under Thriving Kids is crucial. CPD’s work has consistently highlighted the importance of early, community-based and relational supports to help children and families address challenges early before problems escalate. This investment is an opportunity to build more inclusive and preventative approaches across the system.
Additional funding commitments for child and family support, inclusion in early childhood education and care and First Nations communities are also vital steps to ensuring all children and families are supported to thrive.
Taken together, CPD welcomes these budget measures as vital steps toward tackling the growing wealth gap, better supporting children and families, and building the industries and economy we need for a more prosperous future.
