in brief
- Treasurer Jim Chalmers has acknowledged that the 2026 federal budget has cost Labor some "political paint".
- Liberal treasury spokesperson Tim Wilson said he expects the latest budget will be Chalmers' last.
Treasurer Jim Chalmers has been forced to concede that the 2026 federal budget knocked some "political paint" from the Labor ship as backlash against their proposed tax reforms continues.
The changes to capital gains tax (CGT) and negative gearing — announced in the budget and due to face final votes in the Senate next week — were difficult decisions but the right ones to make for younger generations, Chalmers has argued.
"If we’re given the choice between taking the easier path politically or doing the more difficult thing, but the right thing in the interests of — particularly first home buyers, young people, workers in the tax system — then it will be worth it," Chalmers told ABC radio on Friday.
"Obviously, there’s a big partisan political campaign against these changes. We understand that. We anticipated that. We expected that. But it’s worth it because our job isn’t just to take the easy political options."
Prime Minister Anthony Albanese has come under fire from business owners and political rivals for the changes, with a concerted campaign organised by One Nation to "fire the liar" over the claim that the reforms were not campaign pledges.
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Chalmers rebuffed the suggestion that the changes should have been announced before the last election by saying that Labor is focused on delivering effective solutions.
"The more important thing than the politics of this is to get the policy right, to get the substance right," he said.
"Because at the end of the day, what matters most is the tax system and the housing market are broken. We are acting to fix it."
The government has also been accused of "back-flipping" after announcing on Thursday that concessions would be made to the CGT changes they had outlined in their budget.
Under a plan announced in the budget, the existing 50 per cent CGT discount will be scrapped in favour of an indexation system and 30 per cent minimum tax rate from 1 July 2027.
On Thursday, the government announced a concession, with Albanese announcing that the 50 per cent active asset discount — which is applied on top of the standard CGT discount for small businesses with an annual turnover of up to $2 million — would be expanded to cover businesses with a turnover of up to $10 million.
The government has said the changes will benefit 2.7 million small businesses and 98 per cent of all active firms in the country.
Butler denies leadership ambition
Opposition treasury spokesperson Tim Wilson speculated on Friday that the budget would bring down Albanese's leadership and suggested Health Minister Mark Butler would be the ultimate beneficiary.
In a clash between the Labor and Liberal ministers on Channel Seven's Sunrise program, Wilson interjected that Butler was positioning himself as "the next person who’s going to be prime minister once Albo falls".
"I suspect this is the treasurer's last budget," Wilson told Sunrise host Natalie Barr, as "he's hashed it up so badly".
Butler, who was on the program to defend the government's changes to its CGT reforms, described Wilson's theory as "rubbish" and asked why anyone would "trust" the member for Goldstein.
The health minister told Barr that the relationship between Albanese and Chalmers was as strong as ever in the wake of the changes.
"They've had a productive relationship for the four years we’ve been in government ... this is an enormously productive relationship, which I watch up close," he said.
Opposition leader Angus Taylor attacked Labor's changes at his own press conference in Queensland on Friday, saying that its CGT proposal needs to be scrapped in its entirety.
"We don't need a backflip. We don't need a carve-out. We need an axe to this. This is a failed policy. This is a failed budget," Taylor said.
Chalmers, at a later press conference in NSW, also denied reports that his relationship with the PM was "frosty" as a result of the budget.
With the Opposition firmly against the changes, the government will need the support of the Greens and independents to pass its reforms. Chalmers flagged that Labor has been "engaging" with the left-wing party over the proposals.
The government is aiming to pass its reforms within a fortnight.
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