May Budget Live

Tonight’s “resilience” budget delivers its most immediate wins to households and small businesses through a confirmed $150 energy rebate and a streamlined $1,000 “receipt-free” tax deduction for 6.2 million workers. Construction and housing sectors also secure a victory with $2 billion dedicated to unlocking 65,000 new homes, supported by a $105.9 million investment in AI to fast-track environmental approvals. While motorists continue to benefit from the current fuel excise cut, the long-term strategic winners are those in the national security and energy sectors, as the government commits $10 billion to shore up domestic fuel and fertilizer sovereignty.

The most significant losers in tonight’s budget are prospective property investors, who face the removal of the tax benefits that have driven growth over the past two decades. The NDIS sector is also bracing for impact as the government implements a hard participant cap and stricter eligibility criteria aimed at cutting $35 billion in projected growth, while professional services firms and consultants see a $6.4 billion reduction in federal contract spending. Furthermore, regional communities in the north lose out with the formal cancellation of the Inland Rail project beyond Parkes, and high-wealth individuals utilizing discretionary trusts will see tighter restrictions on income-splitting loopholes.

The 2026-27 Budget may lead to a mixed or cautious reaction on the ASX tomorrow as investors weigh a slowing economy against targeted government support. While the government is introducing tax reforms to help businesses and small firms—such as a permanent $20,000 instant asset write-off—the broader economic growth is forecast to slow significantly from 2.25% to 1.75% due to high global oil prices and inflation. Markets often dislike uncertainty, and the Budget highlights “extreme global volatility” and risks that inflation could stay higher for longer, which might pressure the Reserve Bank to keep interest rates steady or high. However, specific sectors like energy, housing construction, and healthcare may see some positive interest due to billions in new funding for fuel security, social housing, and public hospitals.