Bill Shorten has spent a decade watching the Australian property market evolve from a cornerstone of middle-class wealth into a formidable barrier for an entire generation. Now, as the former Labor leader looks at the 2026 Federal Budget, he sees a reflection of the policies that once cost him the prime ministership.
Speaking to the ABC’s RN Breakfast, Shorten—now the vice-chancellor of the University of Canberra—said he feels “vindicated” by the government’s decision to overhaul negative gearing and capital gains tax (CGT). The reforms, unveiled by Prime Minister Anthony Albanese and Treasurer Jim Chalmers, target the very tax incentives that Shorten attempted to curb during the 2016 and 2019 elections, only to be met with fierce political resistance.
The 2026 Budget represents a significant pivot for the current Labor government, which had previously signaled it would not touch these incentives. By introducing changes to negative gearing, CGT and discretionary trusts, the government is attempting to address intergenerational inequality and cool a housing market that has increasingly locked out first-home buyers.
A decade of demographic shifts
For Shorten, the ability to pass these reforms now is not a matter of luck, but a result of a fundamental shift in the Australian electorate. He noted that the demographic landscape has changed over the last ten years, making the public more receptive to the idea that the tax system has become “out of whack.”
Shorten described the current policies as “modest, not massive,” but argued they align closely with the principles he championed a decade ago. He also highlighted the strategic advantage of power, noting that the “benefit of incumbency is real,” and that it is far easier to implement systemic change when a government already “holds the cards” rather than fighting from the opposition benches.
Despite the gravity of the reforms, Shorten remained optimistic about the property market’s resilience, quipping that “chickens are still laying eggs and property will still be a great bet in Australia,” even with the removal of certain tax perks.
The mechanics of the 2026 housing reforms
To mitigate political fallout and economic shock, the Albanese government has opted for a “grandfathering” approach. This means existing property investors will continue to enjoy negative gearing incentives on the assets they already hold, while new investments will be subject to the new, more restrictive rules.
The government argues this transition is the “right thing to do,” balancing the needs of those who made financial decisions based on the old system with the urgent need to help new buyers enter the market. Treasury modelling suggests the changes will allow an additional 75,000 people to enter the property market over the next decade—averaging about 7,500 per year.
| Feature | Previous/Existing System | Budget 2026 Reform |
|---|---|---|
| Negative Gearing | Broadly available for most investors | Grandfathered; restricted for new buys |
| Capital Gains Tax | Standard incentives apply | Revised for new investments |
| Market Goal | Investor-led growth | Increased owner-occupation (est. 75k) |
| Renter Impact | Market-driven rents | Est. $2/week increase for median rent |
Opposition labels budget an ‘assault on aspiration’
The Coalition has reacted with swift and sharp condemnation, though a slight rift has appeared in their messaging. Shadow Treasurer Tim Wilson has been the most aggressive, describing the budget as being “built on bad faith” and “broken trust.” Wilson argues that the government broke an election promise not to touch these incentives and has vowed to “repeal if necessary” the changes if the Coalition returns to power.
Opposition Leader Angus Taylor echoed the sentiment, calling the budget an “assault on aspiration.” However, Taylor was less definitive than Wilson regarding an outright repeal, telling the ABC’s AM program “let’s see” when asked if he would yank back the reforms. Taylor instead focused on the perceived insignificance of the changes, claiming they would only increase home ownership by 0.1% and would lead to fewer homes being built.
Prime Minister Albanese has dismissed the Coalition’s response, labeling the opposition a “rabble” and arguing that their tendency to “say no to everything” ignores the long-term necessity of the reforms.
Broader economic and social impacts
While housing dominates the headlines, the 2026 Budget includes other measures aimed at cost-of-living relief, including a $250 income tax offset for working Australians. However, the Opposition has already dismissed this as a “fraud,” claiming inflation will swallow the benefit within six months—especially since the offset will not reach wallets until tax time in 2028.
The reaction from external stakeholders has been mixed:
- CEDA: The Committee for Economic Development of Australia praised the government for spending “political capital” on productivity and intergenerational fairness.
- AMA: The Australian Medical Association welcomed $25bn in additional public hospital funding but warned of a remaining $9.6bn gap.
- Climate Council: The council slammed the budget for maintaining $19bn in annual fossil fuel subsidies, calling it a “massive free kick” to multinationals.
Disclaimer: This report is for informational purposes only and does not constitute financial, tax, or legal advice. Readers should consult with a qualified professional regarding their specific financial situation.
The government now faces the challenge of navigating these contentious reforms through Parliament. The next critical checkpoint will be the legislative debate over the Budget bills, where the government must defend its “changed position” against a Coalition determined to frame the reforms as a breach of electoral trust.
Do you think these tax reforms will actually help first-home buyers, or will they drive up rents? Share your thoughts in the comments below.
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