There has been a lot of talk about the 2026 Federal Budget. We’ve seen media go crazy over it, politicians take extreme views, and a lot of fear being generated. ETU members are under pressure like never before – the cost of housing and fuel is putting pressure on families’ budgets.
The Budget aims to respond to some pressures through housing reforms, infrastructure investment, fuel security measures and changes to the tax system. A lot of the measures are aimed at making life fairer for workers, whether that’s helping them enter the housing market, reducing the costs of fuel, and building infrastructure that creates jobs. But there is a lot that the Budget also misses, in terms of skills and training, which is of particular importance to the electrical trades, where we need an addition 40,000 apprentices over the next 4 years to avoid shortages.
This budget won’t solve everything for everyone. Housing costs will remain high, and groceries are still expensive. But it is the start of rebalancing the tax system in favour of those who earn the majority of their income through work and wages, instead of those who rely on shares and rental income.
So what is actually in the Budget for ETU Members? We’ve pulled out some of the key policies that might impact you:
Key Policies
Local Infrastructure Fund
A centrepiece of the Budget is the $2 billion Local Infrastructure Fund to support much needed infrastructure that was neglected after a decade of Coalition government such as water, power, sewerage and roads. This funding will support up to 65,000 homes over the decade, creating jobs for electricians around the country.
Fuel security
The Budget strengthens Australia’s fuel security system through a combination of increased stockholding requirements and strategic reserves.
The Government will expand the Minimum Stockholding Obligation by an additional 10 days of supply for diesel, jet fuel, and petrol. It will also establish a $3.2 billion Australian Fuel Security Reserve owned and operated by the federal government for Australians, which will hold around 1 billion litres of diesel and jet fuel.
Together, these measures will lift Australia’s diesel and jet fuel reserves to around 50 days of coverage. This is designed to reduce exposure to global supply disruptions and improve resilience for critical industries.
In addition, the Budget strengthens the Fuel Security Services Payment to support the ongoing operation of Australia’s domestic refineries and provides funding for feasibility studies into expanding refining capacity. Administration and oversight of the fuel security framework is also resourced.
Standards
The Budget also includes a long-awaited change around access to mandatory Australian Standards, with the Government committing to progressively make them freely available. The reform will apply to standards across areas including electrical work, construction, workplace health and safety, and product compliance. For apprentices, tradespeople and small businesses, the move is expected to ease some of the financial burden associated with accessing essential technical documents, while also improving access to important safety information like the AS/NZS 3000:2018 Wiring Rules. The ETU is currently working with Treasury to ensure that the maximum number of standards are available to electrical workers, and will update members as this develops and is rolled out.
Working Australians Tax Offset
From 1 July 2027, a new Working Australians Tax Offset will provide a permanent tax reduction for income derived from work, including wages, salaries, and sole trader business income.
This measure will increase the effective tax-free threshold for labour income to approximately $19,985, and up to $24,985 for eligible low-income earners.
Importantly, this offset does not apply to passive income such as rent, dividends, or capital gains, meaning the tax system will now give workers more support to keep more of what they earn.
Tax reform
The government is undertaking the most ambitious reforms to our tax system this century, with the focus squarely on improving housing affordability. Treasury modelling suggests that the reforms will increase the owner-occupier share of the housing market, resulting in around 75,000 additional owner-occupiers over the next decade. This is equivalent to reversing around 10 years of declines in the home ownership rate.
Capital gains tax
From 1 July 2027, the capital gains tax system will be reformed. The existing 50 per cent CGT discount for assets held longer than 12 months will be replaced with inflation indexation of the cost base, alongside a 30 per cent minimum tax on net capital gains. All capital gains made until 1 July 2027 will remain eligible for the 50% discount, and any Australian that builds a new home, increasing supply and improving affordability will remain eligible for the 50% discount. Pensioners and income support recipients will be exempt from the minimum tax.
This change shifts the system toward taxing real rather than nominal gains. The effective outcome will vary depending on inflation and asset growth, with lower-growth assets generally facing lower taxation than under the current system, and higher-growth assets remaining broadly comparable.
For most people putting their money in the stock market, the effective tax rate will be relatively unchanged given cost base-indexation offsets the minimum CGT rate. Treasury estimates the average tax rate on gross capital gains across the economy will increase by 2.1 percentage points to 21.4 per cent by 2036-37.
There are also carve-outs for small businesses that are already in the tax system and this won’t change. This includes an exemption from CGT for a small business owned for 15 years, a 50 per cent active asset reduction, an exemption for retirement for $500,000 of gains, and deferral of a gain made on selling an active asset when the gain is rolled over into a replacement asset.
Negative gearing
Negative gearing arrangements for residential property will be narrowed to encourage investment in new housing supply. From 1 July 2027, losses from established residential properties will only be deductible against rental income or capital gains from residential property. Excess losses will be carried forward into future years.
These changes will apply only to established properties acquired after 7:30pm on 12 May 2026. Any properties you currently own will be retain the ability to negatively gear until they are sold. Exemptions will apply for superannuation funds (including self-managed), widely held trusts, and build-to-rent developments.
The policy is designed to remove incentives for investors from existing housing stock and shift them towards new supply to improve affordability and access to housing for first home-buyers.
Trusts
A 30 per cent minimum tax will be applied to discretionary trusts from 1 July 2028. Under the new arrangement, trustees will pay tax at a minimum rate of 30 per cent on taxable income, with beneficiaries receiving credits for tax already paid. A range of exclusions will apply, including fixed and widely held trusts, superannuation funds, charitable trusts, and specific categories of income. A three-year transitional period will allow restructuring into other entity types, including companies or fixed trusts. This measure is to prevent distributing large incomes amongst family members to minimise tax.
So what wasn’t in the budget?
Skills funding has been cut by $297.9 million over four years from 2026–27 (and $106.3 million per year ongoing). 12% of this has been redirected to Jobs and Skills Australia and Australian Skills Quality Authority over the forward estimates, and 9% ongoing.
Quarterly electrical apprenticeship commencements have fallen by 930 places since 2022, an 18.8% decline. In the face of skills shortages of 42,500 electricians by 2030, this budget was a missed opportunity to invest in the skilled workforce of the future. With unemployment on the rise, the government needs to do more to increase apprenticeship in the trades that build the homes needed to deliver on its housing affordability targets.
Pulling it all together
Essentially, this Budget has both good and bad for ETU members. It will help some, however the ETU is very concerned about the lack of skills funding, and we know that our hard-working members are feeling the pressures of inflation and cost-of-living. The Coalitions response doesn’t provide any better ideas – they have claimed they would attempt to index the income tax thresholds to inflation, however, if implemented, this would actually automatically increase the budget deficit when inflation is highest, increasing the cost of living and making life harder for workers. This would mean during periods of high inflation, the Coalition would have to increase taxes or cut public services that workers rely on for their families, rather than return bracket creep to workers in a responsible way over time, with regards to the macroeconomic conditions. The ETU will continue in it’s fight to make sure Australia is taxing wealth, not work – we need to make sure the 1% is paying their share, rather than ordinary hard-working Australians. No matter who is in Government, the ETU will consistently advocate for it’s members, and push for better.