Budget 2026 projects a tight short term and cautiously optimistic medium term, forecasting modest economic growth, easing inflation, rising interest rates, returning to a small surplus in 2028/29. Business confidence is shadowed by continuing geopolitical uncertainty and associated oil supply shock.
By now you have seen extensive budget coverage on measures relating to infrastructure, health, education, and defence. Here we focus on coming tax changes, and implications for business, investors and taxpayers:
The first legislation giving effect to Budget 2026 has been introduced into the House, covering:
- Reducing the cap for gifts qualifying for donation tax credits to $100,000 or the donor’s taxable income, whichever is lower.
- Outstanding shareholder loan balances will be deemed taxable income six months after a company is removed from the Companies Register (applying to removals on or after 4 December 2025).
- Simplified family scheme income calculations from the 2027–28 income year, and Working for Families residence requirements
- Non-resident contractors’ tax exemptions for the dry leasing of aircraft and parts.
Further tax changes have also been announced, with legislation expected to be introduced into the House prior to the election. Timing may not allow all of these to be passed into legislation prior to the election. An incoming government will need to restore and pass this legislation.
We’ll keep you updated.
