Australian Consumer FY27 Federal Budget - Pulling Up the Ladder

Research evidence excerpt

Australian Consumer FY27 Federal Budget - Pulling Up the Ladder

J P M O R G A N Asia Pacific Equity Research

13 May 2026

Australian Consumer

FY27 Federal Budget - Pulling Up the Ladder

The FY27 Federal Budget marks a clear pivot towards higher taxes on assets to Australia

rebalance vs. income tax rates, in what is a direct appeal to younger voters. The

Australian Consumer Sector

contractionary budget for households lacked surprises vs. media reports in recent

weeks. The direct impacts of these tax policies will not be seen in FY27e, and the Bryan Raymond AC

headline impacts from negative gearing and CGT indexation are marginal due to (61-2) 9003-6750

bryan.raymond@jpmorgan.com

grandfathering. Nevertheless, the impact on marginal supply and demand in the

Christina Kim

housing market may be evident ahead of this as the tax regime changes. The retail (61-2) 9003-7082

sector will see negative second order impacts, particularly at a time of lower christina.kim@jpmorgan.com

housing activity following three RBA cash rate hikes. Tax relief was very marginal J.P. Morgan Securities Australia Limited

and long dated, albeit tax cuts will likely be a feature in upcoming pre-election

budgets. The one positive for the consumer from this contractionary budget may

be that it reduces the need for further RBA rate hikes. Refining industry support was

well flagged prior to the budget, but is a clear positive for refining earnings and

valuations. See J.P. Morgan economist Ben Jarman’s view on the budget here, and

the impact on credit growth and the banks from Andrew Triggs here.

• Tax reform on negative gearing and CGT to impact housing activity.

Negative gearing and Capital Gains Tax changes will lower after-tax returns for

investors and will weigh on housing activity.