Budget unlikely to reform but may unsettle markets, analyst says

Binaya Dahal

Journalist

30 April 2026

The looming Federal Budget is unlikely to deliver structural reform but could still unsettle investors through targeted adjustments to capital gains tax, negative gearing and superannuation, HLB Mann Judd’s wealth partner Andrew Buchan says.

Buchan said the dominant theme emerging for investors this year is policy uncertainty rather than policy shock, warning that even modest adjustments can influence how and where they allocate the capital.

“While sweeping changes may appear unlikely, even incremental policy adjustments could have meaningful implications for investment strategy, particularly across property, superannuation and tax settings,” he said.

The caution comes as the Albanese government prepares to hand down a budget widely expected to prioritise cost-of-living relief, particularly measures linked to energy, healthcare and household tax, rather than major structural reform long advocated by economists.

Buchan said the government faces a difficult balancing act between fiscal discipline and political necessity, with deficits persisting and government debt projected to remain elevated.

“This is unlikely to be a reform-heavy budget. We expect targeted measures that address immediate pressures while deferring more difficult long-term decisions,” he said.

Even though tax reform has re-entered the policy conversation ahead of budget, Buchan urged investors to temper expectations as any significant overhaul remains politically challenging.

Potential changes under consideration include adjustments to capital gains tax concessions and negative gearing arrangements, alongside the continuation of already-legislated personal income tax cuts.

“We’re seeing growing momentum for tax reform, but the reality is that meaningful change may be gradual,” he said. “Investors should be prepared for tweaks rather than transformation.”

Buchan expects housing to draw the most scrutiny but cautions that without grandfathering provisions, changes could significantly impact sentiment.

“Even modest changes to tax settings may have an impact on transaction activity and supply. Growth assets, particularly housing, is where policy decisions could most directly shift investor behaviour,” he said.

On superannuation, Buchan says “we’re moving away from open-ended tax concessions toward a more targeted framework, particularly for high-balance investors”.

He added the budget is likely to be less about bold moves and more about direction. “For investors, understanding that direction and positioning accordingly will be critical,” Buchan said.