Unions embrace tax changes in support of workers, young people

Yasmine Raso

Senior Journalist

12 May 2026

The Australian Council of Trade Unions (ACTU) has voiced its support for several tax measures across cost-of-living relief and housing announced in tonight’s Federal Budget set to improve the system’s “fairness” towards workers and younger Australians.

The ACTU noted that the government’s changes to negative gearing and capital gains tax (CGT) would “rebalance the scales in favour of young people and workers” by making the housing market more accessible to and affordable for new entrants.

In his speech Treasurer, Jim Chalmers, confirmed that “house prices have risen over 400 percent, more than twice as fast as average incomes” since 1999 when the previous rules first came into effect. Replacing the 50 per cent capital gains tax discount with inflation‑adjusted indexation, coupled with a $2 billion injection to enable the necessary infrastructure to support the construction of 65,000 new homes, would relieve some of the housing pressures… off working people”, says the ACTU.

“This is a budget that finally tackles a system that’s been taxing work harder than taxing wealth,” ACTU President, Michele O’Neil, said.

“This budget marks a shift that gives workers a fairer shot at housing stability through tax changes that will start to rebalance the rules.

“It’s important to put housing back within reach for working people who have been locked out of affordable housing near where they live and work.

“The reforms will help working families that have been pushed further away from their communities and whose rents and house prices are increasing faster than wages.

“Young workers especially are falling behind, driven by old and unfair tax settings that privileged investors and professional landlords.”

A significant feature of the 2026 Federal Budget was update cost-of-living relief delivering a permanent tax cut of $250 for every worker as part of the new Working
Australians Tax Offset (WATO). Combined with the existing tax relief offered by the government, the tax cuts allow the average Australian worker to receive up to $2,816 in benefits from the 2027-2028 financial year.

The ACTU also welcomed the news that discretionary trusts would also be subject to a mandatory 30 per cent tax rate from July 2028 to “better align the taxes paid on these types of income with the taxes paid on wages”, according to Chalmers.

The ACTU said in its statement that – given the average worker pays 25 per cent more in tax – this will “take some of the pressure off workers who have been paying a higher proportion of their incomes in tax to fund essential services than asset-rich Australians getting tax breaks”.

“An important feature of the changes the government is making to capital gains tax, negative gearing and tax on discretionary trusts is that the revenue raised will be given back to workers through the Working Australians Tax Offset,” O’Neil said.

“Cost-of-living relief, through the payment of the ongoing tax offset and tax cuts in 2026 and 2027, also put workers first and deliver desperately needed support to those who work for a living – not just those who invest.

“Job saving measures to safeguard our national fuel security with a $14.8 billion package and a new domestic gas reservation are also crucial. The Government has leaned in hard to source fuel supplies from around the region and is spending what’s needed to ensure that Australians get the petrol and the diesel we need to protect jobs and communities.

“Combined with closing loopholes only available to the asset-rich using discretionary trusts, this budget is a major step forward for fairness.”