Federal Budget 2026: Massive majority gives government an opportunity to backflip on promises

There is probably no better time to break a string of election promises than when your government has just clinched a massive 94 seat majority in Parliament and your opponents look like a minor party rabble.

In its fifth budget the Albanese government is ripping up its frequently repeated pledges that it would not touch various measures that have helped generate wealth for millions of Australian investors.

By increasing taxes on capital gains, trusts and negative gearing, while redirecting billions in tax relief to 13 million workers, the government is hoping to ease what it calls “generational anxieties”.

Along with a housing package, the government wants to get many younger Australians into an otherwise elusive housing market.

Just as Labor backflipped on Stage 3 tax cuts before the 2025 election, it’s betting that most voters care more about the benefits of changes than having a government which says one thing during a campaign and does something completely different in office.

The Opposition will rightly point to the string of broken promises and accuse Labor of lying, but the Government believes the recent winding back of inland rail promises and its earlier backflip on Stage 3 tax cuts shows public outrage is limited.

The other factor looming over this budget is the Iran war, which began in late February as the US and Israel launched strikes against the Islamic regime in Tehran.

Labor knows that most voters blame Donald Trump for the higher oil prices and cost of filling up their cars, and Australia is not alone in dealing with the economic fallout from the war.

The Treasurer says the budget he’s handing down tonight looks quite different to the one he and Finance Minister Katy Gallagher had anticipated at the beginning of the year, but they insist they’re not shirking big calls.

“We haven’t used the developments in the Middle East to delay the necessary reforms in the economy,” the Treasurer argues.

“We didn’t decide when this war began and have no control over when it will properly end. But how we respond is up to us.”

Budget week in Parliament has already begun with a large focus on the Opposition, which is still licking its wounds from a devastating loss in the Farrer by-election on Saturday.

New Opposition Leader Angus Taylor will need to improve his performance greatly if he is to land a significant hit on Labor over its budget, but so far keeping a divided coalition together is proving a bigger immediate challenge.

In any case the Treasurer is foreshadowing the attacks he will now face, claiming “scare campaigns and lies will be told” about Labor’s massive tax changes.

The next election is due in around 18 months-time and tonight’s budget confirms much of Labor’s projected spending and voter sweeteners will come into effect around that time.

A budget formed against the backdrop of a massive oil shock from a foreign war, has also given a government accused of standing for nothing a chance to boldly break promises.