PENSIONS, NDIS TOP EXPENSES; GAS REPRIEVE

Pension support to cost $68 billion as NDIS costs to stabilise

The Federal Government’s Support for Seniors program, forecast to cost more than $68 billion, will be the highest single federal spending program in 2026-27, according to Budget papers.  Expenses of the pensioner assistance program will rank ahead of the National Disability Insurance Scheme, where expenses are due to rise to $56 billion, before stabilising in future years. Aged care services are due to cost $43.7 billion, ahead of medical benefits at $37.5 billion, and assistance to the states for health care services ($37.4 billion). Commonwealth debt management – or servicing of debt – is due to cost $31.8 billion in 2026-27. Outside the nominated programs, the Commonwealth will provide $110 billion in revenue assistance to the states and territories.

NDIS costs grow by 11 per cent over year

As the Federal Government moves to rein in growth of NDIS spending by almost $38 billion over four years, new figures reveal the cost of the NDIS grew 11.3 per cent in the 12 months to March 2026. The National Disability Insurance Agency’s quarterly report reported more than 774,000 participants in the scheme, including around 10 per cent of children aged between five and seven. It also noted that the NDIA’s Fraud Fusion Taskforce had received 88,000 tip-offs since it was formed in November 2022, with more than 2,500 “problematic providers” being removed. For the first nine months of 2025-26, NDIS expenses were $38 billion. Budget papers for 2026-27 project a reduction of growth in NDIS payments by $37.8 billion over the next four years, via reforms outlined last month by Health and NDIS Minister Mark Butler.

Treasurer’s olive branch to start-ups on CGT changes

Federal Treasurer Jim Chalmers says he is open to discussions with the technology sector on the application of the revised capital gains tax (CGT) regime for start-up companies. Dr Chalmers told a post-Budget media interview that the government recognised that start-ups and venture capital, particularly the technology sector, had a different kind of calculation of their cost base for CGT. He said the sector had a “different case”, and it was not unusual for government to consult on implementing big tax changes. The Federal Budget announced major changes to the capital gains tax regime, including the replacement of the 50 per cent discount with inflation-adjusted indexation.

Taylor vows to index tax thresholds to inflation

Meanwhile, Federal Opposition Leader Angus Taylor has pledged to index tax thresholds to inflation if he is elected to government in 2028. In his budget address-in-reply, Mr Taylor said a Coalition government would initially index the bottom two income tax thresholds to inflation, before indexing the top two tax thresholds as well. He told Parliament that the changes would fully protect all income-earners from inflation. In addition, he promised big cuts to migration numbers, with immigration targets linked to the number of homes constructed each year.

No winter export gas export controls, says King

Resources Minister Madeleine King says she will not implement gas market export controls this winter, based on exporters’ assurances that they would supply sufficient gas to meet east coast demand. In April, Ms King gave notice of her intent to consider using powers under the Australian domestic gas security mechanism in a bid to fill potential gas shortfalls over the third quarter. Ms King said all east coast gas storage facilities were at or near 100 per cent full. Earlier this month, the Federal Government flagged a domestic gas reservation scheme that would apply from July 2027 and require gas exporters to supply a proportion of their total production to the Australian market.

Annual wages growth eases to 3.3 per cent

Wages rose by 3.3 per cent over the year to March, easing slightly from 3.4 per cent in the previous quarter, according to the latest figures from the Australian Bureau of Statistics. The ABS Wage Price Index rose 0.8 per cent, seasonally adjusted, over the March quarter. Over the 12-month period to March, the Consumer Price Index recorded an annual rate of inflation of 4.6 per cent. In the latest survey, private sector wages rose 0.8 per cent, seasonally adjusted, and the public sector 0.5 per cent, over the quarter. Health care and social assistance was the largest industry contributor to quarterly wages growth.