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The federal budget, a financial plan in the cloud of the Middle East war, has little direct impact on advertising and media.
However, the budget's effect on the economy, consumer confidence and the flow of money will be felt by the industry.
Analysts see this as a budget in a crisis, and there are potential knock-on or flow-on effects.
And this means inflation.
“Pouring more money into the economy, which the budget does, will do the opposite of what the RBA through monetary policy (aka RBA cash rate) is trying to do,” said media analyst Steve Allen at Pearman.
“Inflation was once a friend of advertising. No longer. Worse, it seriously dampens client confidence, and with the petroleum supply shock, has caused Morgan Business Confidence (April 2026) to plummet to its lowest level on record, to 76.5 down 14.2 points.
“This Federal budget will do nothing to reverse this.
“As the Morgan Research poll found…the net proportion of businesses expecting ‘good times’ for the economy over the next year plunged a large 26.7% points.
This budget does nothing to arrest or reverse that.”
Macquarie analysts say the changes to capital gains and negative gearing will reduce the attractiveness of property investing.
They estimate the changes will more than double holding costs and reduce investor borrowing power by 10% to 20%.
“This is likely to see slower house price and credit growth, which could weigh on bank earnings and share prices,” the analysts say.
Housing credit growth could slow to around 4% from 7%, not far from the all-time low of 3% in 2019.
Goldman Sachs analysts expect house prices growth to fall 5% over the next 12 months.
“The flagship policy of the budget is tax reform in the housing sector – specifically, changes to reduce the favourable tax treatment of capital gains and to limit ‘negative gearing’.
“The changes are intended to reduce the attractiveness of established housing as an asset class for investors and thereby improve access and affordability of housing for first home buyers.
“In our view, the introduction of generous ‘grandfathering’ provisions risks undermining the goal of improving intergenerational equity to the degree they ‘lock in’ the old favourable tax regime exclusively for those older/wealthier Australians who already have investment properties.
“In contrast, younger Australians seeking to build wealth through investment now face a meaningfully less generous capital gains tax regime.
“Notwithstanding a one-year grace period before the housing policies' full implementation, we expect the tax changes to weigh on an already weakening housing market.”
Mark Thirlwell, the chief economist at the Australian Institute of Company Directors, describes the budget as an exercise in crisis management and the art of plate spinning.
“Budget 2026 is an ambitious effort to deliver progress on multiple fronts given the constraints facing the treasurer,” he said.
“The efforts to boost productivity and improve regulatory settings are welcome. Progress on budget repair is meaningful, but reliant on windfalls from ‘parameter variations,’ and assumptions about NDIS savings and limited payment growth rates.
“The changes to the tax system advance an agenda that has been outstanding for many years, albeit at the potential cost of greater complexity and some attrition to public trust given the breaking of election promises.
“They also fall well short of any ideal ‘tax reform wish list’, limiting their overall productivity impact.
“Meanwhile, the outlook remains hostage to a deeply fragile global economic, financial and geopolitical environment.”
The plates in motion include: Getting through the global oil shock and building resilience; Taking the pressure off people; Making the economy more productive to lift living standards over time; Reforming the tax system for workers, businesses and future generations; Making the budget stronger, more sustainable, and helping take the pressure off inflation by saving more.
A productivity and investment package: This promises to: cut regulatory costs by $10.2 billion every year; reduce compliance costs in the financial sector; advance the government’s plan to build a Single National Market by driving harder on National Competition Policy reforms; and implement measures to make government easier to deal with, including a ‘tell us once’ approach.
A tax reform package: This limits negative gearing for new residential property builds from July 2027; replaces the 50% capital gains tax discount with cost base indexation and a 30% minimum rate (applying from July 2027, with new builds able to retain the old discount); and introduces a minimum 30% tax rate on discretionary trusts from July 2028.
Deloitte’s summary:
- No further individual tax cuts announced
- A new $250 Working Australians Tax Offset
- Negative gearing will be limited to new residential buildings from July 2027
- The 50% capital gains tax discount for individuals and trusts will be replaced with cost base indexation and a 30%minimum tax rate on capital gains
- A minimum tax of 30% on distributions from discretionary trusts will apply from July 2028
KPMG's summary by demographics:
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