By Rachel Waterhouse, CEO, Australian Shareholders’ Association
The 2026/27 Federal Budget included several measures relevant to investors, including proposed changes to capital gains tax, negative gearing and discretionary trusts.
I attended the Federal Budget stakeholder lock-up on behalf of ASA, which allowed us to review the Budget papers and provide members with an ASA Insight on the evening of the announcement. The trip to Canberra also provided its own small lesson in communication. My train was delayed by more than an hour after a freight train broke down ahead of us. It was not quite the start I had planned, but the regular updates from NSW TrainLink made the wait much easier and were a timely reminder that clear communication matters when people are waiting for answers.
That is also true for investors.
The most significant tax announcement for many shareholders was the proposed replacement of the current 50 per cent capital gains tax discount with inflation-adjusted indexation, alongside a 30 per cent minimum tax on net capital gains from 1 July 2027. The Government has said the CGT reforms will only apply to gains arising after that date.
The Budget also proposed limiting negative gearing for residential property to new builds from 1 July 2027, while existing arrangements will remain unchanged for properties held before Budget night. A minimum 30 per cent tax on discretionary trusts is proposed from 1 July 2028, with some exceptions and three years of rollover relief from 1 July 2027 to assist those who wish to restructure.
The final operation of these measures will depend on the draft legislation and any transitional rules.
For ASA, the central issue is whether these changes support confidence, certainty and long-term investment. Many Australians invest directly and indirectly through shares, ETFs, listed investment companies, managed funds and superannuation. They need policy settings that are clear, stable and practical to comply with.
Ahead of the Federal Budget announcement, when speculation about possible CGT changes was already circulating, ASA asked investors how reducing or removing the current 50 per cent CGT discount on shares might affect their approach. The Australian Shareholders’ Association Investor Sentiment Survey was conducted ahead of the Federal Budget on Tuesday 12 May and received 878 responses to this key question.
Of those, 42.4 per cent said such a change would make them less likely to invest long term in shares, while 33.5 per cent said the impact would depend on the details. A further 17.4 per cent said it would not change their approach, and 6.7 per cent said they would support changes to the current system.
The result shows why the detail matters. More than three-quarters of respondents, 75.9 per cent, said a reduction or removal of the CGT discount would either make them less likely to invest long term in shares, or that the impact would depend on the final design.
Since Budget night, members have continued to share their views through emails, direct conversations and local member meetings. At least four local member groups have discussed, or plan to discuss, the Budget measures and provide collective feedback to ASA. Your input helps ASA understand the real-world impact of the proposed changes on investors, and will support our advocacy as the legislation develops.
Members are asking what the changes could mean for younger investors, retirees, portfolio rebalancing, estate planning and family structures. Many younger Australians are using shares and ETFs to build wealth outside property. Retirees and people nearing retirement may hold long-standing investments and need confidence when planning income, tax and succession.
ASA recognises the importance of housing affordability, intergenerational fairness and budget sustainability. However, major tax changes must be carefully designed, clearly communicated and properly consulted on before legislation is passed. Reform should not discourage long term share ownership, penalise sensible portfolio decisions or create unnecessary complexity for ordinary investors.
ASA will continue to seek member feedback as draft legislation and further details become available, so our advocacy is shaped by member experience, concerns and long-term investment perspectives.
For members, the key message is to stay informed and avoid rushed decisions. Tax is important, but it is only one part of an investment decision. Investors should consider their own circumstances and seek professional advice where appropriate.
The Budget announcement has started an important stage in the policy process. The final design will determine what it means in practice for shareholders, investors and Australians planning for the long term.
