Bank expects home price reduction from budget to be more than twice government forecast
Contentious tax changes will have a larger drag on home prices than the government forecast in the budget, according to analysis from Australia’s largest lender, reported by Australian Associated Press.
Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by 5%, compared with Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.
A slowdown in the property market was already under way before the budget due to global uncertainty and rising interest rates.
But the quick response to the tax changes suggested the near-term impact will be sharper than expected, the duo said in a research note on Wednesday.
“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”
Analysts still expects the Reserve Bank to hike interest rates one more time in August, despite Australian Bureau of Statistics data showing a slowdown in Australia’s economic growth rate in the March quarter.
The trade minister, Don Farrell, has pushed back on Donald Trump’s latest round of sanctions, telling his US counterpart the targeting of Australian imports is unjustified.
Australia is among dozens of countries facing a 12.5% trade tariff from the Trump administration for allegedly failing to prevent imports of goods made by slave labour.
Farrell is in Paris this week leading Australia’s delegation at the OECD Ministerial and met with the US trade representative, Jamieson Greer.
Farrell used the talks to reinforce Australia’s position that any tariffs are unjustified and that Australian has a robust legislative framework and a world-leading approach to addressing modern slavery
These tariffs would replace the US global 10% Temporary Import Surcharge when it expires on 24 July this year.
Australia understands the latest announcement is just a proposal from the US not a determination.
Key Australian exports that have previously been exempt from tariffs are still exempt from these proposed tariffs - including beef and gold.
Coalition and One Nation ‘moulding into one point of view’ says Albanese
Anthony Albanese isn’t looking at a radical shift in the Labor party to counter the growing influence of One Nation, despite support for the minor right wing party surging amongst women and city voters – according to new polling in Nine Newspapers.
Albanese claims the Liberals, Nationals and One Nation are “openly discussing being a right-wing partnership”. While speculation has been rife, when asked, members of each party say said they wouldn’t form a coalition with the other side.
Recently, Labor MPs have said its up to the government to highlight the “risk” of Pauline Hanson and her policies to the cost of living.
But Albanese takes a broader stance:
The Liberals, the Nationals, and One Nation are openly discussing being a right-wing partnership. Increasingly, we see them mould into one point of view.
For the Labor Party, we will always give voters respect and we’ll always look towards how we can deliver higher wages, how we can decrease their income taxes, how we can be a party of reform.
Australian dream shouldn’t only be in history books, says Albanese
Anthony Albanese says Angus Taylor and his Coalition will have a clear choice today to vote for tax cuts or oppose them – as they did on Labor’s tax cuts ahead of the last election.
Albanese has been facing an uphill battle trying to sell Labor’s budget both inside and outside parliament, despite pitching it as a game-changer for young people to get into the housing market.
He says that the Senate inquiry looking at the legislation will soon report back, which will be considered by the government.
We are engaging respectfully, as we always do, right across the parliament. My door is always open, as is the door of the treasurer and our Senate team. Of course, we will have the inquiry before the Senate sits in a few weeks’ time. That will be an opportunity as well for people to put forward their views, and we welcome that.
I don’t want the Australian dream to be something that is written about in history books of owning your own home. I want everyone to have that opportunity, aspiration.
Australian prime minister Anthony Albanese. Photograph: Lukas Coch/EPA
‘Ideological disagreement’ with the US on tariffs: Albanese
Anthony Albanese says new tariffs from the US on Australian goods announced yesterday are “unwarranted” and that the government has made its position on tariffs clear.
Speaking to the ABC’s AM program, he says no notice was given and that Australia has “robust, comprehensive and world-leading legislation addressing forced labour and modern slavery”.
Albanese says Australia hasn’t been singled out in this latest round – 54 countries have been included on the US’s list.
It seems there is an ideological disagreement where the United States administration has broken with what was decades-long understanding that tariffs are not positive for the country that is imposing them, that they increase the costs of goods and services in the country that is applying them to its consumers, and that free trade is in the interest of the global economy.
We continue to use every opportunity that we have to advocate that US tariffs imposed in Australia are unwarranted.
Watt ‘confident’ tax legislation will pass parliament
The environment minister, Murray Watt, says the government is confident that the crossbench will support the government’s contentious budget bill after it passes through the House (likely today on Labor’s timeline).
Watt sits in the upper house which is where the government doesn’t have the numbers and will need at least the Greens support.
Speaking to the Today show earlier alongside Nationals frontbencher Bridget McKenzie, Watt says it’s “not unusual” for different parties to put forward different positions in the lead-up to legislation:
We’re confident, at the end of the day that the crossbench will see that our budget and legislation is about tax cut to every single working Australian.
Murray Watt. Photograph: Mick Tsikas/AAP
McKenzie says she has some serious issues with the discretionary powers for the treasurer in the legislation.
It screams that they’re a bit like not letting us know what their plans were heading into the budget with the taxes they were going to impose that they don’t want to bring that to the parliament. And so they’re leaving that in Jim Chalmer’s back pocket for him to change at a later date …
The fact that you’re thinking that crashing the housing market is the solution to the housing [crisis].
Good morning, Krishani Dhanji here with you for the final day of the sitting fortnight, thanks to Martin Farrer for getting us started.
The government expects its contentious budget legislation to pass through the House today – it’s not a terrible assumption seeing they have a huge majority but we can expect lots of amendments and divisions from the opposition and crossbench that will drag the vote out.
The government will have a much trickier time getting the Greens over the line when that legislation reaches the Senate. The Greens have concerns over the government’s sweeping discretionary powers in the bill.
We’ll also be keeping a close eye on estimates today and we’ll bring you that as it comes.
I’ve got my coffee, I hope you’ve got yours, let’s get cracking!
Australia’s youngest convicted murderer has been handed more time behind bars after a judge found him to have had complete disregard for his release conditions, Australian Associated Press reports.
The man, known for legal reasons as SLD, has spent almost two-thirds of his life in jail after the then 13-year-old abducted and fatally stabbed his three-year-old neighbour Courtney Morley-Clarke on the Central Coast in 2001.
The now 39-year-old pleaded guilty to five counts of breaching his supervisory orders and two charges relating to child abuse material.
The 39-year-old will be eligible for parole in March 2028.
“The reality is that … he cannot last long in the community without breaching the terms of his extended supervision order,” Judge Johnson said in Campbelltown district court yesterday.
The sentence took into account a mandatory minimum of four years’ imprisonment for a repeat child sexual offence, the first being his 2002 murder.
The judge also remarked that, since the age of 13, the defendant had spent all but four months behind bars.
Bank expects home price reduction from budget to be more than twice government forecast
Contentious tax changes will have a larger drag on home prices than the government forecast in the budget, according to analysis from Australia’s largest lender, reported by Australian Associated Press.
Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by 5%, compared with Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.
A slowdown in the property market was already under way before the budget due to global uncertainty and rising interest rates.
But the quick response to the tax changes suggested the near-term impact will be sharper than expected, the duo said in a research note on Wednesday.
“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”
Analysts still expects the Reserve Bank to hike interest rates one more time in August, despite Australian Bureau of Statistics data showing a slowdown in Australia’s economic growth rate in the March quarter.
Good morning and welcome to our live politics blog. I’m Martin Farrer with the top overnight stories and then it will be Krishani Dhanji with the main action.
Australia’s youngest convicted murderer has been sent back to jail after a judge found him to have had complete disregard for his release conditions. The man, known only as SLD, stabbed to death his three-year-old neighbour Courtney Morley-Clarke on the Central Coast in 2001. More coming up.
And expect more debate today over the government’s plan to change capital gains tax and negative gearing. The Commonwealth Bank is forecasting they will make house prices 5% lower than they otherwise would have been – more than twice the difference that Treasury had modelled.
<small>Source: The Guardian</small>
