Former Treasury secretary Ken Henry has warned that younger Australian workers will shoulder an increasing share of the nation’s tax burden under the Federal Government’s 2026 budget settings.
According to analysis of the budget forecasts, income tax contributions are expected to rise from 45 per cent to 47.5 per cent of total tax revenue over the next four years, with critics arguing the growing reliance on worker taxation will disproportionately affect younger Australians already facing housing affordability pressures, stagnant wages and rising living costs. The budget introduced several reforms including changes to capital gains tax concessions, negative gearing rules and family trust taxation, alongside new worker tax offsets and deductions aimed at easing cost-of-living pressures.
Supporters of the reforms, including Treasurer Jim Chalmers and Prime Minister Anthony Albanese, say the measures are designed to improve intergenerational fairness and help younger Australians enter the housing market. However, critics from business, investment and entrepreneurial sectors argue the changes may discourage investment, innovation and wealth creation, particularly among younger founders and workers. Online discussion around the budget has also reflected growing concern about “bracket creep” and long-term tax pressures on younger generations, with many commenters arguing the reforms do not go far enough to rebalance Australia’s tax system.
