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It’s just over a week ago now since the Albanese government responded to the distress that young Australians have expressed over a political and economic system in which it feels impossible to get ahead. By making it worse.
The 2026 federal budget is more unpopular than the 2014 Abbott-Hockey “austerity” budget, handed down after Tony Abbott went into the election promising no cuts. Newspoll – conducted on behalf of News Corp by Pyxis Polling, which also works for the Labor Party – found that the latest Labor budget is faring only slightly better than that of 1993, which broke prime minister Paul Keating’s L-A-W tax cut promises.
According to Amplify, a policy development entity which uses citizen juries and consultation, the sense of trust betrayed has coloured the budget’s reception. The organisation, which describes its mission as “restoring Australia’s broken promise” focuses on home ownership as part of the social contract. Using a mix of polling and moderated discussions, Amplify has consulted with 18,000 Australians on major reforms in this area over two years. It found that Australians from all walks of life were by and large supportive of removing negative gearing and reducing the capital gains tax discount to help address what it calls the housing crisis.
Amplify believes the budget has been poorly received for two reasons. First, because the prime minister and treasurer explicitly and repeatedly ruled out changes to negative gearing and capital gains tax before the election. “Trust matters when it comes to reform, and the data shows that trust has taken a hit following this budget,” Amplify CEO Georgina Harrison says. Secondly, because the changes went beyond housing policy.
My own research into the values and aspirations of different “tribes” of young Australians, conducted for the Centre for Independent Studies, was published three weeks before the government “changed position” on negative gearing and CGT. The extensive qualitative and quantitative study of 18- to 34-year-olds found that despite the challenges they face, most remain profoundly aspirational. They want to achieve financial security. And tax is a big issue for them. Even before the budget, 66 per cent of this age group told us they were worried they were going to have to pay more in future.
Andrew, a 21-year-old apprentice I ambushed with a microphone on his lunch break in Parramatta at the beginning of this year, neatly encapsulated the attitude of young working Australians, far from the world of politics and policy. He mainly just wants to make a lot of money over the next five years. “That’s it,” he told me laughingly. “Focus on the money.”
I asked him if there are any people in society who should pay more tax. “Nah,” was his response, “if you’re successful, you’re successful. You shouldn’t have to pay more tax because you’re successful. I reckon there should be just a standard, like, tax you’ve got to pay. Everyone’s got to pay. It shouldn’t be, you know, he gets more money than me, he’s got to pay more tax. It shouldn’t be like that. I don’t want to pay a lot of tax.”
People like Andrew might not have anything more than his meagre apprentice wage right now, but he’d sure like to in future. So it was no surprise to me that the blanket change to capital gains tax has been so poorly received. The prime minister has argued that he’s just restoring the factory settings to 1999, before most of the cohort I surveyed was even born. But that means he’s taking something away from them that others have used to attain financial stability, the overall top aspiration of the age cohort in my CIS polling.
Redbridge Group insights adviser Kristy McSweeney has been conducting focus groups with young Australians in marginal Labor seats, which include participants from diverse backgrounds, to discover how the budget messaging has landed with them. Many of the Gen Zs in her groups have been told by their Gen X parents to invest in the sharemarket because it brings higher returns than bank accounts. “Now they feel like the government has dudded them,” she says. “The package of reforms hasn’t landed the way the government wants it to.”
McSweeney says Millennials and Gen Zs are more aware of the changes in CGT, the share market and how the budget announcements are going to affect their crypto and long-term retirement than they are of the negative gearing changes and how they might affect their chances of buying a house. In her groups, young people from migrant backgrounds are also rejecting the “intergenerational equality” message, which effectively pits young Australians against their elders, she says. “Every generation has its struggle” is a sentiment she hears a lot.
McSweeney says the intergenerational equity framing doesn’t connect with those from less privileged backgrounds. In my research, the 18 per cent of 18- to 34-year-olds who would resonate with this framing are more likely than others to be university-educated and identify as left or far-left. Quantitatively, they have a much keener sense than other groups that “the economic system unfairly favours powerful interests”. Qualitatively, they express resentment against people who have accumulated wealth. But while this sliver of the age cohort may be keen to eat the rich, the remaining four-fifths of young Australians, my research finds, would really rather become them.
Resolve pollster Jim Reed, who polls for this masthead, is keen to emphasise that the government deserves kudos for taking a risk. But, as the government should have learnt from the Indigenous Voice to parliament referendum, in a democracy you can’t just make an announcement – you have to sell it.
The sales job hasn’t been great, so far. In interview after interview, it becomes more apparent that key ministers struggle to explain how tax works. Finance minister Katy Gallagher squirmed painfully through an interview with ABC 7.30’s Sarah Ferguson. By the end of the week, government ministers were leaving the rhetorical door open to reversing course on CGT.
Reed points out that initial emotional reactions quickly crystallise as people look for evidence to support their apprehensions. The government has misread the desires of young Australians and is providing fuel for their apprehensions itself.
Parnell Palme McGuinness is an insights and advocacy strategist. She has done work for the Liberal Party and the German Greens and is a senior fellow at the Centre for Independent Studies.
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Parnell Palme McGuinness is an insights and advocacy strategist. She has done work for the Liberal Party and the German Greens and is a senior fellow at the Centre for Independent Studies. She is also an advisory board member of Australians For Prosperity, which is part-funded by the coal industry.From our partners
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