NSW Police were called to a children’s netball game in Maroubra on Saturday due to a “deeply distressing” incident, after a mother allegedly hurled an antisemitic slur at a Jewish team.

Police went to Heffron Park, Maroubra, just after 10am following reports that a woman had made “offensive comments” during an under 12s match between Maccabi Netball Club and Saints Netball Club.

Community leaders have condemned an antisemitic incident at a netball game.Janie Barrett

Several Maccabi parents who were at the game told the Herald that a mother from the Saints team said, “F--- the Jews”, followed by “they should have all been eradicated”.

The slur was made in front of a Jewish mother who gave evidence to the royal commission during the week. The mother said it was “shocking that people feel emboldened to say comments like this”.

Executive Council of Australian Jewry co-chief executive Alex Ryvchin, who arrived at the courts shortly after the incident, said the abuse allegedly happened in “plain sight”. Apparently, “it wasn’t muttered under the breath”, Ryvchin said.

“This sort of thing like it seems trivial, but it has an impact,” he said. “It’s not just words; it affects how [Jewish children] view themselves, their Jewish identity and their place in society.”

Officers from Eastern Beaches Police Area Command confirmed they had spoken to a 42-year-old woman and issued a move-on direction. Police said inquiries were continuing.

In a statement to club members, Adam Dinte, president of Maccabi Netball Club, called the incident “completely unacceptable”.

Alex Ryvchin said children were deeply affected by antisemitism.Wolter Peeters

“We are aware of a deeply distressing antisemitic incident that occurred at a netball game today involving Jewish players and families from our club,” Dinte said. “We are taking this matter extremely seriously.

“Maccabi NSW is communicating with NSW Police and the Community Security Group [CSG]. We are also writing a formal letter of complaint to the Randwick Netball Association and the opposing club.

“Jewish players, parents, coaches, administrators and supporters have the right to participate in community sport safely and confidently, free from racism, abuse, intimidation or vilification.”

Dinte told the Herald that the young netball team was deeply distressed after the incident. “One of the girls in our team after the game told her mother that she wanted to take her uniform off because she didn’t want to be identified as Jewish, and didn’t feel safe,” he said.

The alleged confrontation comes just days after the Royal Commission on Antisemitism and Social Cohesion began its hearings.

This week, former High Court judge Virginia Bell heard evidence from the Jewish community, including 86-year-old Seafolly co-founder and Holocaust survivor Peter Halasz, who testified that the rise of antisemitism was no longer “a faint echo of a distant past”. He described the current climate as “frightening”.

A statement from Saints Netball Club said that it was aware of the alleged incident and stressed that it “unequivocally condemns and disavows antisemitism in all its forms”.

“Such remarks do not reflect the values, principles or standards of our club, our members, our players or our wider community,” the statement said.

“The Saints Netball Club offers our sincerest and most unreserved apologies to the Jewish community.”

The general manager of Maccabi Australia, the umbrella body of Australian Jewish Sport, David Goldman, said the incident was “tragic and disturbing” but was not isolated.

He noted that a recent survey of 670 Maccabi members found nearly one in two respondents had either witnessed or experienced antisemitism in sport. “This isn’t isolated to Sydney, and it’s not isolated to netball. It’s occurred across other sporting codes, and we’ve seen certainly a spike in incident since October 7,” Goldman said.

Maccabi Australia chief executive Mandy Penkin said the alleged incident was “horrifying” but “unsurprising”.

“It’s just absolutely shocking that in a country like Australia, at an under-12 netball game, that kids should not feel comfortable to play sport wearing the Jewish colours for fear of being abused,” Penkin said. “The fact that we see it pop up so often is heartbreaking.”

David Ossip, president of the NSW Jewish Board of Deputies, said the incident must be “swiftly investigated” and there must be no tolerance for racism and discrimination. “Sport is all about bringing people together. Children’s sport, in particular, should be a place of respectful competition and friendly exchange where kids should feel welcome and comfortable – regardless of background.”

Randwick Netball Association has been contacted for comment.

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Resets, reforms and pure politics are about to about to rock Australia’s deeply flawed migration system.

Paul Kelly

11 min read

May 9, 2026 - 12:00AM

Immigration as a substitute for productivity means wages and living standards have languished, leading to an impatient, disillusioned and angry public mood.

Immigration as a substitute for productivity means wages and living standards have languished, leading to an impatient, disillusioned and angry public mood.

For much of the current century Australia has conducted an immigration experiment almost unique among developed nations – but the flaws in our model have guaranteed an electoral backlash with resets, reforms and pure politics about to rock the system.

Consider the big picture. Over 2000 to 2024 Australia’s population, heavily driven by immigration, has grown by 42 per cent, an astonishing figure nearly three times the average growth of OECD industrial nations.

This percentage increase is around twice that of the US and Britain and is ahead of other strong immigration countries such as Canada and New Zealand.

At the same time there has been a revolution in people movement to Australia – it is now dominated by temporary visa holders, not the long-established and prized permanent immigration program running this year at 185,000.

Protesters and counter-protesters confront each other during an anti-immigration rally in Melbourne. Picture: William West / AFP

Protesters and counter-protesters confront each other during an anti-immigration rally in Melbourne. Picture: William West / AFP

Just 20 years ago Peter Costello as treasurer said: “Australia has never been a guest worker country. We’ve never been a country where we bring you in and ship you out. I don’t think Australians want to see that.” But current policy and practice heads in that direction. The permanent immigration intake most people have known for most of their lives is now sidelined by another model – a temporary model with temporary migrants now embedded across the economy.

The Menzies Research Centre reports there are now about 2.9 million temporary migrants in Australia, about 10 per cent of the current population of 28 million.

The main category is international students, now running at about 515,000 – and that’s a reduced level – with some of our best universities having nearly 50 per cent of their enrolments being overseas students.

The other remarkable feature in our immigration legacy is that 32 per cent of our population, or 8.8 million people, have been born overseas, according to the Australian Bureau of Statistics. Indeed, the 2021 census showed that more than half of Australian residents, 51.5 per cent, were born overseas or had one parent born overseas. This figure would be even higher today.

The comparable foreign-born figure for the US is only 14 per cent, less than half Australia’s, with the US often wrongly mistaken as being a stronger migrant nation than Australia. In truth, there is no comparison. The average foreign-born percentage for OECD nations is also 14 per cent, far below our figure.

Indian-born residents now make up 971,020 of the 8.8 million people in Australia who were born overseas. Picture: NewsWire / Nadir Kinani

Indian-born residents now make up 971,020 of the 8.8 million people in Australia who were born overseas. Picture: NewsWire / Nadir Kinani

Taking the easy road to economic growth

All the above results reveal a sustained transformation in Australia’s society, culture and economy. While migrants are indispensable to our labour market, over the past decade our GDP growth has been driven by population, not productivity, a decisive event. The nation has taken the easy road to economic growth and is paying a devastating price – immigration as a substitute for productivity means per capita income – that is, wages and living standards – has languished, leading to an impatient, disillusioned and angry public mood.

Australia’s immigration story runs far in advance of most other nations and drives social change at a rapid rate. Many people celebrate such diversity; many others believe that Australia’s character and values are being lost. Both feelings demand respect.

Immigration is in overreach. It faces multiple problems, the result of weak management and lack of vision. Recent numbers are too high, the skills program demands a reset, growth in temporary migration is unsustainable and devoid of policy control, while there is rising concern about the values set of a minority of the intake.

Pauline Hanson’s One Nation continues to draw support from voters disillusioned with the major parties. Picture: NewsWire / Martin Ollman

Pauline Hanson’s One Nation continues to draw support from voters disillusioned with the major parties. Picture: NewsWire / Martin Ollman

This situation has created an inexcusable gift to Pauline Hanson, courtesy of the Albanese government. Labor deserves much of the blame and should be held to account. Hanson has captured the wave of concern about immigration with polls over the past six months (Newspoll, Resolve Monitor, the Lowy Institute and the Institute of Public Affairs) all showing majority support for a lower intake and sentiment in the plus-50 per cent to 65 per cent zone to cut numbers.

Immigration turning point

Many Western nations now face a turning point in their immigration policies. While the foundations of Australia’s program are stronger than those of most nations, a showdown is coming. The real issue is whether changes will be modest or radical or sensible. The worst mistake the pro-immigration progressive movement can make is to pretend nothing is wrong and that such criticisms are merely racism, a denial sure to be counterproductive.

The coming collision is driven by three simultaneous and inflammatory factors. The biggest is the housing crisis with many young people priced out of the market, feeding intergenerational frictions. Labor is now promoting tax changes in next week’s budget, while Angus Taylor tells Inquirer that immigration will be a “key feature” in his reply to the budget.

“You cannot bring people to this country if you don’t have the houses for them. It’s that simple,” the Opposition Leader says.

“Migration levels must be capped by the availability of housing. That’s common sense but it’s not what we have seen. Labor has done the opposite with an unpreceded escalation in immigration numbers, yet housing supply has gone backwards.”

Angus Taylor is set to unveil a new Coalition immigration policy linking migration to housing supply. Picture: NewsWire / Martin Ollman

Angus Taylor is set to unveil a new Coalition immigration policy linking migration to housing supply. Picture: NewsWire / Martin Ollman

Taylor says the ratio of migrants to housing is running double over the previous figure. He says: “The situation is unsustainable and it’s no wonder young Australians can’t get into a home. For the year we are going into, they are running immigration numbers 80,000 above the targets and housing 70,000 a year below the targets. And Labor’s answer is to put more taxes on it. Seriously, who thought that up?”

He will attack Labor’s intergenerational tax changes by saying the real problem is immigration. Taylor’s pledge to cap migration flows by housing availability points to a decisive shift in immigration policy and politics. It follows a similar move by Canada that cut migration numbers and foreign students in a desperate bid to reduce housing costs – the result has been a shrinking population with benefits for the housing market and affordability but with related evidence that high migration was not the sole cause of the problem.

The second factor in Australia’s political debate has been the immediate leap in the net overseas migration numbers with the border opening after the Covid freeze. The NOM hit 538,340 in 2022-23 and 429,000 the following year. These numbers received massive and damaging political prominence, but they measure all arrivals and departures and should not be confused with the formal policy. The government is desperate, given the political optics, to cut them but the task has proven difficult, Jim Chalmers has conceded the current planned reduction to 225,000 won’t be reached.

Social cohesion is fraying

The third element has been the erosion of social cohesion with an entrenched antisemitism that repudiates our multicultural ethic and that culminated in the Bondi massacre of 15 people and the creation of the royal commission.

The Middle East conflict has resounded in this country with pro-Palestinian protests, open support for pro-Hamas terrorism, attacks on Jewish people and almost free licence given to radical Islamists and preachers endorsing violence against Jews – events that have led to a profound rethink within conservative politics in this country.

In his recent Australian Values Migration Plan, Taylor, after declaring his support for immigration, said people with the “wrong motivations” who had “subversive intent” were being allowed entry. The upshot is that Australians “can see the country they love changing for the worse”.

The Middle East conflict has resounded in this country.

The Middle East conflict has resounded in this country.

Taylor says the nation cannot discriminate on nationality, race, gender or faith but must now discriminate “based on values”. He says migrants from liberal democracies have a greater likelihood of subscribing to our values – a claim that has provoked criticism and poses implementation difficulties.

In truth, reform of both numbers and of standards is a diabolically challenging mix. The apparent success of Hanson’s populist anti-immigration campaign complicates the task, given that Hanson polarises opinion. Taylor needs to win back voters from One Nation yet also differentiate the Liberals from One Nation. While One Nation is seen in the polls as the party best able to manage immigration, its real position is to throttle immigration in a way guaranteed to damage the country.

The multiple defects in the current immigration agenda have provoked multiple solutions – even from established champions of the program. Commentator and former senior immigration official Abul Rizvi said last month: “Three million temporary entrants are incompatible with the size of the current permanent intake.”

Immigration specialist and Australian National University emeritus professor of demography Peter McDonald has recently produced, along with ANU Migration Hub director Alan Gamlen, a blueprint for major change, warning that the growth in the temporary intake must be curbed and stabilised.

Former Victorian Liberal Party president Michael Kroger claims the problems with housing in Australia are “too much regulation” and “mass immigration”. Mr Kroger told Sky News host Rita Panahi that housing is “regulated to death”. “Too much regulation on housing and too much mass immigration; they’re the problems with housing today.”

McDonald tells Inquirer: “We think the temporary population needs to be managed and stabilised. It’s about 1.7 million and there’s a tendency to think it’s going to go away. But this population is embedded in the economy. We estimate there’s roughly half a million temporary migrants working in skilled jobs. Temporary migrants are a high proportion of the labour force in aged care. We need to recognise we have an ongoing temporary population, not ignore it, which is the current kind of policy.

“We sleepwalked into this situation. Over the last 20 years both Labor and Coalition governments have made various changes leading to the temporary population continuing to grow. This country has a history of saying migration should be permanent only, so if we are going in this direction then we need to plan for our temporary population.”

In a recent analysis, Nico Louw from the Menzies Research Centre says the key to reducing immigration numbers lies in the temporary migrant category. The permanent program at 185,000, split between the skilled and family streams, is “only a small part” of the immigration story.

Temporary migration comprises students, working holiday makers and visitors. But international students dominate, with many staying for years and a significant number becoming citizens. Getting the temporary numbers down needs action on both sides of the equation – limiting arrivals and increasing departures.

Louw argues public sentiment is changing decisively on immigration: “Australians have historically been more willing to accept higher levels of legal migration when they believe the government has control of the borders” – this is the legacy of the border controls of the Howard and Abbott governments – “but this relationship has broken down, as legal migration surged at the same time as a rising cost of living, high housing costs and a sense of fragmenting social cohesion.”

Australia’s university sector is moving towards a likely crisis over the reduction in international students.

Australia’s university sector is moving towards a likely crisis over the reduction in international students.

In January this year official figures show there were 515,717 international students in Australia, a fall on the previous year, with China comprising 23 per cent and India 17 per cent. Before the 2025 election both Labor and the Coalition focused on lower student numbers in their efforts to return immigration overall to its pre-pandemic levels.

Australia’s university sector is moving towards a likely crisis over the reduction in international students, a cohort vital in delivering revenue for the higher education sector. The university sector has been stunningly incompetent in managing its interests and its image with the public and the political class in recent years. Having enjoyed, along with the mining industry, a generation of national income success wired into the Chinese market, the message now being sent is one of retreat.

The government is driven by the politics and the reality that, if reductions in numbers are essential, then the student intake is the obvious target. Whether Labor has the nous to protect the export industry, reduce the numbers and manage the consequences is doubtful.

The wider migrant story is the dominance of India and China. Recent official figures reveal the explosion of migrants from India with our Indian-born numbers now numbering 971,000, more than doubling over the past decade. India has now replaced England as the largest source nation of foreign-born residents. Chinese-born migrant numbers are 731,000, another substantial increase over the decade.

Children aboard the post WWII Sitmar liner, Fairsea, which made several journeys to Australia under the International Refugee Organisation from 1949 to 1951, carrying displaced persons affected by the war. Picture: National Archives of Australia

Children aboard the post WWII Sitmar liner, Fairsea, which made several journeys to Australia under the International Refugee Organisation from 1949 to 1951, carrying displaced persons affected by the war. Picture: National Archives of Australia

Australia, courtesy of immigration, has rapidly turned into one of the world’s most culturally and linguistically diverse Western nations. The 2021 census showed that one in four people (23 per cent) spoke a language other than English at home, the most common being Mandarin and Arabic. A total of 872,000 people self-reported speaking English “not well” or “not at all”.

Too much of the current debate ignores the Australian fertility crisis and the indispensable role of immigration in our tight labour market filled with job vacancies. Our current fertility rate has fallen to 1.42 compared with the 2.1 replacement level – this means the Australian people are deciding they have no economic option but a strong, ongoing immigration program.

But that program demands reform in our economic interests.

Former Treasury secretary Martin Parkinson, who reviewed the program in 2023, found that almost half of permanent migrants work below their skill level, despite one in three occupations facing worker shortages. The skills mismatch undermines both our economy and the immigration program. It needs to be urgently addressed.

Analysing the economics of the program, University of NSW Scientia professor Richard Holden tells Inquirer: “Australia has historically focused too much on GDP and too little on GDP per capita. It’s the latter which is the right measure of living standards. Immigration mechanically boosts GDP, but only boosts GDP per capita if immigrants are more highly skilled than average, or fill gaps in the labour market that aren’t being met domestically.

Home Affairs Minister Tony Burke’s department has been called to develop ‘a better picture of temporary migrant outflows’. Picture: NewsWire / Martin Ollman

Home Affairs Minister Tony Burke’s department has been called to develop ‘a better picture of temporary migrant outflows’. Picture: NewsWire / Martin Ollman

“The other element of confusion on immigration concerns temporary immigration. This can also be economically and socially valuable, but we must focus on steady-state levels, not the large outflows or inflows that occurred around the time of the pandemic. The Department of Home Affairs needs to make more accurate forecasts and a key element of this is developing a better picture of temporary migrant outflows. The quality of our national discussion about migration would be vastly improved and more constructive if we had accurate numbers.”

Yet there is a bigger issue because immigration is not just a policy. By definition immigration changes a nation because it changes numbers, people and culture. This is a decisive political event. The question then becomes: is it possible to substantially reform an immigration program that has become an integral component in our national identity?

This is the conundrum that Australia is about to face.

In a September 2025 paper authors Gamlen and Andrew Jaspan said that despite a global populist disruption around immigration, Australia was different. Reaching a remarkable conclusion, they wrote: “Migration in Australia is thus not just policy but part of the nation’s identity and state machinery: it is pre-political. This stability has shielded it from the immigration-driven turmoil seen in Britain with Brexit and in the US with Trump. Though Australia has more foreign-born residents than either, its debates are calmer, thanks to both national identity and long-term state capacity.”

RedBridge Group director Kos Samaras says Australia ‘has fundamentally changed who it is’. Picture NCA NewsWire / Aaron Francis

RedBridge Group director Kos Samaras says Australia ‘has fundamentally changed who it is’. Picture NCA NewsWire / Aaron Francis

These are revealing judgments pointing both to the confidence and complacency of the immigration establishment. It is true that immigration has borne exaggerated blame for many of our current ills from housing costs to political polarisation – yet it is equally true that it must bear some of the blame, that the current program is losing public support and that it is undermined by a range of policy mistakes.

Is genuine reform of immigration possible? The ruthless assessment of the Coalition’s prospects by RedBridge Group director Kos Samaras suggests it might be a bridge too far and that Australia is far different from the nation that initially voted for John Howard in 1996.

Samaras says Australia “has fundamentally changed who it is”. In the inner metropolitan seats the percentage of people who are foreign born or had a parent foreign born is now nearly 66 per cent.

“These voters are not looking for a cultural restoration project,” he says. Samaras seizes on the turning point that India is now replacing England as Australia’s largest overseas-born diaspora and warns that Taylor, in pitching to so-called “Australian values”, is not talking to the people he needs to win.

It is a fair warning. But there is no reason Indian and Chinese migrants should automatically shun the Liberals, nor is there any reason to think they would automatically oppose sensible immigration reform. But that is a bigger question that will need to be addressed in the Australian democracy.

The PM said he respected people’s right to vote whatever way they wanted but warned One Nation was a grievance party, not one of government.

Anthony Albanese has accused the Liberal and National parties of “legitimising” One Nation, saying it was a “big mistake” that led to thousands of voters in the Farrer by-election switching their allegiance and backing Pauline Hanson.

As Liberals face the likelihood of making more deals with the populist party to beat Labor. the Prime Minister said the Coalition preferencing One Nation and adopting similar policies to Senator Hanson’s party meant it was embraced by voters.

Saturday’s Farrer by-election marked the first time Senator Hanson has won a seat in the House of Representatives.

The dysfunction within the Coalition since the May 2025 election - in which the Nationals split from the Liberals twice and former Liberal leader Sussan Ley, who represented Farrer, was ousted - also harmed the conservative parties, Mr Albanese said.

“The Liberal Party and National Party made a big mistake legitimising One Nation and saying, in adopting many of their policies but a lighter version of them, and then following that up by giving them preferences, they were saying effectively that it was okay to vote for One Nation rather than the traditional conservative parties,” Mr Albanese told the ABC’s RN Breakfast program.

Incoming One Nation Member for Farrer David Farley reflects on his victory in the Farrer by-election. “The feet are on the ground. Quite a humbling experience, quite an honoured experience,” Mr Farley told Sky News Australia. “We travelled the electorate extensively … we listened to Farrer, I think was the most important thing. “At the end of it all, it gave the constituents of Farrer the confidence that we were the better party to represent them in Canberra.”

“Also there’s been a great deal of disappointment with the breakup of the Coalition, not once but twice. The removal of a leader who had represented of course that seat in Susan Ley for 25 years but who was removed without even being given the opportunity to do a single budget reply. And the way that that was done having these meetings on the day of the funeral of one of their former colleagues I think left an extraordinary legacy of betrayal for people who had supported Susan Ley for a long period of time.

“And also, quite clearly, there’s a lot of people under financial pressure who feel like the system isn’t working for them. And that’s a message for all political parties in the system.”

Mr Albanese said he respected people’s right to vote whatever way they wanted but warned One Nation was a grievance party, not one of government.

“I respect people’s right to vote whatever way they determine but One Nation of course is not a party of government. They are a political party led by someone who’s promoted grievance rather than solutions,” he said.

“I understand, though, a protest vote will be cast. In this case, it was a devastating result I think for Angus Taylor and the Liberal Party.”

ABC host Patricia Karvelas has come under fire from One Nation leader Pauline Hanson after suggesting Saturday's win in Farrer would be 'legitimising them' in the eyes of voters.

The Liberals gained just 12.38 per cent of the primary vote in the Farrer by-election, representing a swing of -31 per cent against the party, compared to 57.42 per cent for One Nation’s David Farley and 42.58 per cent for independent candidate Michelle Milthorpe, who was backed by Climate 200.

The Nationals picked up 9.73 per cent of the primary vote.

One Nation MP Barnaby Joyce, who will be joined by Mr Farley in the House of Representatives, said the right-wing minor party would not have an open door to Coalition MPs looking to jump ship, claiming the Liberals’ loss in Farrer was “almost a signal that things might be over”.

“Just because you jump doesn’t mean we catch you. It’s not an open door that anybody who wishes just walks into One Nation,” Mr Joyce said.

“The Liberal Party really do have to do some soul searching after the weekend because that was catastrophic. That is almost, that’s almost a signal that things might be over.”

Mr Joyce said the result could not be brushed off by the major political parties, claiming the limit of One Nation’s reach was up to the Australian people.

“It’s as far as the Australian people want it to go I suspect. As things evolve over time, the base broadens,” he said.

“Talking to people last night in the western suburbs of Sydney, they’re quite at home with the idea of one nation being a dominant force in Western Sydney.”

The Albanese government’s clampdown on negative gearing will apply to properties acquired from budget night, but not come into effect until July next year under an arrangement designed to stop a stampede of buyers.

A similar transition will apply to the changes to the capital gains tax discount, according to people familiar with the budget but not authorised to speak publicly. Assets acquired after budget night will receive the current blanket 50 per cent discount on any capital gain until July 1 next year, before switching to a pre-1999 indexation model.

Treasurer Jim Chalmers on Sunday. Tuesday’s budget will reveal a negative gearing policy akin to that which Labor took to the 2019 election. Alex Ellinghausen

As Treasurer Jim Chalmers defended what will be a litany of broken promises on negative gearing, capital gains tax and trusts, he contended the property tax increases were not about raising short-term revenue or improving housing supply, but sending a message to younger voters.

“Even though the challenges in our housing market begin with housing supply, they don’t end there,” he said.

“Any responsible government like ours needs to take seriously the very genuine intergenerational concerns that people have, and make the housing market fairer and make the tax system fairer as well.”

Chalmers also confirmed there was no surplus on the horizon, nor will there be any significant tax relief.

Confident there is broad support for the tax increases, despite having no electoral mandate, Tuesday’s budget will reveal a negative gearing policy akin to that which Labor took to the 2019 election.

As revealed last week by The Australian Financial Review, properties already negatively geared will be exempted from any change. Only new-built properties acquired after budget night will be able to be negatively geared. However, because the government will not be able to legislate the changes for some weeks, the rules cannot be legislated retrospectively.

“That would be bad tax policy,” said a source familiar with the matter.

That means, for example, an existing property acquired after budget night could be negatively geared until July 1, 2027, but not after that.

The arrangements are designed to prevent a stampede into the existing property market by investors. Also under the changes, there will be no limit on the number of new properties an investor can negatively gear.

New-built homes exempt from tax changes

As for the CGT discount, the 50 per cent discount that applies to all assets held for at least a year will revert to the pre-1999 system. The change will apply to all asset classes and will tax real gains adjusted for inflation over the life of the investment.

Like the negative gearing changes, new homes would also be exempted from the capital gains tax change, again to encourage supply. It is understood that investors in new builds could have the option of retaining the 50 per cent discount or adopting the inflation-based model.

Assets held before budget night will be partially exempted from the change. The final capital gain discount on these assets will be a combination of the proportion of time the asset was held under the different tax regimes.

Before the last election, Prime Minister Anthony Albanese ruled out changes to negative gearing and capital gains tax and made no mention of trusts.

Last week, Chalmers told the Financial Review that the capacity for scare campaigns in the age of social media fed into the government’s strategy to not be upfront with voters.

“I think the influence of social media, misinformation, disinformation, rage bait headlines has been to empower the scare campaigns full of lies that you often see about even sensible changes. The incentives in our political system have been realigned to reward scare campaigns and to reward lies,” he said.

“And so Australia has paid a price for that when it comes to the appetite for reform in governments and in the country.”

On Sunday, he contended that before the election, the government ruled out the tax changes because at the time, it was focused on supply measures.

He also announced on Sunday a version of a $5 billion policy the Coalition took to the last election to fast-track the building of new homes.

The budget will dedicate $2 billion to build enabling infrastructure such as water and sewerage pipes for housing developments, which Housing Minister Clare O’Neil said would unlock 65,000 new homes over the decade.

The $2 billion adds to more than $4 billion that Labor has announced for critical infrastructure since coming to office in 2022, and $45 billion spent on trying to overcome Australia’s housing crisis.

“If we want housing to be affordable, we need to build more homes. That means speeding up approvals and getting homes out of the ground faster,” said O’Neil.

On Monday, the government will announce another $500 million to streamline approvals under recently revamped environmental protection laws. This will extend beyond housing to energy and critical minerals.

No surplus in next four years

As he prepared to hand down his fifth budget, Chalmers confirmed that while the bottom line over the next four years would be healthier than that last budget update in December, there would be no surplus in the next four years.

“It won’t be in the next four years, but we will get the budget deficits down,” Chalmers told Sky News. “We will get those deficits down a bit in the budget on Tuesday night because we will be saving more than we spend.”

The government has already legislated top-up tax cuts of $5 a week from July, a standard $1000 tax deduction option and a three-month halving of fuel excises. There will be a one-off $200-$300 tax payment to salary earners, which will enable the government to say it is returning some of the proceeds from its tax increases in the form of income tax relief.

“People shouldn’t expect that the tax package that is in the budget on Tuesday night raises heaps of new revenue over the four years of the budget period,” Chalmers said.

“I see speculation from time to time that tax reform would raise tens and tens of billions of dollars, which can be immediately returned as big income tax cuts. That’s not really the reality of what people should expect.”

This budget is a Labor dream come true. It will redistribute income from investors to workers.

It will redistribute real estate opportunity from the prosperous old to the aspirational young.

The budget takes from mum and dad and gives to the kids.Cathy Wilcox

And, because it’s a Labor dream, it’ll be attacked by the Coalition as a nightmare. Which is exactly what the Albanese government is hoping for.

By fighting to protect investors and older people, the Coalition will defend a dying demographic. And alienate the fast-growing younger. Already, voters under the age of 45 – Millennials and Gen Zs – constitute the majority of the electorate.

And, by the next election, there will be 700,000 more Millennial voters on the electoral rolls than there were at the last. Among these, only one in five consider themselves Coalition voters, according to Kos Samaras of RedBridge, “and that’s on a good day”.

“We are giving hope to younger generations,” Treasurer Jim Chalmers told reporters. “That’s what this budget is all about.”

2:27

The federal budget at a glance

While some budgets seek to play it safe, the government is taking risks this year. Economics writer Millie Muroi explains what you need to know.

Labor’s hope is that the Coalition, by trying to take the hope away, will deal the political deathblow to itself.

If the Coalition is true to its recent punch-drunk form, it will oblige.

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For Albanese, who once said his purpose was to “fight Tories”, this will be the sweetest victory of all.

The budget might not do enough to douse the flames of the populist fire fanned by One Nation because it doesn’t lead Australia out of its low-growth, low-productivity road of economic mediocrity. The simmering popular disgruntlement that has fuelled One Nation will probably continue to rise towards boiling point.

If so, the demise of the responsible right might merely open the way to the irresponsible far-right.

But Albanese will be content to take his enemies one at a time.

It was Brutus who spoke the famous line that “there is a tide in the affairs of men, which taken at the flood, leads on to fortune”.

For Albanese, the tide is at flood. With a dominant parliamentary majority, an opposition in disarray and two years until the next election, the conditions for bold action are ideal.

“We must take the current when it serves, or lose our ventures,” Brutus urged Cassius in Julius Caesar.

And the reform need is real. Albanese hasn’t confected a warped tax system that privileges investors over workers, and well-off retirees over first home buyers. These are persistent problems, long identified by economists, that governments have feared to address.

Jim Chalmers says that the budget will “dial up tax relief for people who work for a living”. They’ll get an automatic $1000 tax deduction every year from now, plus a $250 working Australian tax offset every year from next year.

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Federal budget verdict: Jim Chalmers’ report card is in

As opposed to people who depend on income from investments – “not making any judgments”, Chalmers reassures as he announces a new minimum tax on distributions from trusts, which the wealthy commonly use as tax shelters.

This budget requires the trust to pay a minimum 30 per cent, “more closely aligning the tax rates from trusts with the rates paid by workers who earn a living from wages”, as the budget papers explain.

As for housing, this is where Albanese’s Labor dream is aiming to revive the Australian Dream. Over the past quarter-century, average incomes doubled. But home prices quadrupled. This broke the dream of home ownership for ordinary workers and stoked the wealth of canny investors who bought real estate for the tax benefits.

This budget seeks to make real estate less attractive to investors, and therefore more available to first-home buyers.

But while the prime minister and his treasurer are acting boldly to rebalance the system, they are not doing it recklessly. They’re trying to not punish existing investors. There are grandfathering provisions to protect existing negative gearing arrangements, for instance. Existing capital gains will be taxed under the old regime.

The government wants to get more young buyers into the property market. Courtney Kruk

Any investor looking for new negative gearing opportunities can still find them; they’ll just be limited to newly built homes, not existing ones.

The Treasury modelling guesses that the net effect of all the changes will be to temper price growth by 2 per cent, or about $19,000 for the median home, over several years. So they expect home prices not to fall, but merely to moderate in the rate of growth. This is hardly a communist revolution.

Chalmers expects that these changes will help about 75,000 Australians buy their first home over the course of a decade. This is marginal, equivalent to increasing the rate of home ownership from 66 per cent to 67. The budget contains other measures to boost home-building, including the $2 billion for local water and road connections, an initiative inspired by the independent Helen Haines.

But the tax changes themselves will make only a very modest contribution to increasing the supply of homes. As Chalmers says, they’re more about increasing the supply of hope.

Photo: Matt Golding

Yet the big picture of Australian economic performance is not terribly hopeful.

Chalmers announced a range of productivity measures, yet none, singly or together, is sufficiently serious enough to boost productivity. The treasurer says that they will, but his budget papers don’t support the rhetoric. The papers say the outlook for productivity growth is unchanged at a plodding 1.2 per cent.

In other words, Australia is stuck at its current economic growth limit of 1.5 to 2 per cent a year. Anything faster induces the friction known as inflation, demanding Reserve Bank corrective action.

The budget redistributes hope, but, at this sclerotic rate of national growth, it doesn’t create much. A high-growth, high-hope economy? That remains a dream.

Australians will not receive a bonus tax cut this year to compensate for tax hikes on asset owners as the Albanese government aims to rein in ballooning debt and avoid stimulus that might fuel inflation and interest rates.

This masthead has confirmed through cabinet sources that a potential one-off tax offset for wage earners is expected to be handed to voters at tax time in 2027 rather than this financial year.

The 2026-27 federal budget comes off the printing presses in Canberra on Sunday afternoon.Alex Ellinghausen

Resisting the temptation to woo voters with a tax offset during a petrol price shock, Prime Minister Anthony Albanese and Treasurer Jim Chalmers have made a call to stick this year with the modest “top-up” tax cuts announced in last year’s budget – worth about $5 a week to people earning more than $45,000 a year – and due to kick in from July.

But a follow-up tax cut in 2027-28 will likely get supplemented as the government attempts to deliver tax relief to wage and salary earners without adding to the inflation pressures that prompted the Reserve Bank last week to lift interest rates to 4.35 per cent.

On Sunday, Chalmers pushed back on suggestions he was hiding a surprise tax cut to unveil on budget night, as he did last year.

“There are already tax cuts built into the budget and there’s a new instant deduction which provides ongoing relief, a bit of extra relief in the tax system. There’s the fuel tax cut as well,” he told Sky News.

Tax reform, spending cuts and policies aimed at increasing the speed at which the economy can grow are key parts of a budget Chalmers has described as the government’s most ambitious.

Housing is central to the budget. It will contain $500 million in new funding for faster approvals for homes, energy and critical minerals projects as part of the government’s overhaul of environmental planning laws.

On top of $2 billion to help councils and utilities’ providers build infrastructure such as roads and sewerage systems, almost $106 million will be spent on improving access to environmental data, while $70 million will be shared with the states to improve their approvals processes.

As part of the tax reform package, the government is expected to push ahead with changes to negative gearing which would restrict the tax concession to new builds, a return of the capital gains tax system to its original design and a minimum tax rate on trusts.

The government went to the last election promising not to touch negative gearing which has been part of the tax system since the 1930s. But Chalmers said the government recognised the tax system was making it more difficult for young people to access the housing market.

Treasurer Jim Chalmers arrives at Parliament House for an interview ahead of the budget. Alex Ellinghausen

“People know that we understand there is a legitimate concern about how hard it is for younger people to get into the market, and so the budget is partly motivated by that,” he said.

The budget has been drawn up as inflation spikes, fuelled by the economic fallout of the US’ war with Iran. Key decisions and analyses have been delayed, with Chalmers putting the final touches to his budget speech on Sunday.

Chalmers revealed he will not forecast a budget deficit over the next four years on Tuesday night. As this masthead revealed, the treasurer will predict smaller deficits, which had been expected to average $35 billion annually.

He has promised net savings of $64 billion and the banking of all upward revisions in tax revenue. The single largest cut is an overhaul of the NDIS which is expected to save $35 billion over the next four years.

There are no plans, at this stage, to extend the cut in petrol excise due to end on July 1, which has reduced liquid fuel prices by up to 32 cents a litre. A decision is likely to be made in June, depending on whether the Strait of Hormuz has opened.

Liberal leader Angus Taylor will respond to the Albanese government’s plans with his own budget-in-reply speech on Thursday in which he is expected to confirm some of his party’s key policies.

Shadow treasurer Tim Wilson said his party needed to outline a “bold and confident vision” for the country to win back voters that have switched to the government or One Nation.

He signalled the Coalition was unlikely to back changes to capital gains tax or negative gearing, instead focusing on tax relief for working people with deep cuts to government spending.

“My position is this is clear, which is we need to be having a tax system that’s orientated towards encouraging wealth creation, jobs, and growth for the next generation of Australians,” he told ABC’s Insiders.

“Labor’s plan is to feed resentment and redistribution. We have wildly different views about how to build the future of the country.”

EY Australia chief economist Cherelle Murphy said the government risked adding to inflation pressures if it failed to restrict spending.

“Government spending, which is at a record high as a share of the economy, must avoid adding to inflation. We know some cost-of-living measures are planned but hope anything further is targeted only to those in need to avoid exacerbating the problem,” she said.

The budget will contain a series of measures aimed at helping the business sector, including the permanent retention of the $20,000 small instant asset write-off for small firms and the end of fees of up to $1600 on builders when they access necessary regulations governing construction.

But Australian Industry Group chief executive Innes Willox urged the government to go bold on tax reform.

“Piecemeal changes that simply raise revenue and plug holes in the budget bucket are not genuine reform. Nor will small and tokenistic tax cut handouts to households or businesses fix the dysfunctions of the tax system,” he said.

The most dramatic moment of the campaign in the Farrer byelection is also its emblem. A Liberal member of parliament tries to recover his phone snatched away by an angry One Nation Boomer in an orange T-shirt. It’s a metaphor for Australian politics, where the Liberals are desperate to retrieve what was once theirs – about a third of their voters who’ve left to support One Nation.

But the metaphor breaks down today. Because while Senator James Paterson did get his phone back after a tussle at a polling booth, the Liberals are not about to recover their vote at the ballot box.

Photo: Illustration by Simon Letch

The Liberals are being humiliated. For the second time in two months, One Nation is relegating to third place the party that ruled Australia for two-thirds of the postwar era.

Pauline Hanson’s scrappy protest party is displacing the once-grand party of Menzies and Howard. First it was in the South Australian state election in March, where Labor won, One Nation ranked second and the Liberals third. And today in a rural NSW seat, according to all indications, One Nation appears set to win with an independent second and the Liberals third.

The seat of Farrer has only ever been held by the Liberals or Nationals since its creation in 1949. Liberal Sussan Ley won it last year with a primary vote of 43 per cent. Today, senior Liberals say they’ll consider themselves lucky if they can win 20.

“Dull lights don’t even attract moths,” scoffs Barnaby Joyce, who defected from the Coalition to One Nation last year.

But it won’t affect Labor’s dominance of the House of Representatives in Canberra and nor will it change the balance of power, so why does it matter?

“If One Nation wins this,” says psephologist Antony Green, “there are another two dozen seats they can win in rural and regional Australia” at a future general election.

And they would come at the expense of the Liberals and Nationals, who currently hold a combined 41 seats. “The Coalition can’t possibly get into government in their own right” in this case, says Green. They’d be forced to work with Pauline Hanson.

But the next general election isn’t due for two years, plenty of time for the Coalition to recover. Why get frantic about a byelection today? Because, as a Liberal frontbencher puts it: “I do think this is a historical moment, not part of the usual ebb and flow. We are in a totally new era.”

Two phenomena support this contention. One is the “burn it down” syndrome that powers Hanson’s support. This is an angry rejectionism that does not submit to conventional rules of politics.

In a normal electoral contest, damage inflicted on a candidate’s reputation will translate into damage to their poll support. But it doesn’t seem to work against Hanson lately.

In recent weeks, several developments, any one of which traditionally would hurt a political party, hit One Nation. Hanson sacked a staff member of her party headquarters when it emerged that he was a convicted rapist. Her candidate for Farrer, David Farley, was revealed by this masthead to have sought preselection as a candidate for the Labor Party three years ago. Hanson, champion of battlers, announced that billionaire Gina Rinehart had given her an aeroplane.

These events might have harmed the party’s share of the vote at today’s byelection, but there was no clear evidence of that. According to Joyce, One Nation voters received these pieces of information with the attitude that “what you’re telling me is interesting but not relevant”.

“The things that made people angry enough to go to One Nation came along well before this byelection,” Joyce says. “Is my cost of living going to be fixed because you’ve pointed out the candidate wanted to join another political party?”

Jim Reed of Resolve Strategic, pollster for this masthead, has found the same thing: “One Nation voters in our focus groups often tell us that they are voting against one or both of the major parties for a change, either to force a change in direction from them or simply to vote them out. It’s a protest, in other words.”

Highlighting problems with Hanson, her party or her candidates “really doesn’t work on One Nation because people aren’t voting for them. They’re using them to vote against someone else.”

Redbridge’s Kos Samaras says One Nation is impervious “because the people voting for them aren’t going to turn around and say, ‘Well, that’s it then’ – they want to overthrow the system.” This is the same “burn it down” syndrome that drove support for Donald Trump’s two election wins.

Polling by the Redbridge Group found that 70 per cent of One Nation voters agreed with the statement that: “I’m voting One Nation as a tactic to make the major parties listen to ordinary Australians.” Still, that suggests that the other 30 per cent could switch their vote away from One Nation in the face of revelations.

The second phenomenon is what I’ll call a ventriloquist effect. It was unearthed by new Liberal internal research. This is where the Liberals may make a winning argument but the credit goes to One Nation. For instance, the Liberals successfully campaigned to pressure the Albanese government into calling a royal commission into antisemitism after the Bondi massacre. The Libs won the argument but “our vote went down and One Nation’s vote went up”, says a senior Liberal.

Like a ventriloquist’s act, the Liberals do the talking but the dummy gets the applause. “Traditional binary politics isn’t working,” he says. “Perversely, our attacks on the government fuel One Nation’s support, not ours.”

This is a diabolical political cul-de-sac that the Liberals have put themselves in. It makes sense. The Liberals have behaved like a protest party. But if that’s what you want, you’d support the more authentic protest party, One Nation.

The way out for the Liberals is to build a strong edifice of their own beliefs and policies, to create an attractive electoral persona, rather than trying to be a feeble imitation of One Nation like a second-hand Hanson.

Green suggests the Liberals solve their problem by dumping their current leader, the anodyne and ineffectual Angus Taylor, and turning to Andrew Hastie: “Hastie offers an alternative to both Labor and to One Nation.”

Andrew Hastie gave evidence in the defamation case brought by Ben Roberts-Smith. Louise Kennerley

But, while Hastie is the Liberal leader in waiting, the party won’t move to him soon, regardless of how poorly Taylor performs. Why not? The right of the party has embraced decorated soldier and alleged war criminal Ben Roberts-Smith as a part of politico-cultural identification. Hastie, a former SAS captain who served with Roberts-Smith, has not. Indeed, Hastie gave evidence against him in the defamation case that Roberts-Smith brought against this masthead. This has damaged Hastie among the Liberal right and it will give Taylor temporary protection. Hastie will use the intervening months to build a manifesto.

Hanson has inflicted awful damage on the Coalition in the past eight months but eventually she will turn on Labor, too. As the very definition of the status quo, the Albanese government will be ripe for targeting. Elevated inflation, alone, will be enormously damaging to the government, generating a deep and far-reaching grievance as it erodes relentlessly the value of incomes.

Labor’s best defence is to address the underlying causes of Australian electoral disenchantment. Which it will attempt to do with Tuesday’s budget. Former Treasury secretary Ken Henry sets out three essential priorities for the budget, and the inflation problem needs to be its first.

“The budget must achieve some measure of fiscal consolidation,” says Henry. In other words, Treasurer Jim Chalmers has to cut spending. There’s not a great deal that Canberra can do about inflation, but it can avoid making things worse. The government has to ensure that “fiscal policy is working in the same direction as monetary policy, thereby limiting further increases in interest rates,” Henry tells me.

In other words, the Reserve Bank is stepping on the economic brakes to curb inflation. The last thing it needs is the government stepping on the accelerator with more spending. Chalmers needs to help the anti-inflation effort by cutting spending.

Chalmers has sworn the government to the cause. He’s said that the budget will, indeed, make more cuts to spending than it will make spending increases. But the quantum is crucial; we await Tuesday’s net saving number.

Second, says Henry, is to address what he’s previously called the “intergenerational bastardry” of a tax system that works against the younger generations, anyone under the age of about 45. The budget must “improve the bargaining position of first home owners relative to investors”. Albanese has found religion on this; he will attempt exactly that by reducing the generosity of capital gains and negative gearing tax concessions for investors.

Third, Henry wants the budget to “do something to lift both productivity and domestic economic resilience”, reviving living standards and bestowing economic security. Based on Chalmers’ rhetoric, he agrees. We await the detail.

Australia teeters on the brink of a populist uprising led by a longtime racist. That’s the message from today’s byelection. The government is on the brink of trying to do something about it. The Coalition is on the brink of a nervous breakdown.

Peter Hartcher is political and international editor. He writes a world column each Tuesday.

Local councils, power providers and water utility businesses will share in $2 billion in Tuesday’s federal budget to build critical infrastructure that the Albanese government says will support the construction of up to 65,000 homes across the country.

As this masthead revealed on Saturday, this week’s budget will be heavily focused on housing, including changes to its tax treatment for investors and incentives to build new properties.

Treasurer Jim Chalmers will unveil $2 billion to bolster the development of new housing in Tuesday’s federal budget.

Treasurer Jim Chalmers will unveil $2 billion to bolster the development of new housing in Tuesday’s federal budget.Alex Ellinghausen

The $2 billion, to be spent over four years, is aimed at so-called “enabling infrastructure”, which is necessary for housing to be built. It covers roads, water, power and sewerage, with the cash to be spread among local councils and utilities providers.

A quarter of the $2 billion will be set aside for regional areas. The government estimates up to 65,000 additional homes will be built over the next decade because of the infrastructure financed by the program.

The funding comes on top of $3.1 billion to support the construction of 100,000 properties for first-time buyers, and $1.2 billion in separate financial assistance to the states and territories for housing infrastructure.

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Treasurer Jim Chalmers said that building more homes would be an important element of Tuesday’s budget.

“In this budget, we’re investing billions of dollars to build more homes for Australians,” he said.

“Right now, it’s too hard for too many Australians to get into their own home and get ahead, and that’s why we’re investing in supply. Our housing plan is pro-aspiration and it’s pro-investment.”

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The policy is similar to the promise made by then Liberal leader Peter Dutton ahead of last year’s federal election to pump $5 billion into infrastructure for roads and water, which he claimed would help support the construction of 500,000 properties.

But the government is also poised to use the budget to unveil changes to property tax breaks that the Coalition is already vowing to oppose.

Chalmers is expected to announce that the current 50 per cent capital gains tax concession will be returned to its pre-1999 form, under which the value of assets was adjusted for actual inflation, with the tax applied only to the “real” increase in value.

He is also expected to announce restrictions on negative gearing, the process under which property investors can use losses on their rental properties to reduce their entire taxable income.

Shadow treasurer Tim Wilson warned that changes to the CGT concession would “kneecap” young Australians who had invested their first home deposit savings.

In a sign of the political fight facing the government over any change to property tax concessions, the Coalition has created a website to capture stories from people about what the as-yet-unannounced reforms may do to the housing market.

Wilson said young people were “resentful” that their savings were tax-free if held in a home while risking a 47 per cent rate if invested elsewhere. The top income tax rate of 45 per cent, plus the 2 per cent Medicare levy, applies to incomes over $190,000.

The $2 billion plan will help build essential infrastructure needed to enable new housing developments.

The $2 billion plan will help build essential infrastructure needed to enable new housing developments.Jason South

“Young Australians invest their home deposits to increase their savings and bring home ownership forward, but under the treasurer’s broken promise, their tax could be doubled and home ownership kneecapped,” Wilson said.

The budget will also contain a productivity package that will feature initiatives aimed specifically at the housing sector.

It plans to cut by six months the time taken for migrant tradespeople to enter the workforce, after a report by former senior public servant Martin Parkinson revealed that there were many qualified people in the country effectively barred from using their skills in the construction sector.

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As this masthead revealed last year, tradies including builders, plumbers and electricians, often face fees of up to $1600 to access mandatory Australian standards on everything from solar panel installation to electrical wiring. These standards will now be free to construction, occupational health and safety and product safety firms.

The current $20,000 instant asset write-off for small businesses will be made permanent.

Along with other reforms, the government estimates its productivity package will cut red tape costs by $10 billion a year while lifting GDP by $13 billion annually.

Housing Industry Association managing director Jocelyn Martin said the package was a significant step towards addressing declining productivity in the residential building sector.

“Free access to Australian Standards alone will remove a major and unnecessary cost on builders, tradies and small businesses, while improving compliance, safety and consistency across the industry,” she said.