By Dylan Voyles, Saffron Geyle, and Sarah McCrea
On 12 May, Treasurer Jim Chalmers delivered the 2026-27 Federal Budget, projecting a cash deficit of $31.5 billion. Chalmers claimed this year’s incoming Budget to be “the most important and ambitious Budget in decades”.
“Important because the world is throwing a lot at us – and this Budget is about helping Australia deal with these challenges. And ambitious because we have so much going for us – and this Budget is about Australia seizing those opportunities.”
Chalmers stated the core of this year’s Budget is “an economic strategy with five main parts”. These involved “getting through the global oil shock and building resilience”, “taking the pressure off people where we can”, increasing productivity in the economy to “lift living standards over time”, “reforming the tax system” and “making the Budget stronger [and] more sustainable”.
“We’re dealing with a fifth economic shock in less than 20 years.”
With last year’s federal Budget focused on cutting 20 per cent of all student debt loans and committing to formally establishing the Australian Tertiary Education Commission (ATEC), the federal 2026-27 Budget had a lot to deliver on for students. But did it?
Education Sector:
TEQSA
At the ANU this month, former Chancellor Julie Bishop resigned from her role, criticising “unprecedented and coordinated interference” and “regulatory overreach”. Her resignation was soon followed by that of four other Council members. This comes after the Tertiary Education Quality and Standards Agency (TEQSA) accepted a voluntary undertaking on the procedure of appointing the next ANU Chancellor.
From the 2026-27 Budget, TEQSA has now been granted an additional $9.4 million in funding in order for the regulator “to have stronger enforcement and monitoring powers to step in and act when it is justified in the public interest”. In the Education Portfolio Statement, it was added this measure was taken “to ensure that [TEQSA] is utilising its regulatory powers to achieve its regulatory goals”. The Senate inquiry into ‘Quality of governance at Australian higher education providers’ as well as the ‘2025 Special Envoy’s Plan to Combat Antisemitism’ were referenced, the government citing their recommendations as areas this funding will help TEQSA respond to.
This measure means the government commits to “progress[ing] work to provide TEQSA additional powers and tools to support the efficient and effective regulation of the higher education sector”, through “potential amendments to the [TEQSA] Act”. Their priorities include “supporting effective governance practices” and “supporting all higher education providers to have effective policies and practices to prevent and respond to racism“.
According to the Budget, the $9.4 million in additional funding, to be delivered over four years, “will be met from TEQSA’s existing cost recovery arrangements and from a reprioritisation of funding from within TEQSA”. The estimated revenue TEQSA is expected to receive from the government in 2026-27 is $24.8 million, an increase from last year.
With such a strong focus on the future prevention and addressing of “governance failures”, a reformed TEQSA could mean a reformed ANU. Yet as TEQSA’s involvement in the ANU is already a controversy, this measure could force stability among remaining leadership or create further, if temporary, uncertainty.
Research and Innovation
On the research side the allocation of the Commonwealth grant scheme rises to $8.7 billion. The Research Training program, which funds the Higher Degree Research stipends and tuition, now sits at $1.27 billion with ANU’s share determined by its research performance relative to the sector. However the National Collaborative Research Infrastructure Strategy which funds shared facilities like supercomputers and telescopes has dropped from $464.8 million to $376.1 million and continues falling across the future estimates. The Trailblazer Universities Programs ends this financial year, and a broader ‘Boosting Productivity’ measure has cut research and innovation spending by $124 million, growing to $178 million annually by 2030.
International Education
International education, a significant revenue stream for ANU, has received less attention. The International Education Support, designed to fund government-to-government engagement and promotion of Australian education abroad, has had funding cut from $11.1 million to $6.3 million. This will fall further to $3.4 million in the future. For students, this means less debt, lower taxes and more earnings from part time work, however the cuts to research infrastructure and international education promotion could affect the quality and range of opportunities at universities in the years ahead.
Tax Cuts:
Treasurer Jim Chalmers described the Budget’s tax package as the most significant reform in over a quarter of a century. From the 1st of July 2026, the 16 per cent tax rate on income between $18,201 and $45,000 drops to 15 per cent. A further offset, the Working Australians Tax Offset provides an additional tax cut of up to $250 from July 2027, raising the effective tax-free threshold for workers by nearly $1,800. The government is also introducing a $1,000 instant tax deduction allowing workers to reduce their taxable income without having to show receipts.
More contested reforms to the tax system target property investment and capital gains taxes. From 1 July 2027, negative gearing for residential property (where investors deduct property losses against their other incomes to reduce their tax bill) will be limited to new builds. The capital gains tax (CGT) discount for individuals, trusts, and partnerships will also be replaced with a cost-base indexation model and a new minimum 30 per cent tax on capital gains occurring after that date. This change in CGT will be applied to all asset classes. The government argues that this levels the playing field for younger Australians trying to enter the housing market.
National Disability Insurance Scheme (NDIS):
Sweeping reforms to the National Disability Insurance Scheme (NDIS) were first announced on 22 April 2026. This Budget has expanded on these announced reforms, focused on ‘Securing the NDIS for future generations’. The reforms aim to save $36.2 billion over the next four years. Here’s the key measures the government intends to take:
The government has set out its intent to change eligibility requirements for the NDIS, commencing 1 January 2028. It states it will be “based upon a substantial reduction in a person’s functional capacity that impacts their day-to-day living” measured by “standardised, evidence-based assessment of functional capacity”.
There will also be a new $200 million ‘Inclusive Communities Fund’, which will provide funding to community organisations to build “social and community participation activities”. However, NDIS participant budgets for “individualised social, civic and community participation support” will be re-set for “to stabilise cost growth and encourage genuine community participation”.
Across four years, the government has also committed $821.2 million to address fraud and rorting in the NDIS system. This is primarily focused on improving registration and payment systems, as well as continuing and strengthening existing relevant bodies’ abilities to address these issues.
The National Disability Insurance Agency (the NDIA) has been allocated a total of $436.0 million for the 2026-27 financial year, with its roles including responding to fraud and inclusion in consultation on the NDIS reforms.
These measures created concern among the community since their announcement in April. Students across Australia who are participants in the NDIS are now facing changing eligibility requirements and individual participant budget cut-backs, encountering potential instability while still in the middle of study.
Healthcare Sector:
Healthcare remains a priority for the Australian Government, with the sector making up over 16 percent of total expenses. Here is a breakdown of some key healthcare initiatives introduced under this year’s Budget:
Public Hospital Initiatives
The Budget will provide an additional $25 billion in funding for public hospitals, with $24.4 billion allocated to the 2026–31 National Health Reform Agreement (NHRA). The NHRA provides funding to the states and territories for public hospital and health services and is reviewed by the Government every five years.
This year’s Budget indicates three times more additional funding for public hospitals than under the previous five-year agreement. The 2026–2031 NHRA Addendum was signed by the Australian Government and state and territory governments on 27 February 2026 and will take effect on 1 July 2026.
Medicare
The Budget sees $1.8 billion being invested in Medicare Urgent Care Clinics as a permanent feature of Australia’s healthcare system. There are set to be a total of 137 clinics across Australia by July of this year. In his Budget speech, Chalmers stated that by this time, “four in five Australians will live within a 20‑minute drive of one of the 137 clinics around the country”.
“As a Labor government, we will always invest in Medicare, cheaper medicines and public health so Australians get the care they need, when they need it.”
Bulk Billing
$11.4 billion is to be invested in bulk billing incentives, based on the government’s goal of ensuring that 90 percent of GP services are bulk billed by 2030. This follows recent bulk billing reforms, commenced on 1 November 2025, which saw over one thousand general practices across Australia becoming completely bulk-billed. This year’s Budget additionally provides $25.3 million in targeted funding to lift bulk billing rates in the Central Coast, Newcastle, Lake Macquarie, and Hunter regions.
In our current cost-of-living crisis, students are often faced with the dilemma of affording healthcare and basic living costs, oftentimes foregoing the former. We can hope that these new initiatives will implement affordable access to healthcare services, and increase health outcomes for students.
The Coalition:
The Coalition has declared it will resist Labor’s moves to restrict negative gearing and amend the capital gains discount, amid ongoing tensions between the two parties. Opposition Leader Angus Taylor stated that the party are “not going to support Labor’s broken promises”, however, they will “support the small business measures particularly around investment”.
Taylor argues that changes to negative gearing and capital gains tax discount will drive up rents and diminish housing supply. He stated that the first-home buyers initiative “will make no material difference to young Australians”.
Taylor will deliver his Budget reply speech on Thursday.
The Budget In Conclusion
From income tax cuts, to a priority in funding more bulk-billing initiatives, Labor’s 2026-27 federal Budget promises an increase in affordability amid a historic cost-of-living crisis for Australia. Will the government be able to deliver? Observer will be following along with these new initiatives.
More to come.
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