Federal Budget 2026: Baby boomers take aim as first homebuyers, future generations prioritised

It was billed as the Budget that would restore intergenerational equity, but it has left baby boomers like Amina Schipp seething.

Major tax reforms to “level the playing field” for first home buyers and future generations have come at the expense of older Australians and the wealthy.

As self-funded retirees, Amina and her husband won’t see any of the $6.4 billion tax offset package targeted at working Australians.

And from April next year they will take a hit when the Federal Government removes a private health insurance rebate for over 65s, to “improve intergenerational equity” and save $3 billion over four years.

While Mrs Schipp, 70, welcomed measures to ease cost of living pressures for her daughter Stephanie and newborn granddaughter Poppy, she questioned why it had to come at the expense of older Australians.

“Those of us who are self-funded retirees, who have worked hard and paid taxes, not only do we get nothing from the government but we get penalised,” she said.

Mrs Schipp said she knew of many seniors who planned to cancel their private health insurance in the wake of the changes.

“This means more pressure on the public system, it’s robbing Peter to pay Paul and at the end of the day I’m sure the money could have been found somewhere else,” she said.

“But us baby boomers have apparently got money trees in our backyard, so we can afford it. We are being used as scapegoats.”

While older generations with existing investment properties will be spared from changes to negative gearing, they will be hit with the removal of the 50 capital gains tax discount.

And the wealth held in discretionary family trusts will be targeted to fund tax cuts for working Australians, with the introduction of a 30 per cent minimum tax rate.

Treasurer Jim Chalmers said in 2022-23, on average, families with discretionary trusts enjoyed a tax rate about four percentage points lower compared to those on similar incomes that don’t use trusts.

“There are legitimate reasons to use trusts, such as succession planning and asset protection, but the current settings are becoming unsustainable with the number of discretionary trusts more than doubling over the past 20 years,” he said.

“This will help fund important reforms like the latest round of income tax cuts and mean ordinary workers carry less of the burden in the tax system.”

While the debate leading up to the Budget pitted two generations against one another, Stephanie Schipp argued it was not so clear cut.

“I don’t think that people of my parents’ generation have necessarily ‘had it better’, people just went without non essentials, did not live beyond their means and often managed by living with their family longer,” she said.

“This enabled them to save for a deposit on a modest home. Many ‘baby boomers’ worked two jobs to be able to afford buying a house and raising children. Yes, property was cheaper, but their incomes were much lower too, it’s all relative.”

Stephanie, who is currently on maternity leave, predicted multigenerational living would make a comeback as the cost of living continued to bite.

“Despite all the grants available to first home buyers, many are still unable to achieve the great Australian dream,” she said.