Here’s what the budget means for every generation – from Boomers to babies

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The ever-widening wealth gap between generations has been framed as the government’s primary target in this year’s budget as contentious changes to tax policies such as the capital gains discount and negative gearing find themselves in Labor’s crosshairs.

The phrase “intergenerational equity” has become synonymous with this budget as Treasurer Jim Chalmers used his Tuesday night speech to express the government’s embrace of “intergenerational responsibilities” while managing ongoing economic pressures from the war in the Middle East and stubborn inflation.

From fast-tracking builder training accreditation to slashing the private health insurance discount, from school sports to sweeping tax changes to unlock housing affordability, here’s what the budget means for every generation.

Baby Boomers and older

Aged between 60 and 79 years old, the Baby Boomers remain the wealthiest generation in the nation, with an average net worth of $2.46 million, according to consultancy firm KPMG. They will be hit by cuts to the private health insurance discount but benefit from increased aged-care spending and the coverage of drugs by the Pharmaceutical Benefits Scheme. Here’s what’s on the table for the Baby Boomers:

• Private health insurance will become more expensive as the government rips $3 billion out of subsidies over the next four years, and $1 billion a year after that. More than 3 million Australians over 65 have private health insurance, and the industry’s peak body has warned premiums could jump by between 4 and 21 per cent.
• Funds gathered from removing the rebate will be redirected into aged care, for the provision of 5000 additional beds a year and additional funding for the Support at Home program.
• The affordability and access to home care supports will be bolstered by $1.4 billion. The full funding of “personal care” measures like showering for Support at Home participants will receive $1 billion of that funding. The rest will go towards program assessments, hardship applications and end-of-life pathways.
• Aged care will receive $565.1 million over the next four years, targeted to support regulatory, governance and quality arrangements. More than half of this, $259.9 million, will go towards the sustainment of ICT systems in the sector. Other funding will go towards programs such as the National Dementia Action Plan.
• More drugs will be placed on the Pharmaceutical Benefits Scheme at a cost of $5.9 billion. While new additions will cut across generations, treatments for conditions such as prostate, lung and bladder cancer will primarily benefit older Australians.
• Frontline staff at Services Australia centres will receive a $1.7 billion investment over two years, making the accessing of services and the management of claims easier.

Gen X

Aged between 45 and 59, this generation has the most wealth in property of any generation but faces pressures from supporting children entering university or the housing market, and parents in need of additional support.

• Trustees of discretionary trusts set up by families to distribute income will now be saddled with a 30 per cent minimum tax. The country now has 840,000 discretionary trusts, and changes to the way they are taxed will hit many families who have previously been able to spread tax burdens across generations and within businesses.
• Negative gearing, which allows property investors to deduct losses on their property from their personal income, will be altered. The budget will restrict negative gearing to new builds only from July 2027. While this may hurt Gen X as they attempt to purchase investment properties, it will not apply to properties that have already been negatively geared.
• As their parents age, Gen X will benefit from a $3.2 million investment over the next four years in extending workplace support for employees with caring responsibility to enter and remain in the workforce. This will be delivered through the Carer Inclusive Workplace Initiative.

Millennials

Aged between 30 and 44, Millennials have the most debt of any generation in the country, and have struggled to crack into the housing market. Big moves to unlock housing affordability will help this generation but ballooning government debt will bite.

• Capital gains tax will be altered, a move that will make holding assets less lucrative and perhaps encourage more properties to be put up for sale. A 50 per cent capital gains tax discount on assets owned for more than a year will be scrapped, in place of inflation-adjusted indexation to tax “real” gains on assets. Chalmers said the government’s alterations to capital gains tax and negative gearing will help 75,000 Australians into homes. Importantly, the changes will mean Millennials keep the opportunity to use tax breaks if they invest in new homes, but there should be less competition from investors in the market for existing properties.
• Firms will receive a generous tax break for research and development as the cap for research and development investment covered by tax breaks is raised from $150 million to $200 million. This will support both larger firms and start-ups, which will benefit Millennials in the burgeoning tech sector.
• As Australia’s gross debt ticks over $1 trillion, this generation and subsequent ones will find themselves saddled with ballooning interest payments on government debt. Annual repayments in the next financial year will total $31.9 billion, ratcheting up to $46.9 billion at the end of the decade.

Gen Z

Aged between 15 and 29, this generation covers a broad swath of secondary and tertiary students, young parents and early career workers. They are suffering under the high inflationary environment while on low wages, and struggling to see home ownership as a viable possibility.

• Big increases in defence spending, in the order of $53 billion over the next decade, will open the door for recruitment opportunities. The Australian Defence Force is already having a boom in recruitment and training, which will benefit Gen Z the most.
• Younger members of Gen Z will benefit from a $9.4 million investment in university watchdog the Tertiary Education Quality and Standards Agency, which will focus on university governance and antisemitism on campuses.
• The National Customer Service Line will receive an additional $26.5 million over three years to bolster support for jobseekers.
• Assistance will be provided for the fast-tracking of accreditation of residential builders, to the tune of $4.6 million over 2026-27, on top of existing measures the government has to boost apprenticeship rates.

Children

For those under the age of 14, the budget’s primary investment will be through the Thriving Kids program, to support children aged eight and under with low to moderate developmental delay and autism. There’s also additional funding for some educational programs and youth homelessness.

• Central to the government’s plans to curb the rampant growth of the National Disability Insurance Scheme is the creation of the Thriving Kids program. Labor has budgeted $2 billion to the program over five years, with $1.4 billion going to the states and territories to deliver services.
• Labor will invest $26.1 million across the next four years to improve educational outcomes. The bulk of the funding, $18.2 million, will go towards the Online National Assessment Platform. The rest will be spent on boosting science, technology, engineering and mathematics (STEM) teaching and learning; mental health and wellbeing programs; and supporting maths education in preschools, among other measures.
• Sports in schools and grant programs for sport participation programs will receive $50.5 million.
• Young people at risk of homelessness will receive $59.4 million, administered through the states and territories. This will cover about 4000 people aged between 16 and 24 who are receiving the Away from Home rate of Youth Allowance or ABSTUDY.

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