Tonight’s Federal Budget has delivered mixed outcomes for Australians of all ages, including older Australians already facing significant financial pressure.
COTA Australia Chief Executive Officer Patricia Sparrow said it was encouraging to hear the Treasurer say the Government’s Budget strategy is to take “responsibility for the challenges facing future generations” – in contrast to pre-Budget commentary that sought to pit older and younger Australians against one another. However, many older Australians already under financial pressure will still see little relief from this Budget.
“While older workers will benefit from tonight’s $250 working age tax offset and older drivers will welcome relief at the bowser, the Federal Budget has provided little direct relief for pensioners facing some of the highest increases in essential costs, particularly energy,” Ms Sparrow said.
“COTA Australia’s State of the Older Nation 2025 report found one in four Australians over 50 is living in poverty, while only 28 per cent are financially comfortable. Older Australians are not a single, uniformly wealthy group.
The much-discussed taxation reforms to capital gains and negative gearing are estimated to generate $3.6 billion while supporting the construction of 7,500 homes each year over the next decade.
The budget includes a partial grandfathering approach on all capital gains up until 1 July 2027 at the current 50% CGT discount, all properties owned prior to tonight allowed to continue negative gearing, and continued negative gearing on future newly built houses.
“This will still be a difficult Budget for many Australians, including older people already doing it tough, but we appreciate the Government has listened to concerns about a fair transition and incorporated partial grandfathering on the new taxation arrangements for some Australians approaching or planning retirement.”
Ms Sparrow said the changes to capital gains taxation would particularly affect some lower income self-funded retirees.
“The Budget changes raises the capital gains tax for some from a system based on a person’s marginal tax rate which may only be 16% or nothing to a minimum rate of 30 per cent from 1 July 2027,” she said.
“While people receiving income support, including pensioners, will be exempt, some low-income self-funded retirees and Australians on lower taxable incomes will pay more tax on the sale of assets than they would under the current system.
“For affected older Australians not grandfathered, who have carefully planned their retirement around the existing rules, these changes will have a material impact on their financial security and retirement planning.”
Ms Sparrow said while the taxation changes are designed to support younger people get into secure housing, the Budget contained little targeted support for older women experiencing housing insecurity.
“People of every age are experiencing housing stress, and older Australians are no exception,” she said.
“It’s disappointing therefore to see no targeted supports for older women, who remain one of the fastest growing groups at risk of homelessness. Intergenerational fairness should support Australians at every stage of life.”
Aged care’s largest announcement was made ahead of the Budget, with COTA Australia welcoming the Government’s decision to treat personal care as clinical care, meaning older people will pay no co-contribution for those services.
“This change is positive for the critical services older people rely on, but it was disappointing to see no additional Support at Home packages funded tonight,” Ms Sparrow said.
“Older people are waiting 12 months or longer to be assessed and then receive the support they need. While the Government is targeting wait times of no more than 90 days by 1 November 2027, COTA Australia believes no older person should wait longer than 30 days from application to receiving support.
“The impact on older people and their carers is significant, and much more needs to be done to address unacceptable waiting times.”
Ms Sparrow said previously announced changes affecting private health insurance affordability, alongside broader reforms affecting retirement finances, would place additional pressure on many older Australians already carefully managing household budgets.
COTA Australia also noted the $3.2 million committed to consultation on further private healthcare reforms should include a focus on whether insurance products and services are genuinely delivering value for long-term policy holders.
“We are particularly concerned about the impact of changes to the private health insurance rebate,” Ms Sparrow said.
“If people drop private health cover altogether, or reduce their level of cover because it becomes unaffordable, pressure simply shifts onto already overstretched public hospital systems. Older Australians are among the biggest users of healthcare and the rebate has helped many maintain their cover.”
Ms Sparrow said the post-Budget debate must not lose sight of the fact older Australians are far from a uniformly wealthy demographic.
“The real divide in Australia is not between generations, but between those doing well and those being left behind,” she said.
“It’s important to remember that one in four older Australians lives in poverty.
“The stereotype of the ‘rich boomer’ is lazy, divisive and wrong. For every older Australian living comfortably, there is another counting every dollar, delaying healthcare or struggling to make ends meet.”
Ms Sparrow said the Budget also missed an opportunity to commit to a long-term national strategy for Australia’s ageing population.
“If the Government is serious about addressing intergenerational inequity, it needs a long-term plan for ageing in Australia, not short-term fixes,” she said.
“A 10-year, whole-of-government ageing action plan would help ensure Australians of every generation can age with security, dignity and opportunity.
“Planning for an ageing population is something Australia must prepare for now, not just for the benefit of today’s older Australians, but for people of all ages.”
Patricia Sparrow will be in Canberra and available for interviews.
Media contact: Alana Mew, 0419 929 722 or Tamara Kotoyan, 0430 291 890