Australian news and politics live updates: Labor defends broken promises ahead of Federal Budget

Treasurer Jim Chalmers has arrived at Parliament House ready to hand down his fifth Federal Budget.

“Tonight’s Budget will be our most responsible and ambitious,” Dr Chalmers said as he arrived with a huge smile.

“There are five major packages,” the Treasurer said, detailing that they were around fuel, housing, productivity, tax reform and savings.

“The budget will be about helping people through this global oil shock”, he said, adding it would also strengthen Australia’s resilience for the future.

Jim Chalmers will unveil another four years of deficits but with a bottom line that’s $44.9 billion better than previously forecast when he hands down his fifth Budget.

The Treasurer’s improved set of books comes as Anthony Albanese said he would make no apologies for pulling every lever on housing as his government prepares to cut back property investor tax concessions, breaking an election promise.

Tuesday’s budget will show lower deficits every year compared to the mid-year update released in December.

That update forecast a cumulative $143.3 billion deficit between 2025-26 and 2028-29, already an improvement on what had been projected in the pre-election budget a year ago.

“What’s driving this improvement in the budget are the savings we’ve found and the spending restraint we’ve shown and you’ll see that tonight,” Dr Chalmers said.

He also intends to show net savings in the budget for the second update in a row and has pledged to return every single dollar of revenue upgrades to the bottom line.

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Big increases in capital gains taxes payable on share sales rumoured to be introduced in Tuesday’s Federal Budget will push investors into dividend stocks at the expense of tech or other growth companies, according to analysts.

On Monday, UBS equity strategist Richard Schellbach said Tuesday’s Budget could be the most important in years, as growth stocks lose appeal due to the perception that shareholders will have to wear the risk of losses and pay higher taxes on any capital gains.

“Usually budgets have little impact on the equity story, however these speculated tax changes could matter in terms of altering incentives and shifting flows,” said Mr Schellbach.

The Budget is expected to abandon the 50 per cent discount on capital gains for investments held for more than 12 months in favour of higher taxes on any profits linked to inflation.

“If, as speculated, the 50 per cent capital gains tax (CGT) discount is removed and replaced with some form of inflation indexation, investments which are motivated by capital gains would become somewhat less attractive,” said Mr Schellbach.

Growth-style companies listed on the share market that reinvest capital to grow their operations are the most vulnerable to a hit from the government’s proposed changes, according to Mr Schellbach.

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The Albanese Government is out and about offering up their Federal Budget spin ahead of breaking election promises that some speculate could have impacted the last election.

Finance Minister Katy Gallagher fronted the media on Tuesday morning, saying “governments change their mind”.

“I hope people look at the Budget as a whole and can see all the issues we have been dealing with,” she told Sunrise, positioning Labor as the hero of our time.

“Governments have to deal with the challenging situations they are in. We have done that with fuel. We need to do what we can to get young people into home ownership.

Ms Gallagher refused to pre-empt Treasurer Jim Chalmers’ upcoming Budget announcements, but implied the Government’s position had changed.

“When governments change their mind or come to a different view, then the responsibility is to front up and explain why you are doing it.”