Russian jets in ‘dangerous’ confrontation with RAF spy plane

An RAF spy plane came within six metres of a Russian fighter jet in a “dangerous” confrontation over the Black Sea, the Ministry of Defence has revealed.

Larisa Brown

2 min read

May 21, 2026 - 10:10AM

Russian Su-35 and Su-27 jets flew so close to the Rivet Joint’s nose that emergency systems were triggered, disabling the aircraft’s autopilot.

This week diplomats from the Foreign Office protested to the Russian embassy about the near miss.

John Healey, the defence secretary, said: “This incident is another example of dangerous and unacceptable behaviour by Russian pilots, towards an unarmed aircraft operating in international airspace. These actions create a serious risk of accidents and potential escalation.” He paid tribute to the “outstanding professionalism and bravery of the RAF crew who continued with their mission despite these dangerous actions”.

He said the incident would not deter the UK’s commitment to defend Nato, allies and its interests from Russian aggression.

The incident was the most dangerous Russian action against a UK Rivet Joint since 2022, when a Russian pilot tried to shoot down the plane after believing he had permission to fire.

An RAF source tried to downplay the most recent incident, saying: “It was bad practice but there was no sense of world war or immediate threat to the airframe.”

The Rivet Joint surveillance aircraft — with a crew of up to 30 — is loaded with sensors to intercept communications. The RAF crew would have been able to listen to any discussions about the intercepts.

In the incident in mid-April, an Su-35 flew close enough to trigger emergency systems on the Rivet Joint. Then an Su-27 flew six passes in front of the Rivet Joint, flying as close as six metres to its nose.

The Rivet Joint aircraft was on a routine flight in international airspace and was unarmed. It was flying as part of the UK’s work alongside allies to secure NATO’s eastern flank. The RAF crew “remained calm and professional throughout and completed their planned flight”, the MoD said.

There has been continued Russian aggression and heightened military activity in eastern Europe and the High North. Healey recently revealed that three Russian submarines had spent a month lurking over critical underwater infrastructure in the North Atlantic. British personnel, ships and aircraft were deployed alongside British allies to monitor the submarines.

Russian submarines ‘tried to spy on UK while world distracted by Iran’

Military chiefs believe a war with Russia is possible as soon as next year, before Nato has time to rearm sufficiently to deter Moscow.

There are concerns that any peace deal between Ukraine and Russia will merely give President Putin the chance to rebuild his arsenal and attack Europe. European officials are already asking how the next war might start. Russia is likely to want to test NATO’s resolve, possibly by attacking one country in a way that seeds doubt and sows discord among alliance members.

Sir Keir Starmer is expected to approve £18 billion in extra spending for defence over the next four years as soon as this week after coming under pressure from Jonathan Powell, the national security adviser, and other cabinet colleagues. Healey has been fighting for more money and is keen to have the defence investment plan published before the Nato summit in Ankara.

The Times

A Russia jet came so close to the RAF plane over the Black Sea, it set off emergency systems and disabling the plane’s autopilot.

Keating defends Chalmers and Albanese amid CGT backlash, as Minns blasts feds on income tax

Minns’ intervention on the need to let workers keep more of what they earn came on top of his refusal to endorse Chalmers’ changes to the CGT discount.

By Paul Sakkal, Shane Wright

4 min. read

View original

“Yet when Jim Chalmers announces a policy principle to restore the equity of taxing capital profits on a basis of equality with the taxation of income – we hear the howls for continuing preference.”

In response to investors’ claims that money would shift to places like Singapore and New Zealand which don’t have a capital gains tax, Keating said: “Punters with a big idea won’t be put off by some marginal change to the tax rate.

“The rush of entrepreneurial blood to the brain always dominates.”

Keating’s defence of Chalmers came a week after the treasurer, who wrote his PhD on Keating’s pro-market reforms, restored the CGT discount to a model similar to the one Keating created before Howard’s changes.

Critics say it was correct to scrap negative gearing and the CGT discount on housing. But they worry that by extending the changes to all assets, young entrepreneurs taking big risks would lose out and older people who invest in blue-chip shares would win.

Another talking point out of last week’s federal budget, billed as Labor’s most ambitious, was the government’s decision to offer a permanent $250 tax offset known as the Working Australian’s Tax Offset. Opposition Leader Angus Taylor followed up by pledging a structural change to income tax that would index the thresholds to inflation, permanently handing back bracket creep. Chalmers rejected indexation, and suggested Labor would continue to use the offset to provide relief.

Prime Minister Anthony Albanese.Dominic Lorrimer

Minns lent weight to the campaign for indexing proposed by Taylor. Keating and his union ally, Labor doyen Bill Kelty, have previously called for the top marginal rate of 47 per cent to be cut because, as Keating has said, the internationally high rate was “confiscatory”. So has independent MP Allegra Spender.

Minns told reporters: “The top marginal rate is 47 per cent. As I said in parliament last week, you work Monday, Tuesday, and half Wednesday for yourself and then Wednesday, Thursday, and Friday for the government, that’s a tough burden.”

“I know budgets are under pressure but, in a general sense, whether it’s now or in the future, we do need to make sure we’re taking urgent action when it comes to personal income taxes.”

Taylor seized on Minns’ comments on the tax contest, which has created an ideological tussle over aspiration that is set to dominate political debate before the next election.

“Even state premiers can see what Anthony Albanese will not admit,” he said.

The Victorian labor government did not buy in, saying only in a statement: “We are currently assessing the implications for businesses in Victoria.”

In Melbourne, Chalmers pushed back against Minns by noting that marginal tax rates did not operate in the way Minns had suggested.

“One of the problems with our tax system right now is it’s out of whack. It doesn’t reward work sufficiently, which is why we’re cutting taxes five times in three different ways,” he said.

“We’re taking some difficult decisions to fix that.”

Chalmers signalled some CGT changes for the start-up sector. These changes are unlikely to satisfy a growing host of critics including independent MP Allegra Spender and former Labor adviser Lachlan Harris who worry the new inflation-measured discount will chill investment and hurt many business people, not just startup founders.

Keating introduced the CGT in 1985 as part of a broad tax package that included deep cuts to personal and company tax cuts plus the creation of the fringe benefits tax. The Coalition then, led by John Howard, vowed to axe the tax at the 1987 election.

In 1999, then-Liberal treasurer Peter Costello overhauled the CGT, replacing the inflation-indexation system with a flat 50 per cent discount on all nominal capital gains. It was expected to boost investment into the share market, but critics argue that it instead drove a near 25-year surge in house prices.

Shadow treasurer Tim Wilson used a National Press Club speech to hail what he called a “truly organic” social media campaign which has poked fun at Labor’s CGT changes. He described Albanese as “the guy in that group assignment that does none of the work, but still wants the grade”.

“Where we should have got unity, we had the prime minister stoking fights around kitchen tables of the nation, pitting children against their parents, grandchildren against their grandparents,” Wilson said.

“It is a budget so absent of ambition for our nation that its failure is shown up in its own numbers.”

Chalmers blasted Wilson, describing his speech as “the least coherent, least credible shadow treasurer hit-out after a budget that anyone can remember.

“Tim Wilson’s misinformation and his lies didn’t last 30 minutes of scrutiny,” Chalmers said. “First of all, their policy is for bigger deficits and more debt and more inflation”.
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ABC, SBS reject federal government, special envoy’s definition of antisemitism

The ABC warned that examples associated with the definition could “risk conflating legitimate political and policy critique with antisemitism”.

By Calum Jaspan

3 min. read

View original

That would “establish a clear national understanding of antisemitism across all areas of state and federal government responsibility,” she wrote. “Consolidating a uniform national definition of antisemitism is a critical first step toward co-ordinated action.”

Antisemitism has been on the rise in Australia in recent years amid Israel’s war in Gaza. In December, the Bondi Beach terror attack on a Hanukkah celebration claimed the lives of 15 people and led to the royal commission.

Progressive, Islamic and pro-Palestinian groups have opposed the definition, saying it stifles free speech and legitimate criticism of Israel.

A spokesman for Segal was contacted for comment. Alex Ryvchin, co-chief executive of the Executive Council of Australian Jewry, said it was ludicrous that people were still debating definitions of antisemitism when it was such a serious threat to Australian life.

“The IHRA definition is being used by the royal commission as well as governments around the world, including our own,” Ryvchin said.

On the first day of the royal commission in February, commissioner Virginia Bell admitted the definition was “not free of controversy”. The definition itself was not controversial, she said, but two examples of the definition in use were controversial because they had led to suggestions that criticising the Israeli government could be wrongly branded antisemitic.

One of the 11 provided examples suggests it could be antisemitic to claim Israel’s existence is a “racist endeavour”.

The ABC pointed to the definitions in its statement, saying that some of the “illustrative examples have become increasingly contentious and are widely regarded as ambiguous”.

“These examples have been the subject of highly politicised debate internationally and have, in some contexts, been applied in ways that risk conflating legitimate political and policy critique with antisemitism,” the ABC spokeswoman said.

“The ABC notes that the IHRA’s core definition – ‘antisemitism is a certain perception of Jews, which may be expressed as hatred toward Jews’ – is not inconsistent with the ABC’s understanding or practical application of antisemitism.”

Bell told the hearing in February that her view was that concerns about the examples pay insufficient attention to a requirement that they be interpreted in context, and to the terms of the definition itself.

Text surrounding the core definition produced by IHRA notes that: “Criticism of Israel similar to that levelled against any other country cannot be regarded as antisemitic.”

The divergence in definitions of antisemitism is consequential in part because Segal last year recommended she monitor the media to ensure “accurate, fair and responsible reporting” on the issue.

Segal’s report said that funding for institutions such as the ABC and SBS should be withheld if they are found to have promoted division or spread false or distorted narratives.

“Funding agreements or enabling legislation should be drafted to ensure that public funding can be readily terminated where organisations or individuals engage in or facilitate antisemitism,” the report reads.

According to the FOI documents, SBS met with Segal in April last year and acknowledged the report she produced. SBS agreed that all media organisations should engage in fair, accurate and responsible reporting, but said it was monitored by its audiences every day and was accountable to its own code of practice and independent ombudsman.

In a statement, an SBS spokesperson said the broadcaster was independent, focused on social cohesion and took great care with its language and terminology.

“SBS acknowledges there are diverse definitions of antisemitism and does not adopt or endorse any one organisation’s definition,” the spokesperson said. “SBS’s role is to report on these issues in a balanced and impartial way.”

The recent federal budget included an additional $3 million over three years to extend production of SBS Examines, a podcast which focuses on “dispelling misinformation and disinformation impacting Australia’s social cohesion, especially in multicultural and multilingual communities”.

SBS has reported extensively on the impacts of antisemitism on the Jewish community, it said, and as the multicultural and multilingual broadcaster, it plays a vital role in fostering social cohesion and “giving a choice to underrepresented groups”.

Progressive Jewish lobby group, the Jewish Council of Australia, challenged the use of the IHRA definition in the ongoing royal commission last week, arguing that it blurred the line between hate speech and political speech. Several other Jewish groups of much longer standing are solidly in favour of the definition, arguing it is a vital tool to help root out overt and coded antisemitism.

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>A Pacific island nation on the front line of the climate change threat is building land to try to hold back rising sea levels.

>But as the majority of Tuvalu’s population applies to relocate to Australia, a haunting question is being confronted: what happens to a country if the people have to leave?

>in brief

>Calls for action have been made after the alleged killing of two children and a woman in Sydney.

>Anthony Albanese has said "we know what's required here".

Treasurer says 'death tax' claims are a scare campaign, 'pure and simple'

By senior political correspondent Jake Evans

A new minimum tax rate on trusts used to manage wealth inherited after death is being labelled a "death tax" by the Coalition, though no tax would be taken at the time the assets are passed on.

The federal government wants to impose a minimum 30 per cent tax rate to end the practice of wealthy Australians splitting their income using a "discretionary trust" in order to reduce how much of their income is taxed at the top bracket.

But the Coalition says extending that minimum tax to a certain category of trusts, called discretionary testamentary trusts, is an effective "death tax".

And unlike former Labor leader Bill Shorten's 2019 pitch to tax trusts, this time discretionary testamentary trusts have not been exempted.

What are testamentary trusts?

A discretionary testamentary trust is established in a will. When a person dies, the trustee and beneficiaries are able to use any inheritance placed in the trust the same way as an ordinary discretionary family trust, including deciding whether to split assets equally or unequally, and when those assets are sold.

But unlike a tax on inheritance, derisively called a "death tax", the assets established in a testamentary trust are not taxed when they are passed on, only when they are disbursed, as with an ordinary trust.

And while a fixed trust allows a person to pass on their assets to be managed by a trustee in a pre-arranged way, discretionary trusts can manage the timing of disbursements and who receives them to avoid the highest tax brackets.

The trusts are uncommon, with only about 10,000 in use in Australia, or 1 per cent of all trusts.

But for those who use them, the Coalition argues the government's proposed changes will be a "death tax by stealth", guaranteeing tax is paid on the assets inherited through a trust when they are eventually disbursed.

Treasurer Jim Chalmers says the Coalition is wrong to call the minimum 30 per cent rate on disbursements from discretionary testamentary trusts a death tax.

"There are no changes to death duties or inheritance taxes in the budget that we announced on Tuesday night. As the budget papers make very, very clear, the deceased estates, fixed trusts, and existing discretionary testamentary trusts are all exempt from the changes that we announced on Tuesday night," Mr Chalmers said.

He said people would still be able to set up fixed testamentary trusts, which could disburse assets in a consistent way, "if they want to avoid the minimum tax".

"If people want to avoid paying the minimum tax into the future with the kinds of testamentary trusts that they set up in wills, they can continue to do that if it's a fixed trust," Mr Chalmers said.

>"I know that there's a campaign being run. We expect that when changes are being made in the tax system more broadly, but this is a scare campaign, pure and simple."

Labor has previously faced scare campaigns, at federal elections, claiming the party plans to impose a death tax. (Supplied)

The treasurer also noted existing testamentary trusts would be grandfathered from the minimum tax, and fixed trusts will not be affected.

And some types of income, such as primary production income and income relating to vulnerable minors, will also be excluded from the changes.

Is it a 'death tax'?

The Tax Institute's head of tax Julie Abdalla said it was "understandable" why some people might perceive the proposed changes to testamentary trusts as a kind of death tax if it was limiting the tax options available after someone died.

"The issue is less about taxing the transfer itself and more about changing the tax treatment of structures that have traditionally formed part of estate planning arrangements," Ms Abdalla said.

She said testamentary trusts were not just used by wealthy families, but also for protecting inheritances from family law or creditor risks, and providing flexibility for beneficiaries whose circumstances changed over time.

And that legal protection is one reason why discretionary trusts have become more popular than fixed trusts.

As opposed to fixed trusts, where the beneficiary effectively owns the assets set out for them in the trust and therefore those can become subject to claims by a former partner or other claimant, because a trustee determines what gets disbursed, to who and when, there are no assets guaranteed to a beneficiary that could become subject to a claim.

Ms Adballa said the government should be careful not to affect Australians using testamentary trusts for legitimate purposes.

"If there are integrity concerns around the use of particular structures for tax outcomes that are inconsistent with policy intent, those concerns should be consulted on and addressed in a targeted way," she said.

"The key question is whether reforms are appropriately targeted at behaviours of concern or achieving broader policy considerations, rather than reducing the effectiveness of a long-established estate planning tool more generally."

KPMG tax consultant Brent Murphy said there were pitfalls the government would have to avoid.

"These structures have been established to legitimately provide for the needs of beneficiaries who sometimes might not have the capacity to fund themselves, it's often why these trusts are set up," Mr Murphy said.

"It's not just as a way to manage wealth, it's a way to provide protection for those who might not be in the best position to look after themselves.

"I don't know if I'd describe it as a death tax, but it can certainly result in testamentary trusts paying more tax … than they do under the current model."

Mr Murphy noted that often beneficiaries of testamentary trusts were taxed above a 30 per cent marginal rate anyway, and so the changes would be a disincentive, but would not end testamentary trusts entirely.

Deputy Liberal leader Jane Hume said the government was misrepresenting families using trusts for legitimate estate planning purposes.

"It's not about avoiding tax, it's not about not meeting your obligations … this government doesn't trust Australians to do the right thing," Senator Hume said.

The Coalition has accused the federal government of attempting to sneak through a "death tax". (ABC News: Matt Roberts)

The number of discretionary trusts, where money can be moved around to minimise tax, has doubled since 2001 to 840,000, and they make up the vast majority of trusts in use, though testamentary trusts are much more niche.

The government says its minimum tax rate on trusts will not affect 95 per cent of tax filers.

Coalition seizes on broken tax promises

Prime Minister Anthony Albanese said the government's suite of tax changes would level the playing field for workers and those receiving income from assets.

"What we have put forward very clearly is a comprehensive policy, and of course when it comes to trusts, if people want to continue the existing discretionary testamentary trusts there's no change," Mr Albanese said.

The Coalition has seized on another broken promise by the federal government on tax in two terms, after the prime minister swore a re-elected Labor government would not touch tax settings on capital gains or for negative gearing.

It says that breach of faith, and the last term's reversal on a promise not to fiddle with the already legislated stage three tax cuts, leaves voters in doubt over what else could be changed.

"The spectre of broken promises, now that it has actually been delivered, could apply more broadly. It could apply to the family home, it could apply to a death tax. I mean, who would believe this guy?" Coalition frontbencher Andrew Bragg asked on Friday.

Returning to the centre may be the only way the walking dead Liberals can rise again

Tom McIlroy

Even for Victoria’s usually dysfunctional Liberal party division, the untimely death of member John Ternel was a schemozzle.

A member for more than a decade, Ternel twice sought preselection to run for the Libs in suburban Melbourne seats. Unsuccessful both times, he quit after this month’s Farrer byelection.

After he resigned his membership, Liberal officials sent the party rank and file a mass email announcing Ternel’s death. The ABC first reported the announcement – complete with the subject line “Deceased Member” last week.

Ternel isn’t dead but, like a growing roster of Liberal members, he has signed up with One Nation and publicly criticised his old party for losing direction and focus.

At the weekend, former Liberal senator Hollie ­Hughes defected to Pauline Hanson’s One Nation as well, along with former party vice-president Teena McQueen, a friend of mining billionaire and Hanson supporter Gina Rinehart.

The exodus – which remaining Liberal figures expect to continue as the party flounders in the polls – mirrors the existential crisis facing the UK Conservatives right now.

At least eight senior members including former home secretary Suella Braverman and onetime leadership candidate Robert Jenrick have moved to join Nigel Farage’s party, which is enjoying a surge in public support. Local members are quitting too and Reform swept local government elections in the UK this month.

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High-profile movements reflect what’s going on under the surface in the Liberal party. Already with an ageing membership, dissatisfaction and resentments are testing long-held loyalties and putting at risk local branch structures, volunteer firepower and the party’s fundraising capacity.

McQueen caught headlines for dining with Rinehart at Donald Trump’s Mar-a-Lago club or celebrating the defeat of moderate Liberal MPs at the hard-right CPAC Australia conference in 2022. Unable to win back a spot on the Liberal executive, she has instead declared: “I’m 100% behind Pauline.”

Hughes was another senior woman gone. A former assistant minister, until she quit after being dumped in a preselection dispute, she blames the now opposition leader, Angus Taylor. Both she and McQueen will use their profiles to attack Taylor and add to the growing hype around Hanson.

One Nation’s latest rise looks set to fuel the malaise sapping the Liberal party before the next election. Taylor’s party was never a real chance in the Farrer byelection and Monday’s Newspoll in The Australian had One Nation on a primary vote of 27%, ahead of the Coalition on 20%. Nine’s Resolve monitor had One Nation on 24% but still ahead of the Coalition.

Like the UK Tory leader, Kemi Badenoch, Taylor’s position is not guaranteed up to the election.

Good news for Hanson will mostly remain bad news for Taylor, with one possible silver lining. If more rightwing diehards like McQueen exit to join Hanson, the remaining Liberal loyalists might be able to reorient their movement back to the centre.

Serious strategists such as Labor’s election mastermind Paul Erickson and Liberal operative turned pollster Tony Barry say a return to the centre is the only way the opposition can win again. To do that, the Liberals need the exodus of public support to turn back their way.

For his part, Taylor struck on a smart message when asked about the defections at the weekend. Amid frustration with Labor’s budget measures on negative gearing, trusts and capital gains tax, he told Sky anyone angry at Anthony Albanese and Jim Chalmers should join the Liberals, not One Nation.

If he fails, Liberal officials might need to write their own political death notice sooner than we think.

• Tom McIlroy is Guardian Australia’s political editor

Melbourne psychiatrist refuses new patients who don’t consent to AI note-taking

Josh TaylorTechnology reporter

Tue 19 May 2026 01.00 AEST

A Melbourne psychiatrist has refused new patients unless they agree to allow her to use an AI scribe to transcribe the conversations in their sessions.

AI-driven note-taking tools are becoming popular within the medical industry – with two in five general practitioners now using such scribes, according to the Royal Australian College of General Practitioners (RACGP).

But there have also been concerns about the security of the data and how it might be used by the AI companies, along with the accuracy of the transcriptions.

In a registration form seen by Guardian Australia, psychiatrist Dr Hemlata Ranga outlined the requirement to potential patients.

“I consent for use of AI transcription (such as Heidi health AI/ Microsoft) software to assist with notes taking during the appointments, for preparation of clinical letters, reports, and other clinical documents to assist in my clinical care,” the form says.

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The patient is told if they do not wish AI to be used they will “need to arrange [their] regular doctor/ referring doctor to refer [them] to a different service provider”.

The uptake of AI scribes has doubled in 12 months, the RACGP says, and comes amid increased demand for mental health services.

But one patient, who asked to remain anonymous, who was referred to Ranga told Guardian Australia they objected to AI being used in their sessions.

“The way [the form] was worded – so defensively – it made me think that maybe there are a number of other people who have said something and that it’s gotten to the point where they just thought: ‘I just don’t want to deal with their objections any more. Let’s just make them sign something that says that we have to use it’.”

The patient said finding a psychiatrist was not like going to another chemist, especially when Ranga came recommended to them, and has not sought another psychiatrist.

“She’s not easily replaceable and the process of having to go back to your doctor, make an appointment and often wait on another wait list to get back in … all just because you don’t want to use AI … it’s really weird.”

Ranga, whose practice is in the Melbourne Clinic in Richmond, did not respond to a request for comment.

A spokesperson for the Melbourne Clinic said it does not direct its accredited psychiatrists on their use of AI but understands psychiatrists were increasingly incorporating the use of AI to help manage administrative load.

“In those cases, psychiatrists will disclose the use of AI to all patients and request consent prior to its use. If consent is not granted, they will not use AI.”

The spokesperson said practitioners at the clinic are ultimately independent from the clinic.

Heidi AI – one of the most popular AI scribes – has been used in 115m sessions in the past 18 months.

The Melbourne co-founder of Heidi AI, Dr Tom Kelly, said in March that data was processed in the country the patient was in and was not used to train the AI or sold to others. The company uses third-party testing and auditing to keep the data secure, and aims to ensure high standard in transcripts – but said doctors still need to check their notes.

Risks and regulations

The head of policy for Digital Rights Watch, Tom Sulston, said AI transcription was imperfect and was often trained on male, white, heterosexual, English-speaking users, meaning mistakes were more common for other demographics.

He said there was also a “very real risk” of medical data being compromised or leaked, and patients who were wary of AI scribes may self-censor.

“That’s particularly important with healthcare that may carry stigma in wider society – sexual and mental health, for instance,” he said.

“AI is not implemented to improve healthcare outcomes or patient experience, but to reduce administration costs for a clinic.”

“In this scenario, patients are not the customer, they’re the product.”

According to the RACGP, consumer groups have raised concerns that consent conversations with patients over use of AI tools are either lacking, or there’s a power imbalance between patients and doctors.

Sulston said no one should be denied healthcare because they do not want to be forced to give their private data to AI and called for stronger regulation, given the tools are now exempt from Therapeutic Goods Administration regulations because they do not diagnose patients.

“Regulators and legislators need to step-up and provide Australians with a legally enshrined right to refuse AI systems without facing repercussions to our health,” he said.

The patient said people should be able to opt out of scribes and suggested they were not confident the notes made would be accurate.

>With trade disrupted, Beijing has banned exports of sulphuric acid to shore up its domestic supply.

>It means Australian manufacturers are facing a difficult choice: either stock up on the highly corrosive and combustible chemical or go without their key ingredient.

Budget’s three misfires that lock in an intergenerational wealth divide

Treasurer Jim Chalmers’ fifth budget may ultimately be remembered for three political miscalculations.

Chris Brycki

4 min read

May 17, 2026 - 12:00AM

1. Misreading Gen Z’s aspiration

Miscalculation one is believing Gen Z has given up on aspiration.

At the core of the budget appears to be an assumption that younger Australians believe the system is already broken beyond repair and therefore simply want wealth redistribution instead.

I think that’s a huge misreading of how younger Australians actually think.

Yes, Gen Z knows housing affordability has become dramatically worse and they know buying a home is far harder than it was for their parents and grandparents.

But that doesn’t mean they’ve stopped wanting to get ahead. And it definitely doesn’t mean they want a future where the remaining pathways to building wealth become harder too.

What I see every day with our clients and team is that younger Australians still strongly aspire to build wealth and create opportunities for themselves.

If they can’t afford property yet, they still want to build wealth through investing, starting businesses and slowly compounding savings over time.

Many young people are investing to build wealth or save for a future home deposit. Picture: iStock

We have thousands of younger clients investing regularly specifically to save for a future home deposit or other goals. They’re sacrificing spending today because they still believe disciplined long-term investing can improve their future.

That aspiration hasn’t disappeared. If anything, it’s become stronger because younger Australians know they can’t rely on property alone.

Many younger Australians may interpret this budget very differently. To them, the path to building long-term wealth may now feel harder and less rewarding unless they already own assets.

The irony is that while the budget was likely designed to appeal to younger voters frustrated with inequality, it may instead reinforce the feeling that Australia no longer rewards ambition, discipline and long-term thinking.

2. Breaching Gen X and Millennials’ trust

Miscalculation two is believing Gen X and Millennials won’t feel betrayed.

The second political mistake may end up being even larger.

Many Gen X and Millennial voters believed they were voting for a relatively moderate government that would avoid major changes to longstanding investment settings. For many of those voters, this budget will feel like a fundamental breach of that trust.

As much as these generations support issues like climate action, inclusion and social progress, a government that makes people feel they can no longer realistically get ahead financially risks creating a very serious backlash. Eventually, household financial outcomes matter politically.

People still want the opportunity to build a future for themselves and their families. They still want to believe that saving, investing and taking calculated risks will improve their lives over time.

The government appears to believe these policies will improve housing affordability by discouraging speculation and increasing supply. But once the higher tax settings apply, many investors may become far more reluctant to sell at all.

Instead, many investors may simply hold onto assets for longer, creating a classic lock-in effect where investors defer selling assets because the tax cost of crystallising gains becomes materially higher.

Ironically, that could reduce housing market turnover without materially improving affordability.

Many investors may become more reluctant to sell at all, reducing housing market turnover. Picture: David Crosling/NewsWire

If fewer investors sell property, the affordable housing supply younger Australians were promised may never materialise. At the same time, landlords facing reduced after-tax returns may attempt to offset those losses through higher rents.

A version of this has already played out in New Zealand. In 2021, the government there removed interest deductibility for residential investment properties in an attempt to “level the playing field” for first-home buyers. Instead, rents kept rising while rental supply tightened. Ultimately, the policy became so politically unpopular that the next government moved to reverse it.

By the next federal election, many Millennials may still find home ownership out of reach while rental affordability deteriorates further. At the same time, alternative pathways to building wealth through shares, ETFs and businesses may feel increasingly closed off.

That’s a politically dangerous combination.

3. Favouring Baby Boomers

Miscalculation three is unintentionally favouring Baby Boomers.

Ironically, the generation that may quietly benefit most from this budget is actually Baby Boomers.

Their primary residences, which in many cases have experienced extraordinary tax-free growth over several decades, remain untouched.

Baby Boomers remain insulated after accumulating significant wealth under the previous CGT rules. Picture: iStock

Many older Australians have also already accumulated significant wealth under the previous capital gains rules. Their existing shares, investment properties and business assets will effectively end up grandfathered under far more favourable settings than younger generations will receive going forward. Superannuation also remains largely protected.

So while younger Australians face the prospect of higher taxes on long-term investing outside super, many older Australians remain insulated by assets accumulated under the previous system.

That creates a very powerful perception problem around fairness.

Many younger Australians don’t resent wealth itself. What they resent is feeling like the rules changed after previous generations had already benefited from them.

To many younger Australians, the gate to financial security feels like it’s closing in front of them.

They look at their parents’ generation buying homes cheaply, benefiting from decades of asset growth and accumulating tax-advantaged wealth. Then they’re told their own pathway to financial security will involve higher taxes on investing and fewer opportunities to compound wealth outside super.

The intergenerational divide this budget may ultimately create is therefore not necessarily the one Labor intended.

Instead of younger Australians turning against wealthy older generations, many may simply conclude that the system no longer rewards aspiration at all.

And once a generation concludes the system no longer rewards discipline, aspiration and long-term thinking, the political consequences can arrive much faster than governments expect.

Chris Brycki is the founder of online investment adviser Stockspot.

Ironically, the generation that may quietly benefit most from this budget is actually Baby Boomers.

Treasurer Jim Chalmers’ fifth budget may ultimately be remembered for three political miscalculations.

‘My church or the dog?’ Brethren orders members to purge pets, sparking fears of global cull

Secretive sect the Exclusive Brethren has ordered members to get rid of pets, leaving Australian families “heartbroken” and facing a devastating choice.”

By Sherryn Groch

Secretive religious sect The Plymouth Brethren Christian Church has ordered its members to purge their homes of animals, leaving some Australian families heartbroken as they feel pressured to kill or abandon their pets.

Members inside the group, formerly known as Exclusive Brethren, say some animals, including a kitten, have already been put down since this month’s edict from the sect’s upper echelons, which has controversial ties to conservative politics and substantial financial holdings.

The directive, obtained by this masthead, that “every household should be freshly” cleansed of “dirty” animals follows a dog attack on a young relative of Brethren leader Bruce Hales last month, and has conjured memories of a widely reported purge of pets by the sect in the 1960s that horrified the public.

As one Melbourne family made plans to dump their cat four hours out of town so it “could never find its way back home”, others told this masthead they would defy the order. In New Zealand, a member shared pictures mourning her kitten, which multiple people in the church said she had been pressured into euthanising this month.

The Brethren instructs its 50,000 members in Australia and around the world to live separated from society. But it has drawn scrutiny for its involvement in recent elections, campaigning for the Liberal Party, and was raided by the Australian Tax Office in 2024.

The kitten euthanised this month in New Zealand, according to Brethren members, because of the new global edict against pets.

On May 2, at closed Brethren meetings across Australia, Canada, NZ, the UK and elsewhere, a letter from leadership was read out detailing a dog attack on a four-year-old relative of the Hales family at a member’s home. The boy survived but required stitches on his face.

“The ownership of such an animal, let alone it being kept at a brother’s home, is clearly wrong,” the letter read. “There are reports of some Brethren having reverted to owning pets, including dogs and other animals, which practice has been clearly spoken against in ministry.

“Every household should be freshly exercised [concerned] to ensure the standard … is carried forward and maintained.”

The directive referenced several Brethren teachings, including that “disposing of dogs” was not enough: birds, “mice out, cats too” and that pet owners should then confess to the sect’s “assembly”.

Following recent scandals, the Brethren now commonly orders its instructions be “destroyed after reading”, but multiple recordings of the meetings were shared with this masthead, along with sect texts detailing past “disposals” of “unclean” pets.

More than a dozen current and former Brethren members told this masthead they worried another major purge of animals was imminent. Many spoke on condition of anonymity, fearing repercussions.

One Victorian member said her heart sank as the directive was read out, a rare explicit order from leadership. “Normally, we only get them for elections and things.”

Her service dog had helped her through “many tough times”, even as he drew disapproving comments within the sect, she said.

“Times when I was so suicidal, without thinking, I’d go to step in front of traffic, and he’d pull me back,” she said. “If I’m asked to choose between my church and the dog, it’s going to be the dog.”

A drawing ex-member Andrew Hart made of his cat as a child. His cat was soon after put down in the UK, in 1964, under the Brethren pet ban.Andrew Hart

Another family said their elderly aunt had also come under repeated “priestly” pressure to get rid of her beloved companion dog. “We’re worried they’ll finally make her [do it] now, and she’ll be totally alone,” they said.

The church tells adherents that loving animals distracts from devotion to God, but members say they view this latest command as “another test to make us prove our loyalty” in a sect where much of daily life, from money to family, is strictly controlled by leadership.

“There could be another walkout,” said one member. “Some aren’t happy. We’ve got [leadership] living in mansions while lots of us are struggling.”

The church dismissed concerns of a pet cull as a conspiracy led by “anti-Brethren activists”, claiming no one in the sect would hurt an animal.

“The recent message from church elders read out at meetings was … simply a reminder of a principle that was established some time ago,” a spokesman said.

“The church would never condone cruelty to any living creature,” he said, adding some members still kept livestock.

The church also denied the 1960s pet purge, calling it “completely untrue … to the best of our knowledge”. The ban and associated cull was well-documented in newspapers, academic papers and books around the world, as well as the Brethren’s own ministries.

When asked why members being made to “dispose of” pets is so often referenced in Brethren texts, which also say “the best dog is a dead dog”, the church did not answer.

Joy Nason pictured with her beloved cat Tiddles in the 1960s.Joy Nason

Joy Nason, who grew up in the Brethren in Sydney, recalls being ordered as a teenager to take her family cat to the vet to be euthanised when the ban first came in about 1963.

“I was told to say he had a sore foot, that’s why he had to be put down, and, of course, to tell no one it was Brethren business,” she said.

“I was terrified if I didn’t, I’d go to hell. Even giving animals away, they said, was a sin. I was so upset, I couldn’t stay to watch and, in my heart, I always hoped that vet saw through me, and had Tiddles rehomed instead.”

Back then, newspapers in Australia and overseas reported Brethren bought the gas ether to put their animals to sleep at home, when vets discovered the trend and refused to euthanise.

Some members told this masthead that other pets were killed by more brutal means – drowned, shot or clubbed – at times in front of children. At least three blind Brethren were “ordered to destroy” their guide dogs, though some refused and were instead ex-communicated.

Since then, members said pets had crept back into the lives of Brethren, especially after the pandemic. Some would hide their animals or send them away when hosting Brethren events, even as others openly owned cats, birds and smaller animals, believing the old edict applied only to dogs, or excused working animals.

“But you never know which of the thousands of rules they’ll suddenly enforce so you’re forever on eggshells,” said one member. “A lot of us have pets now.”

Coverage of the first pet purge by the Exclusive Brethren included this article on the RSPCA investigating, published in The Daily Mail February 7, 1964.

Reports of animal cruelty connected to the sect have continued in the years since the first purge, and more recent “reminders” of the ban from leadership have frequently seen animals killed or dumped again.

A Melbourne woman put down her cats three years ago when the edict was mentioned in passing at a meeting, according to three members. In NSW in the 2000s, an ex-member said Brethren asked farmers to shoot their dogs for them.

“Fear of getting caught flouting the rule means it’s kept secret,” said one member. “Though my father has always enjoyed shooting cats.”

Another woman recalled coming home from holidays as a child in the 1990s to find their litter of puppies missing. “We found out years later, they’d come and drowned them,” she said.

Ex-member Cheryl Bawtinheimer, who has accused a Brethren member of sexual abuse and is being sued by the church for copyright infringement over her podcast’s use of a logo, said she had been flooded with messages from people inside the church “panicking” about the new crackdown.

“One’s cat’s just had kittens. They’re refusing to get rid of them,” she said. “People are still scarred from the first ban.”

Bawtinheimer and more than a dozen sources connected to the church estimate that thousands of animals around the world have been killed over the decades because of the Brethren’s ban, and others mistreated or abandoned.

Late on Friday, after further questions from this masthead, the Brethren said it had decided to hold a service over the weekend, it claimed to “reinforce” the message that cruelty was not acceptable, and members should explore options to rehome their pets.

Ex-member Neville McCallum, who vividly recalls Brethren killing their animals during the 1960s, said the sect frequently enforced “bizarre” rules such as the pet ban as “a test of loyalty”. He managed to get around it where he lives in New Zealand by calling his pet a guard dog for his vineyard.

“But I wasn’t ever able to take him home properly, poor thing,” he said. “Now, I’m going around to local vets here to warn them about this latest pet cull.”

Publicly, the Brethren claims it has “no specific rules” and that members instead “choose” to forgo things such as pets and television to focus on the church. High-ranking Brethren appear on its “Not-So-Exclusive” podcast claiming to live normal lives, speaking of pets or of their children loving animals.

“It’s all a lie, PR,” said ex-member Richard Marsh, who said his parents had “been forced to put down their cat, Drusilla” during the first purge.

“The cruelty to animals just day-to-day is disgusting, it’s encouraged,” said an Australian member. “I’ve had my kids in tears because of it.”

Another Victorian woman said she sent her dog away when hosting Brethren members “because I know they’ll hurt him”. “I remember one [member] tried to kick our cat, who’s been a huge emotional support for my daughter since she was little, right in front of her,” she said.

The RSPCA, which investigated the 1960s pet cull, said it had not been alerted to any recent concerns about the church, but noted it could only act on reports made by eyewitnesses to animal cruelty.

Lawyer Tom Grace, who grew up in the Brethren, said the latest pet crackdown stirred up painful memories of the 1960s purge.

“We had a cockatoo then who’d been in our family for 60 years, my grandfather gave him to us,” Grace said, through tears. “I never even considered the ban would mean Cocky. He was part of the family.”

Unable to bear the idea of killing the bird, Grace’s parents instead opened his cage, but Cocky refused to fly away. He stayed around the family home, talking to them, for more than a day.

“Then we found him dead on the ground,” said Grace. “The shock of it, must have been too much.

“It always struck me, him in that cage, as being similar to my family leaving the church. The cage is all we’d known.”

With Michael Bachelard

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Did Jim Chalmers just break property investing?

Labor’s housing tax overhaul promises (slightly) cheaper homes and fairer taxes. Critics warn it could instead deepen the rental crisis and deter investors.

Economists agree the tax changes will knock a few percentage points off house price growth, though there is uncertainty about how quickly the effect will ripple through the property market.  Bethany Rae

Michael Read and Sarah Petty

May 16, 2026 – 5.00am

Australia’s housing market has long been built around a simple assumption: if you can buy an investment property, the tax system will help you hold on to it. This week’s federal budget shattered that assumption.

Treasurer Jim Chalmers on Tuesday announced a radical overhaul of negative gearing and the 50 per cent capital gains tax discount – two long-standing features of the tax system that critics argue have fuelled investor demand and worsened housing affordability.

Most economists expect the changes to place only modest downward pressure on house prices and limited upward pressure on rents. But large sections of the property industry warn the overhaul could trigger a sharp pullback in investor demand, fuelling a fresh surge in rent.

The budget changes cement owner-occupied housing (and superannuation) as the most tax-effective way to build wealth. While younger people may have a lower chance of being outbid at auctions, they still may not be able to afford houses in markets that are among the most expensive in the world.

Sam Gordon, director of buyers agency Australian Property Scout, says the property tax changes will only lead to the “rich getting richer and the poor getting poorer” as the rental market will probably go through a supply deficit, causing rental prices to rise and tenants finding it harder to save for a home deposit.

“There’s going to be a dip in investor confidence and sentiment, and that means that there’s going to be [a] significantly lower amount of investors out there buying properties,” he says. “That’s going to create a massive shortage.

“We’re already in a rental crisis. I believe we’re about to move into that on another level.”

From July 1, 2027, investors will no longer be able to negatively gear established properties, with the concession limited to newly built homes. Existing properties purchased before Tuesday will be exempt, alongside carve-outs for superannuation funds and affordable housing.

Under the new system, investors who make an operating loss on a property will only be able to deduct it against rental income or any capital gain realised when the asset is sold, rather than against other forms of income. Excess rental losses can be carried forward and offset against future rental income or capital gains.

The changes will be accompanied by the abolition of the existing 50 per cent capital gains tax discount for individuals from July 1, 2027. It will be replaced with an inflation indexation model that taxes only the real gain made on an asset from that date onward.

Investors will also face a minimum capital gains tax rate of 30 per cent on property and shares sold from mid-2027, and assets bought before 1985 will be brought into the tax net for the first time.

HSBC chief economist Paul Bloxham says the tax overhaul will place downward pressure on house prices and put some upward pressure on rents as existing landlords raise rent to make up for their higher tax burden.

Australia Property Scout’s Sam Gordon believes the federal government’s changes to property taxes will only lead the rich to get richer, and the poor to get poorer. 

“However, the various caveats to the policies – ‘grandfathering’ arrangements, the one-year grace period, focus on existing builds, and treatment of all asset classes for CGT changes – are likely to make the impacts modest, compared to what they would be without these arrangements,” Bloxham says.

Bloxham says the tax changes are designed to curb investors’ growing share of credit demand – rising from 27 per cent of mortgage lending in December 2019 to nearly 40 per cent in December 2025 – and their purchasing of existing homes rather than new ones.

“This means that investor housing demand for existing dwellings should decrease going forward,” Bloxham says.

Ben Kingsley, chair of the Property Investors Council of Australia, predicts property investment will be driven away from regional areas and into cities, where land values traditionally increase more.

“When you look at other markets around the world and those bigger economies, they attract premium land values, and they don’t have the same tax settings as we have,” he says. “That gives me great confidence to know that property prices will continue to grow in certainly the megacities, our big economic engines.

“Typical, everyday Australians will assess residential property as still remaining a safe, steady investment, and that will continue to appreciate over time.”

Kingsley says a cohort of property investors have been cycling in and out of regional towns, where home prices are typically cheaper and there is less stock on the market, to take advantage of the current tax settings, which has not been good for the rental sector.

“Potentially, the intention of these investors wasn’t genuine in providing long-term rental accommodation. It was turning property into a commodity, and that is not where we needed to be,” he says.

“This new breed of investor was being coached in a different way to speculate on property, and so the changes to the capital gains tax will take those speculators out.

Australian property price movement in greater metropolitan areas ($m)

Sydney

Brisbane

Perth

Adelaide

ACT

Melbourne

Hobart

Darwin

2000200520102015202020250.00.20.40.60.81.01.21.4

Source: Cotality

“There will be a spike in listings in those markets, and unfortunately, the buyer demand that would support prices is going to drop off, and with that drop-off, you’re going to see price corrections in those markets.”

Prices down, but by how much?

Economists agree the tax changes will knock a few percentage points off house price growth, though there is uncertainty about how quickly the effect will ripple through the property market.

Treasury predicts estimates two measures will cause house prices to grow about 2 per cent less over a couple of years than if there had been no change. That will save someone buying a median-priced home about $19,000.

But the reduction in house price growth will also cause a modest decline in the future housing supply pipeline, which in turn will lead to a $2 per week increase in median rent.

Barrenjoey chief interest rate strategist Andrew Lilley estimates the tax changes will reduce prices by about 3 per cent to 4 per cent, while the Commonwealth Bank’s Trent Saunders estimates prices will be about 3 per cent lower than they otherwise would have been.

“The house price impact is likely to be concentrated in market segments where investor participation is highest. Apartments, townhouses and lower‑priced established dwellings are likely to be more affected than owner occupier‑dominated detached housing markets,” Saunders says.

But Saunders says there is a risk house prices will respond more sharply in the short term due to shifts in sentiment.

“If that occurs, price growth could slow by more than implied by fundamentals alone over the coming year,” Saunders says.

Saunders estimates the changes to negative gearing are equivalent to a 0.9 to 1.55 percentage point increase in investor mortgage rates in terms of their effect on a prospective buyer’s immediate cash flow.

“The effect is largest for investors with high marginal tax rates, high leverage, low rental yields and high interest expenses. That is, the investors most likely to have been negatively geared under the previous rules,” Saunders says.

But the lifetime cost of the negative gearing overhaul is likely to be lower, since investors can still carry forward rental losses to offset against their eventual profit when they sell the property.

“Some of the tax benefit may therefore still be realised later. This benefit is delayed, less valuable in present value terms and no longer helps investors fund annual holding costs. But it will undoubtedly reduce some of the effect of this policy change on broader housing market conditions,” Saunders says.

Saunders says the effect of the capital gains tax changes will not always lead to higher taxes – it would ultimately depend on what happens to inflation and house price growth in the intervening years.

“Replacing the 50 per cent discount with indexation does not always increase the tax burden,” Saunders says.

“If house prices rise only modestly above inflation, indexation can be more favourable than the previous 50 per cent discount because the investor is only taxed on the real gain. But if house prices rise strongly in real terms, the new system is less favourable because the investor no longer receives a 50 per cent discount on the full nominal gain.”

In analysis contained in the budget, Treasury found the 50 per cent discount overcompensated high-return assets like houses for inflation, but often undercompensated lower-return units, meaning they could be more attractive under the new system.

In the long term, Bloxham says the combined policy changes are likely to shift the relative incentives towards occupying a dwelling rather than renting it.

“However, it does not directly address the key fundamental challenge for Australia’s housing market: constrained supply,” Bloxham says.

The Housing Industry Association warns the immediate effect of the budget will be a reduction in housing supply. Treasury predicts the tax changes will reduce supply by 35,000 dwellings over the next decade, with 65,000 extra builds generated by a $2 billion investment in enabling infrastructure like water and sewerage pipes for new housing developments expected to take longer to materialise.

Dan White, managing director at Ray White Group, says the Australian real estate market hates a shock and the property tax changes are one of the biggest shocks the nation has experienced.

“In trying to obviously reduce house prices in the established markets and get first home owners into the market, they’ve completely forgotten about renters,” he says. “There’s 2.9 million households that rent, not all of them are going to be able to buy property. They’ve been forgotten.”

White says the push for investors to buy new builds with the abolition of the ability to negative gear an existing property had not been thought through.

“The average price of [an] investment property is so far below what it costs to build a new investment property,” he says. “So not only do you ask how can investors afford this higher price, but how [will] the renters be able to pay the rent.

“Everyone knows first home owners are in a tough spot, but this response, it hasn’t considered all the stakeholders. It hasn’t considered renters. It hasn’t considered the risk to the construction industry and the delivery of new supply.”

Gordon says the outlook for the next generation is grim, whether as aspirational property investors or those who just want the ability to buy a home.

“I think the next generation that doesn’t have the ability to buy right now, they’re then going to be growing up in an environment where it takes significantly longer to save a deposit, if they’re even able to save a deposit at all because rents have gone on this massive run,” he says.

“[Negative gearing] has been a wealth creation method that Australians have been on for such a long period of time, and now they’re taking that away from the next generation.”

The changes may reduce some of the tax distortions that have shaped Australia’s housing market for decades, but they are unlikely to end the broader political fight over affordability and supply.

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>>!Port Kembla!< residents will likely resist base due to risk of nuclear accident and potential as target for ‘military adversaries’, documents state

>Saudi Arabia bombed targets in Iraq linked to the country’s Shia militias that are aligned with Tehran during the US-Israeli bombing campaign against Iran, Reuters reported on Wednesday.