Seven dead, scores missing in Kyiv after Russian drone hits apartment building.

Extract from ABC News

• Topic:Unrest, Conflict and War

6 hours ago

Residents of a Kyiv apartment building were seen in tears after Thursday's attack. (AP: Efrem Lukatsky)

In short: 

Seven people are dead and at least 20 believed missing after a Russian drone struck an apartment building in Kyiv on Thursday, local time.

The attack was part of a third straight day of widespread attacks on targets across Ukraine.

Russia is intensifying its attacks on population centres despite Vladimir Putin remarking that the war is near its end.

Link copied

Russia has unleashed widespread drone and missile attacks on Ukraine for a third straight day, demolishing an apartment building in Kyiv and hitting targets across the country.

Ukrainian President Volodymyr Zelenskyy said seven people were killed and dozens more injured in the strike on the apartment building in the capital's leafy Darnytsia neighbourhood, located between a suburban forest and the Dnieper River.

A further 20 people were believed to still be missing, Mr Zelenskyy said.

Wisps of smoke rose from the collapsed nine-story apartment block, where emergency workers dug under concrete slabs and took people away on stretchers. The building's entrance was smashed in the strike, preventing residents from escaping.

Rescue workers are scouring the rubble for 20 people believed missing in the Kyiv apartment building. (AP: Evgeniy Maloletka)

All 18 apartments in the building were destroyed, officials said. Among the dead was a 12-year-old girl, Mayor Vitali Klitschko said.

Further strikes elsewhere in the country wounded more than two dozen civilians.

Mr Klitschko declared Friday to be a day of mourning for the victims.

Emergency workers were forced to use cherry pickers to rescue residents after the building's entrance was hit by a drone. (AP: Evgeniy Maloletka)

Ukrainian officials noted that the attack coincided with US President Donald Trump's trip to China.

Foreign Minister Andrii Sybiha said Mr Trump and Chinese leader Xi Jinping have sufficient leverage to compel Russian President Vladimir Putin to end his 4-year-old invasion of Ukraine.

"At the very time when leaders of the most powerful countries are meeting in Beijing, and the world hopes for peace, predictability and cooperation, Putin launched hundreds of drones, ballistic and cruise missiles at the capital of Ukraine," Sybiha wrote on X.

"Only pressure on Moscow can make him stop," Mr Sybiha said of Putin.

Ukraine pummelled this week

Mr Zelenskyy said Russia had fired ballistic and cruise missiles in the attack, adding that Moscow had launched more than 1,560 drones against Ukrainian population centres since Wednesday.

In all, some 180 sites across the country were damaged, including more than 50 residential buildings, he said.

Ukraine is accusing Russia of ramping up drone attacks to co-incide with Donald Trump's visit to Beijing. (AP: Evgeniy Maloletka)

British Defence Secretary John Healey called Thursday's attack "shocking" and said he had accelerated UK deliveries of air defences.

Russia's Defense Ministry said the military aimed at Ukraine's military-industrial complex, including air bases and fuel and transport facilities, claiming it hit all its targets.

Among the weapons deployed, it said, were Kinzhal missiles, which Moscow says can fly 10 times the speed of sound.

Russia has hammered Ukraine with large-scale aerial attacks following a ceasefire which lasted between May 9 and 11, that Mr Trump said he asked Mr Zelenskyy and Mr Putin to heed. Fighting continued over those 72 hours, although reportedly at a reduced intensity.

The attacks undercut recent suggestions from Mr Trump and Mr Putin that the war, which began with Moscow's all-out invasion of its neighbour in 2022, is nearing its end.

The latest waves of attacks are some of the biggest in the four years since Russia launched its full-scale invasion of Ukraine. (Reuters: Thomas Peter)

'A terrible night'

More than 30 people were injured in the apartment building collapse, while emergency workers rescued 28 residents, Interior Minister Ihor Klymenko said.

Lyudmila Hlushko, 78, said she heard explosions and the sound of rockets about 3am. "Then the house shook violently and there was a loud bang, breaking the glass in my house," she told The Associated Press.

The blast shattered windows throughout the neighbourhood.

"It was a terrible night," said another resident, Nadiia Lobanova.

"We're used to this. Well, it's impossible to get used to this, but somehow we held on."

Russia launched over 1,500 drones at Ukraine in the space of 48 hours. (AP: Evgeniy Maloletka)

Damage was reported in six districts of the capital, according to Tymur Tkachenko, head of Kyiv's Military Administration.

The Kyiv office of defence contractor Skyeton, specialising in reconnaissance drones, was destroyed in the overnight attack, although the company said it had anticipated such a development and had relocated its production.

Russian drones also struck a vehicle carrying UN staff who were delivering aid to residents of Kherson in southern Ukraine, Mr Sybiha said.

The vehicle was marked and was attacked twice, in two different locations, but nobody was hurt, he said.

Russia's biggest attacks since invasion

The Ukrainian cities of Kremenchuk, Bila Tserkva, Kharkiv, Sumy and Odesa also were bombarded, officials said.

"We are now experiencing the largest strikes since the start of the full-scale invasion," air force spokesperson Yurii Ihnat told Ukrainian public broadcaster Suspilne.

Ukraine's air defence forces are under severe strain, he said. Even so, the interception rate of drones and missiles was over 93 per cent, Mr Zelenskyy said.

Air defences shot down or jammed 693 Russian targets overnight, including 41 missiles and 652 drones of various types nationwide, the air force said.

Fifteen missiles and 23 drones scored direct hits across 24 locations, it said. Debris from downed drones fell in another 18 locations.

Strikes on energy infrastructure left customers in Kyiv and 11 other regions temporarily without power, national grid operator Ukrenergo said.

On Wednesday, a rare daytime attack on Kyiv killed at least six people, Mr Zelenskyy said. That assault, which involved 800 drones, struck about 20 regions and was among the longest such attacks of the war.

AP

Archaeologists work to restore colonial-era boat found during construction of Barangaroo metro.

Extract from ABC News

By Julia André

• Topic:History

1 hours ago

Link copied

Maritime archaeologists are working to restore the oldest colonial-era boat ever found in Australia.

It was discovered during construction of the Barangaroo metro station on the edge of Sydney's CBD in 2018 and is expected to be on display at the Australian National Maritime Museum (ANMM) by the middle of 2027.

"We knew we'd find a few archaeological pieces, but we never thought we'd find something this incredible right in the middle of the Barangaroo station site," Sydney Metro head of operations Hugh Lawson said.

The remnants of a colonial-era boat were discovered during construction of the Barangaroo metro station in Sydney. (Supplied: NSW government)

The boat is estimated to have been used by British settlers between 1790 and 1830 for trade across Sydney Harbour.

Archaeologists also believe it travelled south to the Shoalhaven and north to Newcastle, with its timber traced back to eucalypt species found along the Hawkesbury River.

Maritime archaeologists are working on the restoration of the vessel. (Supplied: NSW government)

"It's our earliest example of taking those traditional boat building techniques from the UK and using them in Australia with Australian timber," maritime archaeologist Benjamin Wharton said.

"It's all Australian hardwoods coated in pitch, so once that was all in the ground as well, it really created a good environment for it to be stable."

The boat is estimated to have been used by British settlers between 1790 and 1830 for trade across Sydney Harbour. (Supplied: City of Sydney Archives)

Archaeologists took two months to painstakingly excavate the boat piece by piece, all of which had to be kept moist for over a year while a facility was built to preserve the overall vessel.

"This is an incredible story of one of our newest forms of transport uncovering one of the oldest forms of transport in the colony, the early days of ship building and the use of ships in Sydney," NSW Transport Minister John Graham said.

Reconstructing a 200-year-old boat

Archaeologists traced the boat's timber back to eucalypt species found along the Hawkesbury River. (Supplied: City of Sydney Archives)

The ANMM team used newspaper reports, diary entries and government records from the time to try to understand the type of trade that was happening and how the boat would have been used.

Mr Wharton is now investigating how to reconstruct the boat, like a huge, delicate jigsaw puzzle.

"We're coming up with different ways for cradle structure, how to join two bits of wood together using custom-made fasteners, also looking at the timbers to research methods of construction," he said.

 Benjamin Wharton says reconstructing the boat's remnants is like a puzzle. (Supplied: Australian National Maritime Museum/Juri Puisens)

Hundreds of items which give a snapshot of everyday life in the new British colony were also well-preserved alongside the boat's remains, in layers of silt.

"There's glass bottle fragments, lots of decorated ceramics, leather shoes, smoking pipes, toothbrushes, even bones of remnants of things that people ate," maritime archaeologist James Hunter said.

"You can see the bite marks of humans on cow, sheep and pig bones, and then you can see where rats have gnawed into the bones after humans have thrown those bones away."

Hundreds of items were also well-preserved alongside the boat's remains, in layers of silt. (Supplied: Australian National Maritime Museum/Juri Puisens)

Dr Hunter said all the items dated to the mid to late 1830s, which indicated that was when the boat was abandoned.

"At that stage, convicts were still coming here, but we also had free settlers coming in but it was still a colonial outpost on the far side of the world," he said.

He said the artefacts showed settlers were trying to replicate their lives in Europe and boats were instrumental to life in the new colony, whether that was for moving goods, people or information.

Why Pope Leo rejects the logic of modern war.

Extract from Eureka Street 

• Home
• Vol 36 No 8
• Why Pope Leo rejects the logic of modern war

RELIGION

• Andrew Hamilton
• 07 May 2026                                   

 

In recent weeks, Pope Leo XIV has spoken out strongly in favour of peace and has deplored war in the context of the Middle East and other conflicts. In doing so he has also spoken on behalf of the Catholic Church against attempts to justify going to war on Christian grounds. The press and liberal critics of President Trump have seen these remarks as an attack on the President. So has President Trump himself. As a result, the Pope and the Catholic Church more generally have become the flavour of the month for critics of the President, much to the delight of those Catholics who prize such favour. The Pope, however, has denied that he was targeting individuals.

His denial deserves reflection because it discloses the three groups whom Pope Leo represents and the different audiences with whom he engages.

Pope Leo speaks first as a Christian believer. At the heart of his faith is trust in a God who loves each human being dearly and joins humanity in Jesus to free people from the chains of sin. Christ embodies God’s love as he reaches out to the poorest and most ostracised members of society, gathers a small community committed to radical trust and love, is rejected by religious authorities and their Roman overlords, is tortured and killed, and then rises to deliver the promise of life beyond death, of God’s mercy over human sin, and of a community committed to living out his radical way in gratitude.

Central to this faith is recognition of the high value of every human being, a commitment to love and non-violence, a realistic assessment of the lethal consequences of fear, selfishness and anger, and hope in God’s accompaniment. It advocates a preference for peacemaking. When addressing both fellow Christians and other audiences on the subject of war, Pope Leo speaks out of this faith and focuses on the suffering of war’s victims.

Second, Pope Leo also addresses Catholic Christians as Bishop of Rome. In the Catholic Church, he and his fellow bishops are responsible for encouraging a lived and authentic faith among Catholics in their communal life and in their engagement with the world outside the Church. In these interactions they believe that God’s Spirit is at work. In his speeches Pope Leo addresses the Catholic Church, comforts people who suffer, pleads for peace and negotiation, deplores war, and refutes any claim made for its religious justification.

Third, Pope Leo speaks to people of all religions and of none as a fellow sinful human being who is also a Christian and the Catholic Pope. To this general audience he insists that each human life is precious and that persons are not to be treated as a means to a strategic end. This conviction lies at the heart of the Christian Gospel. He addresses both people who share this high view of human life but ground it differently, and those who regard some human lives as expendable.

This public conversation naturally focuses on just war theory, whose initiation is attributed to St Augustine but which has been refined both in Catholic teaching and in international law to respond to the changing shapes of war. It describes the conditions that both the decision to go to war and the actions involved in it must meet if they are to be considered just. To be justified, a war must satisfy each of these conditions.

 

“Respect for the human dignity of each person leads him to mourn for, and plead the cause of, those who are victims of war and to insist on diplomacy instead of warfare.”

 

It must be legitimately declared, it must be a last resort after diplomacy has failed, it must be fought for a just cause, it must pursue an attainable objective, and ensure that the harm and destruction caused by the war are proportionate to the good sought in it. Similar conditions also govern the actions taken in pursuit of its goals. They exclude the killing of non-combatants or prisoners and require that the damage caused to persons and society by any action be proportionate.

In his recent remarks on war, Pope Leo does not appeal directly to just war theory. But it is central to the development of Catholic reflection on war and underlies his constant insistence on negotiation, conversation and mediation as alternatives to war. Catholic reflection on war, as enunciated by recent Popes, has come close to concluding that modern war is always unjustifiable because of the destructive power of modern weapons, which destroy human lives and relationships far beyond the sites of conflict. War also breeds the hatred that seeds further wars. Only the case of armed resistance to an unjust invasion holds back a total condemnation of war.

This analysis suggests why Pope Leo speaks so uncompromisingly against modern wars, focuses so closely on the persons who are the direct and indirect victims of war, and has denied that he is condemning President Trump and other leaders in his remarks about war. Respect for the human dignity of each person leads him to mourn for, and plead the cause of, those who are victims of war and to insist on diplomacy instead of warfare. The same respect for human dignity calls Pope Leo to engage respectfully even with those responsible for war. Even when, in their own conduct, they may fail to show that same respect.

 

---

Andrew Hamilton is consulting editor of Eureka Street, and writer at Jesuit Social Services.

Chalmers challenges the politics of negative gearing.

 Extract from Eureka Street

• Home
• Vol 36 No 9
• Chalmers challenges the politics of negative gearing

AUSTRALIA

• David James
• 14 May 2026                                  

 

It had to happen eventually. The federal government’s decision to abolish negative gearing on property investment, with the exception of newly built homes, has gone a long way towards correcting the biggest distortion in Australian society: the tripling of property prices this century, which has made it impossible for most younger people to own their own home. Among other things, it has been a factor preventing many people from starting their own families.

The government will, in parallel, abolish the 50 per cent capital gains tax discount on properties held for more than a year, replacing it with a deduction indexed to inflation. This is less dramatic than it might appear. The 50 per cent policy was introduced because it was claimed, implausibly, that calculating the effect of inflation was difficult and that using the 50 per cent figure would simplify it.

Goodness knows why; it is not difficult. A simple Google search will tell you that an asset bought in Australia in 2010 would have had its purchasing power reduced by approximately 35 per cent by 2026 because of cumulative inflation. That is fairly close to the 50 per cent discount. Investors who got into the market a long time ago will not be greatly affected, whereas more recent buyers will.

For the purists, removing negative gearing is an unjustified move because, as a general principle, interest costs in, say, a business can be used to reduce tax liability. But for anyone who lives in the real world in Australia, it should have been obvious that negative gearing is the main reason we have a property bubble, and that it had to be brought under control at some point.

Negative gearing, whereby rental losses can be used to reduce tax on other forms of income, is not unique to Australia. Germany, Japan, Canada and Norway all have similar approaches, including allowing unused losses to be carried forward to offset future tax liabilities. Other countries, including the US, have less generous approaches, and the UK has abolished it. The country whose policies are closest to Australia’s is Canada, and its household debt is even worse than ours, at 130 per cent of GDP.

More than a fifth of all residential dwellings in Australia are held by property investors, equating to more than 2.2 million houses. About a fifth of taxpayers own at least one investment property, and they have been receiving about a third of total housing finance. It has become the nation’s favourite financial pastime.

Investors can typically outbid younger buyers because they have collateral from the home in which they live, whereas first-home buyers tend to rely on whatever savings they have cobbled together. That is what is most likely to change with the abolition of negative gearing. First-home buyers will no longer find themselves being outbid by older investors.

 

“It has rather been the banks’ willingness to lend, especially to investors, that has driven up prices and financialised the whole country, turning a fifth of the population into property gamblers.”

 

Negative gearing has had a dramatic effect on tax receipts. Approximately $7.4 billion in revenue has been forgone by the government this financial year, which equates to about a quarter of the budget deficit. That figure will not drop quickly, however, because the changes apply only to new purchases. The policy is unchanged for investors who have already bought.

There will be an impact on share investment and cryptocurrency purchases, because the capital gains tax changes apply to any asset. That will increase the incentive to hold shares for longer in order to gain the benefit of inflation indexing.

Politically, the calculation is revealing. The government is breaking its promises from before the last election, which is anything but new. It has probably done so because the main beneficiaries, baby boomers, who bought when prices were far lower, are declining as a proportion of total voters. The last federal election was the first in which Gen Z and Millennials outnumbered Baby Boomers.

This writer can recall running a column more than 20 years ago by Mark Latham in Business Review Weekly in which he argued for the abolition of negative gearing. He was ridiculed from all sides, presumably because at the time it was seen as electoral suicide. That is no longer the case.

Apart from the greater fairness of the policy for anyone under 40, it will at least start to slow the severity of the property-price bubble, which about a year ago reached valuation levels comparable to the peak of Japan’s 1989 property bubble relative to GDP.

Japan’s excesses went down in folklore as the most ridiculous ever seen. It was claimed at the time that the property around the Emperor’s Imperial Palace was worth more than the state of California. Australia has actually surpassed that. Hopefully, we will not have a crash like the one that has kept Japan in permanent recession for 35 years.

Yet again, there is no mention of the real culprit in these excesses: the banks. It has not been a supply-and-demand problem, or the result of high immigration, neither of which explains the extent of the bubble. Property developers do have a disproportionate effect on state governments, and they have manipulated the supply of land. But the idea that there is a shortage of land in Australia is completely risible. Australia is one of the least densely populated countries on Earth, fourth after Greenland, Mongolia and Namibia.

Rather, it has been the banks’ willingness to lend, especially to investors, that has driven up prices and financialised the whole country, turning a fifth of the population into property gamblers. As that effect weakens, banks’ profits are also likely to slow. After all, the reason the banks were so willing to lend is that the bigger the mortgage, the more money they make.

One hopes that as the attractiveness of property investment eases, Australians with money to invest will turn to more productive options, rather than financial manipulation. Financialisation of any sort — the making of money out of money — is, in the end, a dead end that destroys societies.

 

---

David James is a finance and business journalist. His Substack is: https://davidjames.substack.com/

 

Israeli strikes on vehicles near Lebanon capital Beirut kill at least 12.

Extract from ABC News

• Topic:Unrest, Conflict and War

3 hours ago

An Israeli airstrike hit a car in the Lebanese coastal town of Jiyeh, south of Beirut. (AP Photo/Mustafa Jamalddine)

In short:

Israeli strikes on vehicles have killed at least 12 people in Lebanon, according to Lebanon's health ministry.

Militant group Hezbollah and Israel have continued trading blows despite a US-mediated ceasefire announced last month.

What's next?

Representatives from Israel and Lebanon are due to meet for two days of peace talks in the United States.

Link copied

Israeli strikes have killed at least 12 people in Lebanon, including two children, according to Lebanon's health ministry, on the eve of a new round of peace talks between the two countries.

Militant group Hezbollah and Israel have continued trading blows despite a US-mediated ceasefire announced last month.

The hostilities have largely focused around southern Lebanon, where Israeli forces are occupying a self-declared security zone.

But, according to Lebanese security sources, seven drone strikes targeted vehicles, including some on a coastal highway, just south of Beirut, well beyond the main area of conflict.

According to Lebanon's health ministry, eight people, including two children, were killed in those strikes while three others were killed in strikes on cars further south in the Tyre district while one person was killed near the southern city of Sidon.

The Israeli military did not immediately comment on the strikes.

It said it was striking Hezbollah infrastructure in southern Lebanon and told residents to leave nine towns and villages where it intended to act against the group.

Meanwhile, Hezbollah announced new attacks on Israeli forces in the south, including using kamikaze drones.

The United States is set to host two days of talks between Israel and Lebanon on Thursday and Friday. 

The talks will build on an April meeting led by US President Donald Trump and aim to advance "a comprehensive peace and security agreement", according to US State Department spokesperson Tommy Pigott.

But Hezbollah has strongly opposed the face-to-face contact between the two nations.

A building was damaged during an Israeli airstrike in Dahiyeh, Beirut's southern suburbs, last week. (AP: Hassan Ammar)

The militant group has confirmed that the commander of its Radwan force was killed in an Israeli strike in Beirut's southern suburbs last week - the first attack on the capital since the April 17 ceasefire.

Ahmed Ali Balout was one of the most senior Hezbollah figures killed in the war so far.

UN worried about ongoing fighting

Beirut claims 380 people had been killed in intensified Israeli attacks since the ceasefire took effect.

Hezbollah chief Naim Qassem vowed to turn the battlefield into "hell" for Israeli forces.

The UN peacekeeping force deployed in southern Lebanon, known as UNIFIL, said it was increasingly concerned about fighting between Hezbollah and Israeli soldiers near its positions, putting peacekeepers at risk, including with explosions of drones in and around UN bases.

During a meeting with the US Ambassador to Lebanon Michel Issa on Monday, Lebanese President Joseph Aoun urged the US to put pressure on Israel to cease fire and stop home demolitions in the south.

Israel has been razing villages in the south, where it says it aims to shield northern Israel from Hezbollah militants embedded in civilian areas.

Israeli Prime Minister Benjamin Netanyahu has maintained that Hezbollah's disarmament would be a fundamental demand in peace ⁠talks with Lebanon.

But Hezbollah refuses to disarm, saying the subject of its weapons is a matter for national dialogue after the war.

The Lebanese health ministry says 2,896 people have been killed since the war broke out on March 2, including 587 women, medics, and children. 

About 1.2 million people have also been displaced from their homes in Lebanon, many of them fleeing from the south.

Reuters/AP

Six dead as Russia launches over 800 drones at Ukraine.

 Extract from ABC News

• Topic:Unrest, Conflict and War

2 hours ago

Ukrainian President Volodymyr Zelenskyy says six people are dead after one of Russia's biggest drone attacks of the war so far. (Reuters/State Emergency Service of Ukraine)

In short:

Ukrainian President Volodymyr Zelenskyy says six people are dead in one of Russia's biggest drone attacks of the war so far.

At least 800 drones were launched by Russia's military.

It came as authorities in Russia's capital Moscow ordered restrictions on the spread of photos of drone attacks.

Link copied

Russia has launched a massive daytime aerial assault on Ukraine, with Volodymyr Zelenskyy saying six people had died as a result.

The attacks came after a short-lived ceasefire between the two sides to mark the the anniversary of the Soviet defeat of Nazi Germany over the weekend.

The Ukrainian president said the Russian military had launched at least 800 drones through the day on Wednesday, local time.

"My condolences to their families and loved ones. Since midnight, at least 800 Russian drones have already been launched, and the attack is ongoing, with additional drones entering our country's airspace," he wrote in a post on X.

"According to our intelligence, after all the waves of drones, missile launches against Ukraine are also entirely possible.

"Our warriors are defending Ukraine, but Russia's obvious aim is to overload air defense systems and inflict as much grief and pain as possible specifically during these days."

Damage was reported across Ukraine following hours of Russian attacks. (Reuters: Nina Liashonok)

A presidential adviser to Mr Zelenskyy told Reuters Russia's strikes hit Ukrainian railway facilities 23 times through the course of Wednesday.

Slovakia closes Ukrainian border

In his post, Mr Zelenskyy suggested Russia had launched the attacks to coincide with US President Donald Trump's visit to Beijing.

"In this difficult geopolitical moment, Russia is clearly trying to disrupt the overall political atmosphere and draw attention to its evil — seeking to do so at the expense of Ukrainian lives and Ukrainian infrastructure."

On Wednesday afternoon, local time, Poland's military said Russia's attack on Ukraine had concluded for the time being.

At the same time, neighbouring country Slovakia announced it had indefinitely closed its border crossings with Ukraine for security reasons.

Volodymyr Zelenskyy is accusing Russia of acting out of desperation in launching these latest strikes.

Meanwhile, authorities in the Russian capital Moscow announced they were imposing restrictions on the publication of photos of videos showing the aftermath of "terrorist attacks", including drone strikes, according to the Interfax news agency.

Russia launched its invasion on Ukraine in February 2022, more than four years ago, and has conducted near-daily drone and missile attacks in recent years.

Drone deal with Lithuania

Both sides of the war have increasingly embraced drone warfare as the conflict has dragged on.

In recent weeks, Ukraine has used drone technology to target Russian oil infrastructure in a bid to undermine the country's economy.

It has also spruiked its expertise in drone warfare to allies in a bid to shore up support for its war efforts, in a move that has gained particular importance since the outbreak of the Iran war.

In a further sign that Ukraine was emerging as a key player in drone technology, Mr Zelenskyy said Ukraine and Lithuania signed a drone deal on Wednesday.

"A Ukrainian military expert team will work in Lithuania to develop the necessary security capabilities … to counter modern threats and strengthen the security of our countries and the entire region," Zelenskiy said after meeting the Lithuanian president in Bucharest.

"The challenges we face are shared, and we must overcome them together," he added.

Labor bets the house on young Australians' desperation to buy their own.

Extract from ABC News 

Analysis

By chief digital political correspondent Clare Armstrong

• Topic:Budget

1 hours ago

Anthony Albanese and Jim Chalmers have made generational equity the test for this budget. (ABC News: Callum Flinn)

Link copied

Labor is betting the house on young Australians' desperation to buy their own.

The political gamble of ripping up investment property tax settings barely 12 months after explicitly promising not to do so is high risk.

With public trust in institutions sinking to historic lows, there's less chance of forgiveness for a government that goes back on its word.

But Prime Minister Anthony Albanese and Treasurer Jim Chalmers are making a calculated guess, no doubt backed up by reams of internal Labor research.

They know the job of convincing the electorate to accept sweeping changes to negative gearing and capital gains tax is already half done.

No one born after the wedding of Princess Diana and Prince Charles needs an economics degree to understand that the current housing system is not working for them; they've experienced it firsthand.

Never mind the crushing disappointment of turning up to an auction only to realise the winning bidder was motivated by a raft of generous tax settings.

Labor unveils 'ambitious' plan for tax reset in 2026 budget

Banking on young voters

Housing prices have now climbed so high that plenty of millennials and elder Gen Zs wouldn't even consider registering for a paddle.

Most parents are also acutely aware — and increasingly anxious about — how hard it is for their children to get a foothold on the property ladder.

So, Labor can bank on those voters as supporters of any policy changes that help level the playing field for first home buyers.

But ask any Australian who is happy with Tuesday night's tax U-turn, and it's likely they would have backed such a proposal at the ballot box a year ago.

If this base from which the government could build consensus for reform already existed, the question is why they didn't use it to secure an election mandate?

In the coming days, the one thing Albanese, Chalmers, and any other minister fronting a camera are guaranteed to be asked is "why now?"

What changed to make a proposal that was so untenable just a short time ago into the centrepiece of a federal budget?

Chalmers attributes the backtrack to a recent realisation that the housing crisis was too severe to limit the government's response to boosting the supply of homes, when other levers were at its disposal.

And if that dubiously timed epiphany doesn't convince, he urges Australians to focus on the "substance" of the policy announcement over the politics.

Not a suggestion the Coalition will be taking up, having already vowed to oppose the changes, citing the standalone impact of a forecast reduction in 35,000 new dwellings built over the decade. 

An opportunity for opposition

Labor is offsetting that with a $2 billion investment in local infrastructure to support the construction of 65,000 additional new homes over the same period.

Beyond that, the government is relying on its persuasive powers to dissipate voter anger eventually.

The strategy has all the hallmarks of Labor's approach to rewriting the stage-three tax cuts in its first term after promising not to at the 2022 election.

In fact, it was that experience that drove journalists to question Albanese's assurances last year that negative gearing and CGT reforms weren't on Labor's agenda.

Stage three had proven that governments don't change their mind until they do.

Being constantly asked to restate his position visibly irritated the PM last year, but in the end, Australians gave him the benefit of the doubt.

It is unlikely he will be afforded the same luxury in 2028.

Labor has so comprehensively dismantled the pact made between voter and politician at the ballot box, that there is little chance ministers will be taken at their word next time. 

That presents a significant opportunity for political opponents to exploit.

$250 tax break for millions of workers in federal budget 2026

Labor will raise taxes on investment properties and some trust funds, giving the revenue back to workers with a new $250 tax break under reforms it says will "rebalance" the Australian tax system.

Evergreen scare campaigns about secret plans to impose inheritance taxes or include the family home in certain asset calculations are far more likely to take hold in an electorate primed to assume the government is probably lying.

Albanese's thumping 94-seat house majority gives Labor a buffer to weather such attacks, and lots of his caucus will be happy the party has expended political capital in this way.

Many members of his current frontbench were there when former Labor leader Bill Shorten first took similar tax changes to the electorate a decade ago.

Shorten picked up 14 lower house seats at the 2016 election with a policy platform that included winding back CGT and negative gearing.

But it's the election three years later, when those same policies, along with others, copped substantial blame for Labor's defeat, that likely sticks more in the mind.

The political gamble of ripping up investment property tax settings barely 12 months after explicitly promising not to do so is high risk. (ABC News: Adam Kennedy)

A blatant transfer of wealth

With all of the revenue from the changes announced on Tuesday being returned in the form of tax offsets for workers and businesses in the short term, Labor can neutralise some criticism.

But the government will still be accused of redistributing wealth from older, wealthier asset-owning Australians to younger, generally poorer workers.

Labor argues this blatant transfer of wealth is actually "rebalancing" a system that for many decades allowed those asset owners to tip the scale in their favour.

Albanese and Chalmers have made generational equity the test for this budget.

If the reforms help younger Australians believe home ownership is within reach, Labor can expect to collect a political dividend.

But if the promise of a fairer housing market fails to materialise, the government will have traded one of the most valuable commodities in politics — trust — for very little in return.