There is nothing timid about Treasurer Jim Chalmers’ fifth budget. Whether you like the measures within it, or loathe them, this is the most Labor budget Chalmers has handed down.

It is big, it is bold, it is redistributive. It takes aim at tax concessions long defended by the political class as untouchable. Certainly since Bill Shorten lost the 2019 election fighting for much the same policy goals.

The obvious question is, why did it take until now? The answer is political. Chalmers didn’t suddenly discover his convictions. Nor did the government only now stumble across the housing affordability crisis, intergenerational inequity or the structural unfairness embedded in parts of the tax system. 

These issues have been sitting in plain sight for years.

What has changed is the balance of political risk. Labor now governs from a position of dominance. The 2025 federal election left the Coalition shattered and Labor with a record 94 seats in the House of Representatives. That’s not just a majority, it’s a fortress. 

The Coalition's internal disarray, coupled with the growing threat from One Nation on its right flank, means that the opposition will be fighting hard just to win the seats they won at the last election, which was the worst result in the Coalition’s history.

Labor therefore has policy room to move, politically speaking. Earlier in his treasurership, Chalmers might well have wanted to go further than he ever did. 

But he was constrained by the caution that defined Anthony Albanese’s first term. Labor had won government narrowly in 2022 and governed like a party determined not to frighten anyone. The failed Voice referendum notwithstanding, it parked its ideological agendas.

 That caution ultimately helped Labor consolidate office, but it also meant Chalmers’ first four budgets underwhelmed. This one is different, again, whether you like it or loathe it.

Here, Labor has chosen to spend political capital. Negative gearing and capital gains tax changes aren’t minor adjustments. They go to the heart of wealth, aspiration, investment and the way Australians have been encouraged for decades to think about property.

Which is why there are plenty of risks with what Chalmers has announced. There will be losers, or at least people who believe they are losers. Investors are complaining, the property industry is mobilising against Labor, and there are warnings about rising rents and unintended consequences.

The Prime Minister also has a serious credibility problem. He can now be labeled a liar, a hypocrite, and not even an original one, because the ideas have been torn from Shorten’s playbook of a decade ago.

Albo and other senior MPs in Labor’s ranks have benefited from the very concessions they now seek to curtail. Albo himself minimised his tax via negative gearing for many years, and he still benefits from doing so. He’s already sold investment properties enjoying significant capital gains tax concessions, which have now been removed for everyone else. Albo’s $4m waterfront mansion on the NSW coast continues to benefit from the grandfathered negative gearing rules. If he decides to keep renting it out he can minimise the tax he pays on his taxpayer funded prime ministerial salary.

It’s not a great look. Average Australians have a right to be cynical.

Then there is the broken promise problem that’s shredded his credibility, which is perhaps even more serious than the hypocrisy charge. Albo was clear before the last election: He had no intention of changing negative gearing or capital gains taxes. Yet in the first Budget after securing a thumping majority, he has done precisely that.

There isn’t a more textbook case of a broken promise. Labor will argue circumstances have changed. But voters remember blunt assurances broken, and they also wonder whether the original promise was a lie to begin with.

The backflip also throws doubt over anything else Albo rules out going forward. Death taxes? Taxing the family home? Lifting the GST? He can rule any and all of these things out, but guess what? His word means absolutely nothing now. All of which is fertile ground for Albo’s opponents.

Which brings us to Angus Taylor. His budget reply speech tonight now matters more than it otherwise might have. Labor has given him a target, and not a small one.

Taylor also appears to understand that the Coalition can’t simply oppose Labor’s tax agenda and hope that’s enough. His plan to use tonight’s Budget reply to argue that access to welfare should be restricted to citizens is deliberately sharper than the usual budget reply fare. 

It links migration, housing pressure, budget repair and cultural unease in one political package.

Reports suggest Taylor will seek to restrict non-citizens from accessing welfare benefits other than Medicare, while tying migration levels more directly to the number of homes Australia builds, a policy he’s already announced.

Perhaps the more interesting idea, if Taylor goes there, is indexing income taxes to inflation. Bracket creep has become one of the quietest tax increases in the country, and Labor has ruled out addressing it.

Indexing the tax scales would be expensive and Treasury would hate it, but politically it would give the Opposition something more than complaints about Labor. It would allow the Coalition to argue that Labor is using the tax system to redistribute wealth while the Opposition wants to stop governments profiting from inflation. That would be a real point of difference between the major parties.

If Taylor can’t land some hits, his colleagues may soon start looking for someone who can. 

If his reply doesn’t match up to the leaked content, and is seen as too cautious, managerial and over scripted, he will waste his moment.

If Labor’s polling numbers don’t worsen and the Coalition’s support doesn't improve after a budget like this, Taylor might need to think about what comes next in life. Liberal Party MPs are nervous, as they should be. Pauline Hanson's One Nation is on the march, as the Farrer byelection result shows, and Taylor's no-welfare-for-migrants move is clearly aimed at them. 

If things don’t improve it’s only a matter of time before the Liberals start to search for a new leader who can spark a revival.