Sarah Ferguson called out Treasurer Jim Chalmers for breaking Labor's election promises during a heated interview post-Budget.
Chalmers announced the 2026 Federal Budget at 7.30pm on Tuesday, including massive changes to negative gearing and capital gains tax (CGT).
The government will axe negative gearing, except for newly built properties, and replace the existing 50 per cent discount on CGT inflation-adjusted indexation from July 2027.
At the last federal election, in 2025, Labor had promised not to touch either system, which benefit property investors.
During his interview with Ferguson on ABC's 7.30, Chalmers defended the changes as necessary to helping young Australians buy their first home.
'I acknowledge that the government's come to a different view about some really important policy areas,' Chalmers said.
'The comments and commitments we made at the election reflected the government's almost singular focus on housing supply, we're maintaining that focus on supply.
'But the challenge begins there, it doesn't end there with supply.'
Jim Chalmers (above) announced changes to the capital gains tax and negative gearing
Chalmers added the current 'interaction of the housing market and the tax system is locking too many Australians, particularly young Australians, out'.
However, Ferguson was more focused on why Labor chose to backtrack on its stance just 12 months after it was voted in.
'No acknowledgement of broken promises, despite the fact that they are blindingly obvious to everybody watching,' she told Chalmers.
'Breaking ironclad election promises so blatantly, you must have spent a long time calculating the consequences.'
Chalmers breezed over the broken promises accusation and defended Labor's decision as necessary for first-time home owners.
The Budget is expected to move 75,000 existing properties from investors to homeowners and slow rising house prices.
'We are aware, that people who want to defend the current tax arrangements, or they think that the current housing market is working just fine, they will want to focus on the political element of it,' Chalmers told Ferguson.
'We're focused on the substantive issue, the substantive change. We've come to a different view on these policy areas, we're explaining to the Australian people why.'
ABC 7.30 host Sarah Ferguson (above) called out the Labor Treasurer for walking back on election promises
The pair went back and forth on whether the Budget would actually help young Australians and renters before Ferguson hammered a final point home.
'Do you accept that even if these changes are very well received amongst young voters, no one will believe a promise from this government ever again?' she asked Chalmers.
The Treasurer shot back: 'I'm not sure about that. I think that the most important thing is if we come to a different view, we explain why.
'I've taken responsibility for the fact that the government has a different view now than it had 12 months ago.
'Let's not lose sight of the actual issue that we are addressing here. The easiest thing in the world would have been for me to sit here and rationalise to you why we hadn't made any of these changes - that would have been so much easier than explaining why we have.
'But it wouldn't have been the right outcome for 75,000 Australians who would stay locked out of the housing market.'