CEO Update: Beyond the Budget noise

Nearly two weeks since the Federal Budget and it doesn’t look like the noise surrounding the proposed tax changes has lost any momentum. We stand by our analysis on Budget night that the Government deserves credit for expending political capital on much needed tax reform. Changes that restore indexation, narrow the gap between the way in which income from capital and labour are taxed, incentivise investment in new housing and productive risk-taking are steps in the right direction. 

There are legitimate concerns from businesses and start-ups, and these can and should be addressed. More broadly, we must find a way to reduce the high reliance on personal income taxation and what this means for incentives to work and invest in education. With the RBA watching every stimulus dollar that was always unlikely this year, but we should be pushing hard for reform in future budgets. I think the Treasurer has made clear that this is a focus, not least through the importance he has placed on the newly introduced Working Australians Tax Offset as a new tool in the tax reform toolkit. 

Stephen Smith from Deloitte Access Economics and I have co-authored an opinion piece on the tax changes, where we highlight that if the reaction to this Budget convinces politicians that serious tax reform is too dangerous, the economic cost for all Australians will be large. I will share this article in my next update. 

The Budget contained a meaningful focus on reducing regulatory burden and improving harmonisation across the federation. This can play a huge part in reversing the slide in business dynamism and start-up activity highlighted in CEDA research. We will be watching closely to ensure these measures and actions to rein in spending are delivered. 

Labour force data out last week provided a moment for pause. Unemployment has climbed steadily from its 3.5 per cent low in mid-2022, ticking up another 0.2 percentage points to 4.5 per cent. Hours worked rose sharply, which is a partial offset, but the RBA will be watching closely for signs of further softening. The figure that should be getting more attention is youth unemployment, which has jumped nearly a full percentage point to 11.1 per cent. 

It was genuinely energising to be in Brisbane last week for our Queensland Health Delivery conference. The conversations were insightful and the themes consistent: workforce capability matters as much as headcount; scope-of-practice reform is a lever we're not pulling hard enough; AI optimism is real but only realisable with minimum data standards in place; and we need to shift the culture from risk aversion to risk intelligence. The recurring frustrations — short-term funding cycles, weak consumer agency, process over outcomes — aren't new, but the appetite to fix them felt sharper than usual. We look forward to sharing details about our NSW Health Delivery conference later this year. 

Reconciliation Week 2026 takes place from 27 May to 3 June. This year’s theme, All in, reminds us that reconciliation and advancing the rights of Aboriginal and Torres Strait Islander peoples is the responsibility of all. Please check out Reconciliation Australia’s website to see how to get involved. 

On Thursday 29 May, we welcome WA Deputy Premier and Treasurer, the Hon. Rita Saffioti, back to the CEDA stage to deliver the 2026 State Budget address. We will then turn our attention to WA’s Critical Minerals & Rare Earths, where we’ll explore how Western Australia can capture long-term value and help drive the global energy transition to a lower-carbon future. 

Tasmania State of the State 2026 brings together the Tasmanian business community on 3 June, to hear directly from Premier Jeremy Rockliff on the Government’s priorities for the year ahead, the state’s economic outlook and the key initiatives shaping Tasmania’s future. 

Be part of the conversation at State of the Nation in Canberra from 24 to 26 June, when the Prime Minister, the Leader of the Opposition and a diverse lineup of CEOs, economists, academics and community leaders examine the reforms, investment and leadership needed to strengthen Australia’s long-term prosperity and competitiveness. 

As our program of work continues, we ask you to consider a donation to CEDA before 30 June. CEDA exists to provide sustained, independent thinking that directly influences public policy. Your support directly impacts our ability to create meaningful change, driven by a public voice that isn't beholden to any single sector or interest. 

A tax-deductible donation to CEDA directly funds our programs across research, government and industry engagement, and convenings. 

To finish, I would like to warmly welcome ZRG Partners as new CEDA members. Thank you for joining us.