Budgets and the Moral Imagination of a Nation

This blog has been developed from budget analysis and policy reflections by Gershon Nimbalker, National Director of Common Grace, and Eliza Johnson, Policy Coordinator at Common Grace.

The release of the 2026/27 Federal Budget has already sparked fierce debate.

It arrives at a moment when the world feels increasingly unsettled. The ongoing conflict in the Middle East continues to drive immense human suffering, while also fuelling economic uncertainty across the globe. Rising oil prices, cost-of-living pressures, and growing questions about the stability of the global rules-based order are shaping the atmosphere into which this budget has been delivered.

And so, beneath the headlines about tax reform, housing and cost-of-living relief, this budget aspires to achieve something significant. It is attempting to reshape parts of Australia’s economic system and rebalance who benefits from it.

Budgets are often discussed in the language of deficits and surpluses, productivity and markets. But budgets are never merely economic documents. They are moral documents. They help shape the conditions in which people and communities either struggle or flourish, and reveal something about the kind of society we are choosing to imagine and build together.

As Christians, we believe economics and politics are ultimately about people. About neighbour-love. About whether our common life is organised in ways that help all people and creation flourish.

This year’s budget appears to represent one of the most ambitious structural reform agendas Australia has seen in decades. The changes to negative gearing, capital gains tax and trust taxation are not small adjustments around the edges. They are substantial shifts aimed at redistributing opportunity and resources away from accumulated wealth often concentrated in the top 1-10% of Australians, and toward workers, younger Australians, and those increasingly locked out of housing security and economic stability.

Whatever people think of the specific policies, there is a seriousness and ambition to this moment that should be acknowledged. At its heart is a question that feels deeply moral and deeply theological: what does justice look like in a society where many people, particularly the young and marginalised, feel secure housing, stability and hope slipping further out of reach?

Scripture consistently calls God’s people to pursue justice and to build communities marked by compassion, dignity and care for one another. The flourishing of a nation cannot simply be measured by markets alone, but by whether people are able to participate in community, raise their children in hope, care for creation, and experience the goodness God intends for all people and all creation. 

This budget delivers much that should be celebrated, and glimmers that we warmly welcome, but also still falls far shy of the vision of justice, dignity and flourishing that we should aspire to as a nation. There are important measures that we want to see in each area that Common Grace advocates in that have not been taken (read on below), significant cuts and uncertainty surrounding the National Disability Insurance Scheme, a large uptick in defence spending while aid languishes at record lows, and little change for those on job seeker, often the poorest in our communities.

Moments like this remind us that public life matters. The systems we build matter. And followers of Jesus are called not to retreat from those conversations, but to help imagine and call for a society shaped less by fear and scarcity, and more by justice, generosity and the flourishing of all. 

Common Grace Justice Areas

Justice for People Seeking Asylum

Glimmers in the 2026 Budget: 

• A small increase to the Status Resolution Support Services (SRSS) payment - a regular financial payment from the Australian Government for eligible people who have sought asylum in Australia to help with basic living costs whilst their immigration status is being determined. However the payment remains well below the poverty line and below standard Centrelink rates. 
• $85.2 million allocated over four years to Trades Recognition Australia to improve skills assessments - this is an important first step towards addressing systemic barriers facing migrants and refugees who experience significant underemployment and de-skilling after arrival in Australia.  

A few reflections: 

For people seeking safety on our shores, the budget continues to prioritise deterrence, detention and border enforcement, while offering little movement toward greater safety, permanency, or welcome.  The budget significantly increases spending on offshore detention, with costs reportedly rising by almost $400 million and approaching $1 billion this financial year.

At a time when more people than ever are being displaced by war, persecution and violence, the budget’s failure to significantly increase Australia’s humanitarian intake is also deeply disappointing. The Refugee and Humanitarian Program remains at 20,000 places, the level set in 2023–24, despite Labor’s election promise to raise this to 27, 000. In a moment when millions are searching for safety and hope, Australia has the capacity to respond with far greater compassion than this budget imagines.

Australia’s Official Development Assistance (essentially our international aid program) also remains unchanged. In a global context where many wealthy nations are reducing aid commitments, maintaining current funding levels is welcome. Yet at a time of escalating conflict, food insecurity and climate-driven displacement, this budget misses an opportunity for Australia to show greater leadership in generosity, justice and global responsibility.

Aboriginal and Torres Strait Islander Justice

Glimmers in the 2026 Budget: 

• The budget includes around $1.2 billion in funding aimed at Closing the Gap priorities, with significant investment directed toward remote employment, health infrastructure, justice reinvestment and community-led responses. This includes $299 million to expand the Remote Jobs and Economic Development Program, creating thousands of additional jobs in remote communities, alongside $144 million for Aboriginal community-controlled health infrastructure and further funding for education initiatives and cost-of-living support in remote areas.
• Nearly $218.3 million connected to the national plan to end violence against First Nations women and children (Our Ways - Strong Ways - Our Voices), including $167.6 million for Aboriginal and Torres Strait Islander community-controlled organisations delivering culturally-led support for women and families experiencing violence. 
• Funding provided to establish the National Commission for Aboriginal and Torres Strait Islander Children and Young People - supporting better outcomes for the safety and wellbeing of First Nations children and young people. 

A few reflections: 

These investments matter. Yet the overall scale and pace of change still do not match the depth of transformation needed to address entrenched inequality in this space. 

For us at Common Grace, and as followers of Jesus,  justice is not only about outcomes, but about right relationships - listening deeply and honouring the dignity and leadership of First Nations peoples. Too often, Aboriginal and Torres Strait Islander community-controlled organisations remain under-resourced despite decades of evidence showing that communities themselves hold the wisdom, leadership and solutions needed for lasting change.

At a time when many Closing the Gap targets continue to stagnate or worsen, Australia is being invited to imagine something more courageous than incremental change - a future shaped by partnership and the leadership of First Nations peoples themselves. 

Domestic and Family Violence 

Glimmers in the 2026 Budget: 

• The government is cracking down on the known misuse of the Child Support Scheme as a form of financial abuse, pledging $182.6 million to protect single parents, combat economic abuse and strengthen women's financial security.
• As mentioned above, $218.3 million over five years will be invested in the National Aboriginal and Torres Strait Islander Plan to End Family, Domestic and Sexual Violence (Our Ways - Strong Ways - Our Voices). 
• $59.4 million to help Community Housing Providers provide social housing for over 4,000 young people aged 16-24 who are at risk of or experiencing homelessness. 
• Funding to extend the Leaving Violence Program Regional Trials to 2027;
• $61.2m over four years in addition funding for 500 Workers initiative for family, domestic and sexual violence services.

A few reflections: 

These measures are welcome, and reflect growing recognition that domestic and family violence is a national crisis requiring long-term investment and structural change. 

Yet there are also significant missed opportunities. Safe and affordable housing remains one of the greatest unmet needs for women and children escaping violence, and many frontline services continue to warn that current social and affordable housing investments fall far short of demand. Tax cuts have also not been matched with meaningful increases to income support. As a result, too many victim-survivors will still be forced to choose between staying in a violent relationship or risking homelessness and/or poverty.  

At a time when many households are under intense financial pressure, the budget also does too little to address the growing risk of financial abuse, which can often escalate during periods of economic stress and insecurity. 

And while much of the budget’s cost of living focus is directed at younger Australians, it fails to adequately respond to the increasing number of older women facing poverty, housing insecurity and homelessness - one of the fastest growing groups at risk in Australia. 

While we welcome the significant housing reforms included in this budget, without much greater investment in social housing, Australia will continue to struggle to provide the safety and stability that women and children need to rebuild their lives.

Creation and Climate Justice 

Glimmers in the 2026 budget:

• $140 million to deliver the government’s roadmap for household energy resources, including support for solar, household batteries and electric vehicles.
• $200 million for active transport infrastructure, including ongoing funding through the Active Transport Fund to support safer, cleaner and more accessible walking and cycling infrastructure.
• Continued investment in renewable energy, electrification and emissions reduction initiatives aimed at supporting Australia’s clean energy transition and long-term energy security.

A few reflections: 

While these investments are positive, the budget also reflects significant missed opportunities in Australia’s approach to climate change and a renewable future. 

One of the clearest examples is the government’s decision not to reform gas export taxation arrangements, despite analysis suggesting a stronger levy on gas exports could generate around $17 billion annually. At a time when Australians are facing rising living costs, growing climate impacts and increasing pressure on essential services, this represents an enormous amount of potential public revenue left untapped.

Those funds could have helped expand social housing, strengthen disaster resilience, accelerate the clean energy transition, reduce household energy bills, or invest in communities already experiencing the impacts of climate-fuelled disasters. Instead, substantial public support for fossil fuel industries continues, even as Australia faces escalating climate and economic risks.

The budget also reveals the growing economic cost of climate-fuelled disasters, with disaster relief expenses increasing by billions of dollars. Yet there remains limited investment in the large-scale adaptation and resilience measures communities will increasingly need as climate impacts intensify.