Financial Advisers Warn Labor Budget Changes Could Leave Retirees Worse Off
By Michael Keating | Inside Canberra
Financial advisers have warned that a range of Federal Budget measures could significantly increase costs for retirees, reduce access to professional financial advice and reshape investment decisions across Australia.
The concerns were raised during a roundtable convened by Federal Member for Fisher, Andrew Wallace, bringing together financial planning professionals to discuss the impact of Labor’s 2026 Budget on retirees, investors and the broader financial advice sector.
According to Mr Wallace, advisers reported growing anxiety among older Australians, particularly around changes affecting private health insurance rebates and proposed reforms to capital gains tax arrangements.
Private Health Insurance Concerns
Participants at the roundtable said many retirees were already struggling with the rising cost of private health insurance before the Budget measures were announced.
Mr Wallace claimed advisers reported that between 75 and 80 per cent of their clients aged 65 and over had raised concerns about affordability, with some retirees now considering dropping private cover altogether. He argued the changes could add around $1,600 annually to the cost of maintaining gold-tier health insurance policies for some older couples.
The Coalition has been campaigning heavily against the changes, describing them as a “health tax on seniors” and warning they could increase pressure on the public hospital system.
Capital Gains Tax Reforms Under Scrutiny
The roundtable also focused on the Government’s proposed capital gains tax reforms, which have generated significant debate since the Budget was handed down.
Industry participants argued that changes to cost-base indexation and capital loss treatment could alter investment behaviour and complicate retirement planning. Advisers attending the meeting warned the measures could encourage investors to adopt more complex structures to manage tax outcomes rather than simplifying the system.
The broader political debate has intensified in recent weeks, with Opposition Leader Angus Taylor also criticising the Government’s approach to capital gains tax reform and calling for a rethink of the measures.
Financial Advice Industry Under Pressure
Financial advisers at the roundtable also highlighted ongoing challenges facing the profession itself.
According to Mr Wallace, the number of practising financial advisers has fallen substantially over the past decade, while compliance obligations, professional indemnity insurance costs, licensing requirements and regulatory levies have continued to increase. Advisers warned that these pressures are making professional financial advice increasingly unaffordable for middle-income Australians.
Participants also raised concerns about the operation of the Compensation Scheme of Last Resort, arguing that compliant advisers are being required to fund costs associated with failures elsewhere in the sector.
Growing Political Battle Over Budget Measures
The roundtable forms part of a broader campaign by Mr Wallace against several Budget measures, particularly those affecting retirees and investors. He said feedback gathered from local financial advisers would be taken to Canberra and used in parliamentary and party-room discussions.
The Government has defended its broader Budget agenda as part of its plan to improve fairness and sustainability within Australia’s tax system, while critics argue the changes risk increasing complexity and reducing incentives for investment. Debate over the reforms is expected to continue as legislation progresses through Parliament.