Same Budget, Same Mistakes: Why Australians Keep Paying

The federal budget on May 12 is being framed as responsible, measured, and necessary; however, I would argue that it’s not only irresponsible, but also predictable. Every time pressure builds in the Australian economy, the same solution gets rolled out. The government squeezes the people who are easiest to tax and right now, that’s everyday Australians trying to build wealth.

The push to change the capital gains tax rules isn’t just a policy tweak, it’s a signal. If you’re buying property, investing in shares, or trying to get ahead outside of your salary, you’re now the target. Not because you’re the problem but because you’re visible, domestic, and easy to reach. Meanwhile, the biggest pools of wealth in this country remain structurally protected.

Why Australia taxes the visible and ignores the valuable

Australia is one of the most resource-rich nations in the world, yet we behave like a middleman in our own economy. We dig it up, ship it out, lock in long-term contracts and then act surprised when domestic prices spike or the domestic tax doesn’t match the scale of what’s leaving the country. That’s not bad luck; that’s a policy choice because here’s the uncomfortable truth: it’s politically easier to tighten rules on “mum and dad” investors than it is to redesign how the country monetises its biggest advantage.

So instead, we get the illusion of action by tweaking capital gains, talk about reducing spending and, maybe, clipping a few programs. It creates the appearance of discipline, without ever touching the core issue which is Australia doesn’t maximise what it already owns and that’s where the strategy is broken. If this budget was about strengthening the economy, the focus wouldn’t be on extracting more from individuals, it would be about expanding the base.

That means working out how to capture resource profits, prioritising domestic supply before exports in critical sectors like gas, incentivising investment rather than discouraging it through tax creep and, most importantly, shifting from a “tax what’s visible” mindset to a “grow what’s valuable” strategy. Sadly, we’re taxing ambition while underutilising our resource advantage and that’s the real risk.

And it feels like ground hog day, because the system is broken. The same people are repeatedly asked to contribute more, while the biggest levers for growth sit untouched. At some point, that stops being economic management and starts looking like avoidance.

What are the best and worst-performing sectors this week?

The best-performing sectors include Energy, up over 2 per cent, followed by Real Estate and Industrials, both up under 0.5 per cent. The worst-performing sectors include Consumer Staples, down over 6 per cent, followed by Materials, down over 3 per cent and Healthcare, down over 2 per cent.

The best-performing stocks in the ASX top 100 include Atlas Arteria Limited, up over 10 per cent, followed by Mineral Resources, up over 7 per cent, and Whitehaven Coal, up over 6 per cent. The worst-performing stocks include Westgold Resources, down over 11 per cent, followed by Ramelius Resources and Woolworths Group, both down over 9 per cent.

What's next for the Australian stock market?

Another week of selling pressure weighed on the market this week, with the All Ordinaries Index closing 1.32 per cent on Thursday. The move was largely driven by ongoing tensions around the Strait of Hormuz, with no clear resolution in sight. That backdrop pushed oil prices higher, which in turn lifted the Energy sector as the standout performer. At the other end of the spectrum, Consumer Staples came under heavy pressure, falling more than 6 per cent as rising input costs and margin compression started to bite.

From a technical perspective, the market is now at a genuine inflection point. This could still be a healthy pullback within the uptrend that began in March, but there are early signs that the market may need more time to reset. Resistance at the 9,200 level comes as no surprise, as once again it has held firm.

What looks increasingly likely in the short term is a period of consolidation. Following the strength seen in recent months, the market may need to absorb gains and work through external uncertainties. That opens the door for a more sideways environment, potentially extending into the second half of the year.

On the downside, 8,600 remains the key level to watch. It’s the logical area where buyers would be expected to step back in if weakness continues. A move toward that level wouldn’t disrupt the broader structure and would still sit comfortably within a constructive trend. From there, another attempt at 9,200 would be the natural progression.

A break below the March lows, however, would change the picture. That would introduce a sequence of lower highs and lower lows, signalling a shift away from upward momentum. A more constructive outcome would be a bounce from higher levels, around 8,800, followed by a renewed push toward and potentially through 9,200. That would confirm buyers are still active and willing to step in earlier, which is typically a sign of underlying strength.

In this kind of environment, discipline becomes critical. Bottom-picking can be expensive when volatility is elevated. A more effective approach is to stay focused on liquidity, stick with relative strength, and watch sector rotation closely. When the index loses direction, that’s often where the real opportunities start to emerge.

Good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores.

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