Westpac Sees 2026/27 Budget Boost for Australia 200 via Narrower 1% GDP Deficit

Westpac's May 15 note positions Australia's 2026/27 Federal Budget—bolstered by commodity windfalls and a ~1.0% GDP deficit—as supportive for Australia 200, with tax reforms unlikely to shift RBA policy amid global energy-led inflation. The developing story began May 11 with Jefferies warning of bank headwinds from Labor's negative gearing and CGT curbs starting July 2027, as investor loans comprise 20% of total lending and 40% of mortgage flow, potentially halving housing credit growth in extremes. Victoria's 2023 tax evidence showed resilient investor loans (up 10% then 20%) and minimal 3% rental stock drop; May 13 analysis projects 75,000 more first-home buyers and 2% lower prices.