Making Sense of RBA Actions in 2026 With Wayne Blazejczyk

If you're a borrower, 2026 has not been your year.

The Reserve Bank of Australia, our central bank, is responsible for controlling inflation, with the aim of keeping inflation to 2-3% each year. This number is low enough that inflation does not significantly influence society's economic decisions. Inflation that is too low (deflation) can lead to businesses reducing wages or laying off workers, whereas inflation that is too high results in the value of the dollar reducing so people can't afford as many goods and services. The way the RBA controls inflation is through control of the cash rate.

At the beginning of 2026, inflation was already picking up as Australians were spending strongly and borrowing more. Since January, the RBA has hiked cash interest rates not once or twice, but four times, and has warned they may increase again if they deem necessary.

February: the first

On 3 February the RBA raised rates for the first time since 2023, taking the cash rate to 3.85%. Demand was outpacing what the economy could supply, and prices were rising as a result.

March: the second

The second hike came on 17 March, lifting the rate to 4.10%. By then, the issue was not just rising inflation. Conflict in the Middle East was pushing up oil prices, and in the RBA's minutes, they stated that if oil held near US$100 a barrel, headline inflation could climb to around 5% in the June quarter.

May: the third

Inflation rose to 4.6% in March, well above the target 2-3%. As a result, the RBA issued a third hike up to 4.35%. This time eight board members voted to hike and only one wanted to hold. Each increase was winning more support than the last, a sign the board's concern about inflation was deepening.

June and August: pause

The RBA then held in June and again in August. In August the Board said the economy appeared to be slowing as expected, however it also noted that higher fuel prices were being passed through to other goods and services, so inflation was likely to stay high for some time.

September: the fourth

In a unanimous decision, the Board voted to raise the cash rate for the fourth time to 4.6%. The RBA's statement said inflation was still too high and that further tightening in financial conditions was warranted to bring it back to target in a reasonable period.

With three months left in the year, we hope inflation will reduce back to a manageable level to avoid any further pressure on borrowers, as interest rates are currently sitting at a 15 year high. However, it is unfortunately a possibility that rates could increase again, with ANZ Bank predicting another rate rise when the RBA meets again in November.

This post is general information, not financial advice. If your repayments are becoming difficult, talk to your lender early, consider shopping around lenders or consulting with a mortgage broker.

Australians Feeling Financial Pressure - Wayne Blazejczyk Discusses How Your Financial Situation Is Impacting Your Happiness

With the start of the financial year has come many changes to the Australian Federal Budget, with some of those changes aimed at attempting to help ease the financial strain on hardworking Australians. However, it may take more than a few budget changes, as a recent report by the Australian Bureau of Statistics shows that Australians felt a greater sense of satisfaction during the pandemic than in 2026.

According to the World Happiness Report 2025; Australia has dropped further down the list, sitting at number 15. Although there are other factors at play such as social media usage; financial insecurity and concerns about future opportunities are definitely linked to declining wellbeing, particularly amongst the younger generations. Nations such as Finland (#1) and Denmark (#3) consistently score well because of strong social safety nets, lower income inequality, high levels of trust between citizens and government, and cultures that emphasise work-life balance and community connection.

In terms of Australians falling sense of life satisfaction, psychologist Sue Read explains: "I think one of the challenges is that during COVID, people felt like there was a sense of togetherness and that there was going to be an endpoint. When we look at these ongoing financial pressures (today), it feels like a chronic stressor." The past five years since COVID-19 have held uncertainty and unpredictability as people recovered from what we thought would be the worst of it. But social and economic conditions are deeply linked and as government support stepped back; the economy wore the effects.

Unfortunately, Australia's economy is showing signs of a prolonged slowdown, with economists warning that the full impact of higher interest rates and cost-of-living pressures is still unfolding. While GDP grew by 0.3% in the March quarter of 2026, household spending remained weak, business investment slowed and consumer confidence continued to decline. Economists expect per capita household spending to remain largely flat throughout 2026, while unemployment is forecast to rise to around 5% by 2027 as businesses scale back hiring. Although Australia has avoided a technical recession, many households are experiencing falling living standards due to persistent inflation, high mortgage repayments and weaker disposable incomes. Experts argue that structural issues—including low productivity growth and housing affordability—are likely to weigh on the economy for some time, meaning the slowdown could become more pronounced before conditions begin to improve.

Written by Wayne Blazejczyk

Wayne Blazejczyk Decodes the 2026 Australian Federal Budget Changes in Tax for Businesses and Individuals

The 2026 Australian Federal Budget, presented by Treasurer Jim Chalmers, brings significant updates that affect business owners and individual taxpayers. While the government says the changes are designed to improve housing affordability and repair the budget long term, the reforms have sparked debate among investors, business owners and everyday Australians. Wayne Blazejczyk explains in the overview below and breaks down the key tax reforms to help Australian investors and taxpayers understand what lies ahead.

Australian Parliament House

Key Tax Changes for Business Owners

• Discretionary Trusts Tax Changes

From 1 July 2028, discretionary trusts will be required to pay 30% tax before splitting to individual members.

• Instant Asset Write-Off Extension

Small businesses (annual turnover of less than $10mil) have had a temporary write off measure made permanent. The $20,000 instant asset write-off threshold aims to simplify tax obligations, improve cash flow and save small businesses around $32 million per year in compliance costs.

• Loss Refundability for Start-Ups

Small start-up companies (annual turnover of less than $10mil) with tax losses within their first two years of operation can receive a refundable tax offset, aiming to increase their access to cashflow in the early years of the business instead of waiting to use it once they have profit.

Individual Tax Changes and Negative Gearing Adjustments

• $250 Working Australian Tax Offset

The WATO will apply to over 13 million Australian workers, automatically providing them with a $250 tax offset from 2027-28.

• $1000 Standard Deduction for Work-related expenses

  The Government is introducing a standard tax deduction of up to $1000 for work-related expenses, without the need to itemise or substantiate such expenses.

• Tax Cuts to Low Income Earners

  Previously announced, but for low income earners ($18,201-$45,000) their 16% will be discounted to 15% from July 2026 and then to 14% from July 2027.

• Changes to Negative Gearing

The budget tightens rules on negative gearing, limiting deductions against salary or other income to only new builds to encourage investors to shift focus to new supply. Otherwise, losses will only be deductible against rental income or capital gains income from residential properties. This change aims to cool the housing market and reduce speculative investment by Australian investors.

• Impact on Australian Capital Gains Tax

The 50% capital gains tax discount after 1 year will be removed from 1 July 2027 and instead there will be no discount but a 30% minimum tax on net capital gains, with the gains adjusted for inflation.

What This Means for Australian Investors and Taxpayers

Overall, the 2026 Federal Budget attempts to balance cost-of-living relief with long-term tax reform. While supporters argue the changes improve fairness and housing affordability, critics believe the reforms may discourage investment and place additional pressure on business owners and investors.

Taxpayers and investors should review their financial strategies in light of these changes. Consulting with financial advisors can help navigate the new rules and optimize tax outcomes.

Written by Wayne Blazejczyk.