The Federal Budget for FY27e is positioned as reform and addressing inter-generational equity for taxpayers. However, the implications over the next 1-2 years on consumers and the retail sector is mild. We estimate less than 0.2% boost to household income over FY27e to FY29e, which pales into insignificance compared with the 1.8% boost to households from government spending in FY25. The changes to tax deductions on investment properties will take many years to shift housing churn and house prices given existing investors are grandfathered. The path of retail sales for the next three years will be more dependent on the interest rate outlook and employment growth. We expect a slowdown in retail sales to be most evident in the July-December 2026 period as income growth slows.