The 2026–27 Federal Budget lands at a time of global uncertainty, shaped by an oil supply shock, persistent cost-of-living pressures and rising geopolitical risk. Framed around resilience, relief and reform, the Budget combines short‑term support with structural tax and investment changes aimed at lifting productivity over time.

For business, the standout feature is a suite of tax reforms designed to ease cashflow and encourage investment. These include making the instant asset write‑off permanent and reintroducing a two‑year loss carry‑back regime, now also permanent for small and medium firms. Together, these measures give businesses faster access to tax relief – either by immediately deducting capital purchases or reclaiming tax paid in earlier profitable years.

The government has also expanded R&D incentives, increasing refund and offset thresholds to support innovation and scale‑up activity. This aligns with signals that the government is pursuing broader capital and tax reforms, with consultation still underway on key design elements, particularly for start‑ups and early‑stage investment settings.

To achieve the aim of increasing business investment (in R&D, capital, technology and skills) and investment in businesses, we will be looking to engage with consultation on capital gains from equity and shares. We will ensure Queensland business voices are heard.

While many of these changes are broadly welcomed, they come with complexity. Businesses, especially SMEs, will need to actively navigate evolving tax settings to realise the benefits, with relatively limited direct capability support in areas like digital adoption and AI.

Beyond tax, the Budget responds directly to the global oil shock with a significant push on fuel security. It commits billions to secure fuel supply chains and boost domestic reserves, including increasing minimum stockholding obligations and expanding storage capacity. The goal is to add around 10 extra days to fuel reserves and strengthen long‑term resilience against external shocks. This reflects a broader policy pivot towards economic sovereignty – also evident in funding for critical minerals, local manufacturing and defence capability. Defence spending alone is set to rise substantially over the decade, and we will be looking for Queensland’s share of aerospace, autonomous systems, and hypersonics, given our concentration of expertise in these priority areas for defence investment.

On the household side, cost‑of‑living support continues through targeted tax relief. The Budget introduces a modest $1,000 instant tax deduction and $250 offset, while previously legislated tax cuts continue to roll out. These measures aim to cushion households as inflation is forecast to return to the Reserve Bank’s target range over the next two years. Set against the ongoing production shock from the Persian Gulf, and economic consequences through supply chains, this remains to be seen.

Not all changes are expansionary, and overall savings and spending restraint are forecast in uncertain circumstances to aim the cash balance at remain around one per cent of GDP. The Budget also includes tax increases on assets, including changes to capital gains tax treatment and stricter rules for discretionary trusts. These may affect investment decisions and business structures, reinforcing the importance of forthcoming consultation.

Overall, the 2026-27 Budget signals a clear direction: use tax reform and targeted incentives to signal for private investment, while strengthening resilience in an increasingly uncertain global environment. For Queensland and the broader business community, the Chamber will be there to support in navigating a more complex policy landscape.

Overview

Tax

• Making the $20,000 instant asset write-off permanent for small business
• Permanently reintroducing loss carry back
• Loss refundability for start-ups, expanding incentives for venture capital and better targeting the Research and Development Tax Incentive
• Increasing the R&D maximum expenditure cap to $200 million and increasing the minimum expenditure threshold to $50,000.
• A new $250 Working Australians Tax Offset and a $1,000 instant tax deduction, on top of three legislated rounds of tax cuts
• $2.9 billion to more than halve the fuel excise and reduce the heavy vehicle road user charge to zero for three months

Programs

• Better coordinating our more than $39 billion investment in R&D over the next four years through the new National Resilience and Science Counci
• Up to $15 billion of total investment in autonomous and uncrewed systems in the decade to 2035–36
• $7.5 billion Fuel and Fertiliser Security Facility supporting additional supply and storage
• $3.2 billion to establish the Australian Fuel Security Reserve and bring our total stocks of diesel and jet fuel to 50 days
• $2 billion to build critical ‘last mile’ infrastructure needed for new housing developments
• More than $500 million to accelerate and streamline environmental approvals

Queensland

• $6.3 billion in disaster recovery cash payments following successive floods and extended monsoon season
• $13.5 billion for road, including $812.5 million for the Bruce Highway – Gateway Motorway to Dohles Rocks Road (Stage 2), plus additional funding for:
  • Bruce Highway – Tiaro Bypass
  • Cairns Western Arterial Road Duplication
  • Bowen Basin Service Link – Walkerston Bypass
  • Bruce Highway – Caboolture-Bribie Island Road to Steve Irwin Way
  • Boundary Road Level Crossing, Coopers Plains
• $4.7 billion for rail
• $2.7 billion for Brisbane 2032
• $1 billion in the transition of Boyne Island Aluminium Smelter to renewable energy
• $255 million towards CQU campus in Cairns
• $251 million still in SEQ City Deal
• $80 million for Queensland Academy for Health Sciences in Rockhampton
• $15 million for the Cowboys High Performance training centre and Cowboys NRL Women’s headquarters
• $3.5 million for Holocaust Education Centre