Last night the Federal Government released its 2026/27 Federal Budget – its first since last year’s election.

For Australian vegetable growers looking for relief from the ongoing significant impacts of the Middle East conflict, as well as action on the medium and longer-term systemic issues that have continued challenging viability, there were few specific highlights.

Photo Credit: Shutterstock.

As was the case last year, the cost-of-living crisis remained a major theme of budget 2026/27, albeit with the recent major impacts of the Middle East war providing a markedly more economically uncertain backdrop.

The Government took the opportunity to announce a range of reforms, largely around taxation arrangements for capital gains, negative gearing and trusts, as foreshadowed in the leadup to the budget.

Amid continuing widespread uncertainty across the vegetable industry and wider economy over future availability of critical inputs like fuel and fertiliser, the Government also confirmed some further details of its Australian Fuel Security and Resilience package, announced last week.

With migration remaining a significant political issue, the budget also outlined plans for adjustments to the permanent migration points test, and confirmed migrants already in the country will be priority for permanent migration.

In a concerning move, the budget also outlines the Government will reform the Working Holiday Maker (WHM) program. According to the budget papers, the measure is ‘to better control numbers, reduce barriers to work, provide a fairer allocation of WHM visas, and support Australia’s national interests’, and will also include expanding the use of ballots.

Given government adjustments to the PALM Scheme over recent years have rendered it increasingly unworkable for many growers, any move that reduces participants in the WHM program, which Australian growers are heavily reliant on to meet workforce needs, rings alarm bells. AUSVEG will closely monitor this development, and respond as required.

Ahead of this year’s budget AUSVEG provided a comprehensive pre-budget submission and suite of recommendations to the Government to address the key issues facing vegetable growers, under the four key pillars of Stimulating Demand and Ensuring Food Security; Tax Reform and Structural Support; Workforce; and Sustainability.

The submission identified a range of priority measures, including federal support for a coordinated consumer behaviour change campaign to increase vegetable consumption, initiatives to boost sovereign manufacturing capability of critical farming inputs, an innovation grants program to encourage grower investment in productivity-enhancing innovation, enhanced instant asset write off provisions, support for implementation of the recommendations of AUSVEG’s Horticulture Compliance and Regulation: Reducing the Burden by 2030 report, and initiatives to improve energy affordability and reliability, among others.

As the severe impacts of the Middle East conflict have continued to hit Australia’s vegetable growers hard, AUSVEG has continued to advocate on the necessary short, medium and longer-term government commitments and policies to protect vegetable grower viability and long-term food security.

These measures remain essential to restoring confidence at farm level, and reversing worrying declines in grower profitability, productivity, as well as vegetable consumption among Australians.

While some elements of last night’s budget may provide some benefit to some Australian vegetable growers, these are still short of the specific and systemic reforms necessary to restore much needed certainty to an industry that is critical to Australia’s food security, with concerns also raised around the Government’s flagged migration changes.

A summary of some relevant measures contained in the 2026/27 budget are included below.

FUEL, FERTILISER AND ENERGY

Australian Fuel Security and Resilience Package

As announced last week, a more than $10 billion commitment to an Australian Fuel Security and Resilience Package was included in last night’s budget. The package, aimed at boosting Australia’s near-term fuel and fertiliser security and improving energy sovereignty includes provisions to establish a permanent Government-owned Australian Fuel Security Reserve, lift the Minimum Stockholding Obligation by around 10 days for every type of fuel, and the establishment of a Fuel and Fertiliser Security Facility.

While investment aimed at bolstering Australia’s fuel and fertiliser security and sovereignty is welcome, further details and commitments about how Australian vegetable growers will be prioritised for access to critical inputs were lacking. Assurances from the Government that Australia’s vegetable industry is an essential sector of national importance (through the Liquid Fuel Emergency Act 1984.) to enable priority access to inputs like diesel and other critical inputs such as energy and fertiliser remains an urgent industry priority.

Gas

The budget confirmed the Government’s plans to proceed with an east coast gas reservation scheme. Under the scheme, gas exporters will be required to supply a proportion of their total production to the Australian market, equivalent to 20 percent of gas exports.

TAXATION

Instant Asset Write-Off

From 1 July 2026, the Government will permanently extend the $20,000 instant asset write‑off for businesses with turnover up to $10 million. AUSVEG has continued to advocate for the write-off amount to be increased to $50,000, and for eligibility to be expanded to businesses with a turnover of up to $50 million, to encourage more growers to invest in productivity-enhancing farm assets.

Negative Gearing, Capital Gains Tax and Trusts

In line with widespread media reporting leading into the budget, it was confirmed from 1 July 2027, the 50 per cent CGT discount will be replaced by cost base indexation for assets held for more than 12 months, with a 30 percent minimum tax on net capital gains. The Government will also limit negative gearing for residential property to new builds.

In announcing the introduction of a 30 percent minimum tax on discretionary trusts, the Government confirmed primary production income will be exempt.

Loss refundability for business

The budget confirmed that for tax years commencing on or after 1 July 2026, companies with annual global turnover of less than $1 billion will be able to carry back a tax loss and offset it against tax paid up to two years earlier. Loss carry back will apply to revenue losses only and will be limited by a company’s franking account.

HOME AFFAIRS

Migration

The budget outlines the Government will reform the Working Holiday Maker (WHM) program, with a reduction in numbers, and expanded use of ballots flagged.

The budget sets the 2026–27 permanent Migration Program planning level at 185,000 places, with 132,240 places (over 70 per cent) allocated to the Skill stream. Across both the Skill and Family streams of the permanent Migration Program, the Government will prioritise applications from onshore migrants, allocating 129,590 places to migrants already living in Australia, with an additional 300 places allocated to Special Eligibility. The remaining 55,110 offshore places will predominately be allocated to high‑skilled migrants. The Government will reform the permanent migration points test to better identify

migrants who drive productivity.

The Government has allocated $85.2 million over four years from 2026–27 for better recognition of migrant skills and faster, more flexible skills assessments including:

• $75.1 million over four years for a new for a modern skills assessment system for Trades Recognition Australia (TRA) to facilitate the integration of occupational licensing.
• $5.6 million over three years to deliver a new program of skills assessments for onshore visa holders. Costs will be fully recovered over the medium term through new cost recovery arrangements.
• $4.5 million over four years from 2026–27 to strengthen the regulatory oversight of Assessing Authorities.

The Department of Employment and Workplace Relations will also consult on requirements for a skills migration commissioner.

Australian Trusted Trader Program Expansion

The Government will provide $7.6 million over four years (and $0.2 million per year ongoing) to expand the Australian Trusted Trader Program.  The Approved Exporter Scheme will be available to accredited Australian Trusted Trader exporters as an opt‑in scheme, removing the need to obtain Certificates of Origin to take advantage of tariff reductions under the ASEAN‑Australia‑New Zealand Free Trade Area and the Regional Comprehensive Economic Partnership Agreement.

AGRICULTURE, FISHERIES AND FORESTRY

The budget outlined cuts of $191.6 million over five years from 2025–26 (and $30.5 million per year ongoing) across the Agriculture, Fisheries and Forestry portfolio including:

• $104.6 million over five years by reducing uncommitted funding from grant programs.
• $52.0 million over four years from (and $13.0 million per year ongoing) by reducing uncommitted funding for the Future Drought Fund.
• $35.0 million over two years from 2028–29 (and $17.5 million per year ongoing) by reducing funding for the agriculture stream of the Natural Heritage Trust.

Agricultural Trade

The budget committed $77.1 million over four years (and $17.5 million per year ongoing) to sustain agricultural export and trade functions, including:

• $45.1 million over four years (and $11.4 million per year ongoing) to continue Australia’s international engagement in agricultural forums and trade standard setting functions.
• $23.8 million over four years (and $6.1 million per year ongoing) to continue to support access to critical global agricultural markets.
• $8.2 million in 2026–27 to maintain export regulatory services, with revised cost recovery arrangements for these services deferred to 1 July 2027 in recognition of the disruptions being experienced by farmers and producers due to the conflict in the Middle East.

AGENCY FUNDING

The budget committed $8.7 million in supplementary funding in 2026–27 to support the Australian Pesticides and Veterinary Medicines Authority to continue to undertake its regulatory functions, $387.4 million over four years for the CSIRO, and funding for the Australian Centre for Disease Preparedness.

FOREIGN AFFAIRS AND TRADE

The Government has committed $110.2 million over five years (and $7.5 million per year ongoing) to boosting Australia’s tourism, trade and investment opportunities, including:

• $39.6 million over three years from to boost Austrade support to Australian businesses.
• $38.6 million over four years (and $7.1 million per year ongoing) to implement the Australia‑European Union Free Trade Agreement.
• $9.2 million over two years to enhance the Go Global Toolkit online platform which provides information and support to exporters.
• $5.0 million in 2026–27 to expand the Accessing New Markets Initiative to support Australian businesses to diversify their export markets.
• $3.9 million over four years (and $0.4 million per year ongoing) to support stakeholder engagement on trade negotiations and to pursue trade diversification and economic opportunities in Southeast Asia.
• $1.1 million over two years for Austrade to deliver the new Trade Resilience Service dedicated to help Australian exporters impacted by changing global trade conditions.

Find out more

The full budget papers can be accessed here.