The Albanese government describes its 2025-26 Federal Budget as being “responsible”, helping with the cost of living while ‘building Australia’s future’.
“We’re providing more hip pocket help for households,” says Australian Prime Minister Anthony Albanese.
“The centrepiece of the Budget is more tax cuts for every taxpayer, which will benefit 14 million Australians. Helping Australians earn more and keep more of what they earn is a central part of our economic plan.
“The new tax cuts will top up the relief that started flowing for workers last year. They will help with the cost of living while delivering broader economic benefits – like returning bracket creep and boosting labour supply.
“But there are several other significant initiatives as well that will make a meaningful difference for Australians. We’re delivering energy bill relief to every household, even cheaper medicines, historic investments in Medicare, higher wages and a fairer go for consumers.
“The families of middle Australia are the biggest beneficiaries of this cost-of-living help. The combined benefit for an average household will be more than $15,000 from our two rounds of tax cuts and energy bill relief over the four years to 2027-28.”
Retail responds
The Australian Retailers Association (ARA) and National Retail Association (NRA) say the government’s “modest” cost of living measures in the Federal Budget, including delayed tax cuts, energy, health care, student debt relief and pensioner measures, may have a flow-on effect to consumer confidence.
However, the sector cautioned that the slow-down in spending coupled with rising business costs leaves retail businesses “extremely vulnerable”. The ARA and NRA said an absence of support for business and productivity growth is a “significant missed opportunity” in this Budget.
According to the ARA and NRA, the measures of most interest to retailers in the Federal Budget are:
- Tax cuts. Minor tax relief reducing the first tax threshold from 1 July 2026 – providing $268 a year to the average worker from 2026 rising to $536 mid-2027.
- General cost-of-living support. Increased funding for PBS scripts, more bulk billed GP visits, cutting student debt.
- Childcare relief. Guaranteed three days of subsidized childcare each week, with $1 billion going towards expanding quality and access.
- Energy bill relief. Extension of energy bill relief to the end of 2025 for households and small businesses, totalling $150.
- SMB digital capability. Continuation of digital/cybersecurity funding of $60 million.
- Payments. Addressing unfair excessive card surcharges, preparing to ban debit card surcharges to deliver lower cost payments.
- Supply chain resilience. $17.1 billion over 10 years to improve freight efficiency through road and rail projects – this includes the Bruce Highway in Queensland and western Sydney region.
ARA Chief Industry Affairs Officer Fleur Brown says the Budget focus on hip pocket relief across a range of programs may help bolster confidence, but it’s unlikely to deliver the support struggling retailers have been crying out for.
“It’s been five years of economic uncertainty for Australian retailers who are still weathering the consumer spending slowdown coupled with ongoing and rising costs of doing business,” she says.
“More focused support is needed to ensure vulnerable businesses and small businesses in particular can survive and grow.
“Small business owners have been in the trenches, fighting to survive. It’s disappointing there seems to be more funding in this budget to enhance red tape and regulation compliance than to educate or relieve businesses of that administrative burden. We are disappointed to have uncertainty around the instant asset write-off, which is not accounted for in the budget.”
Food and grocery manufacturers respond
The Australian Food and Grocery Council (AFGC) welcomes the government’s commitment to easing financial pressure on households.
“However, lasting relief for Australians depends on a strong, viable domestic manufacturing sector that can keep shelves reliably stocked with affordable products,” says the organisation.
“A cost-of-doing-business agenda would bring in coordinated actions that reduce the financial and regulatory strain on essential industries, boosting efficiency, resilience and competitiveness.”
For food and grocery manufacturing “practical and targeted” action would include:
- Government tax incentives to modernise processes in the industry through automation and digitisation.
- Investing in more resilient transport infrastructure to protect against natural disaster disruptions.
- Ensuring access to stable, affordable energy for manufacturers.
- Addressing workforce shortages, particularly in regional and rural areas.
Small business responds
The Australian Small Business and Family Enterprise Ombudsman Bruce Billson says the Federal Budget was “the sequel” to last year’s, offering “modest targeted measures” to help small and family business deal with specific current pain points and headwinds.
The Ombudsman says that struggling small businesses will have to look to and hope for election commitments that present a decisive positive action plan to ‘put some wind in their sails’, lift their prospects for success and to turn around a post-Covid period of tough trading conditions.
“Small and family businesses facing punishing input costs that are squeezing margins will welcome the continuation of modest energy bill relief,” says Mr Billson.
“Cost-of living increases are also cost-of-doing-business increases, and we need to make sure small businesses can keep their heads above water and can continue to support their employees and their communities. Every saving helps the small businesses who are doing it tough and struggling to keep the lights on, as they hang on hoping to feel the benefits of forecast economic improvement.
“The Budget’s reiteration of earlier announced measures to introduce unfair trading protections for small business, expanding unfair contract terms protections and more resources to the ACCC to enforce industry codes, including for franchising, to support fairer conduct between parties with profound power imbalances, are welcome and important steps.
“The additional mentoring and coaching support for First Nations entrepreneurship and participation in government procurement are also helpful, along with continuing skills support, efforts to improve trades mobility and additional resources for ASIC to crack down on illegal phoenixing.”
Particular Budget measures of interest to small and family business are:
- The government will provide $722.8 million over four years from 2025-26 to deliver increased support for apprentices.
- $7.1 million over two years from 2025-26 for the ACCC to strengthen regulatory oversight of the Franchising Code of Conduct.
- $0.8 million in 2025-26 for Treasury to develop and consult on options to extend protections against unfair trading practices to small businesses and protect businesses regulated by the Franchising Code of Conduct from unfair contract terms and unfair trading practices.
- $23.9 million over five years from 2024-25 to strengthen the Indigenous Procurement Policy to boost opportunities for First Nations businesses to grow and create jobs.
- $3.4 million over three years from 2025-26 to increase the participation rate of First Nations women in business through a place-based business mentoring and coaching program, codesigned and delivered by First Nations businesses and organisations.
- $2.9 million over three years from 2025-26 to assist fresh produce suppliers to understand and enforce their rights under the Food and Grocery Code to achieve more favourable commercial outcomes when negotiating with large grocery businesses.
“These are useful steps in the right direction, but there’s still a lot to do,” says Mr Billson.
“We need to get small businesses beyond surviving and into thriving. This means they need to have the confidence that they have a level playing field, dependable incentives and supportive conditions to grow and invest.
“Small business is the engine room of the economy. We must ensure that small and family business can fire on all cylinders. We welcome Budget announcements that help put the small and family business economy back on the right trajectory.”