The 2026-27 Federal Budget is framed around the themes of ‘Resilience and Reform’.
The Budget has been delivered against a backdrop of escalating conflict in the Middle East, ongoing disruption to global oil supplies, heightened market volatility and growing geopolitical uncertainty. At the same time, Australia continues to navigate a complex economic transition driven by decarbonisation, rapid technological change and shifting global supply chains.
In this environment, the Government has adopted a measured and fiscally restrained approach, seeking to balance targeted cost-of-living relief with mounting pressure on the Commonwealth’s fiscal position. More broadly, the Budget attempts to respond to immediate economic pressures while positioning the economy for longer-term structural change.
Economic growth is forecast to slow from 2.25 per cent in 2025-26 to 1.75 per cent in 2026–27, before recovering to 2.25 per cent in 2027-28. Headline inflation is forecast to rise to 5 per cent through the year to the June quarter 2026, before declining to 2.5 per cent through the year to the June quarter 2027 as global oil prices stabilise. The unemployment rate is expected to remain relatively low by historical standards, rising slightly to 4.5 per cent in 2026-27.
The Budget includes several measures relevant to automotive dealers and the broader automotive sector. These include additional funding to strengthen ACCC enforcement capacity and support implementation of unfair trading practice reforms, as well as an expansion and extension of the Dealership and Repairer Initiative for Vehicle Electrification Nationally (DRIVEN) program.
The Government last week announced changes to the electric vehicle Fringe Benefits Tax concession arrangements, transitioning from the current full exemption model to a permanent 25 per cent discount model from 1 April 2029.
Other notable measures include reforms to capital gains tax, negative gearing, discretionary trust taxation, and the introduction of a new loss carry back provision for eligible businesses.
We have prepared the attached 2026-27 Federal Budget Briefing paper for members, which provides a summary and explanation of the key measures relevant to dealers and the broader automotive industry.
Further details are also available on the Government’s Budget website.