What’s Happening?
The Federal Government handed down its fifth budget on 12 May, with tax cuts for workers and major reforms for property investors.
The 2026/27 Federal Budget includes changes to negative gearing and capital gains tax. It also commits more spending to defence, health, aged care, tourism, housing, fuel security and low carbon fuels.
Several measures align with long-standing Townsville Enterprise advocacy priorities for North Queensland. These include housing infrastructure funding, domestic gas reservation, fuel security, defence spending and cleaner fuel support.
However, Townsville Enterprise CEO Claudia Brumme said the budget was a missed opportunity for the region.
“The budget focused mainly on Tax cuts. This is disappointing for North Queensland who has the industries and products the world demands. We all know, we can’t tax ourselves to prosperity, we need governments to make bold investment decisions right now to protect and grow Australian jobs especially when the world is in an economic crisis,” she said.
Why It Matters?
North Queensland is home to major industries that support jobs, exports, defence, tourism and the energy transition.
Townsville Enterprise said some budget measures were welcome, but stronger regional infrastructure investment was still needed.
“While we saw some of our Townsville Enterprise advocacy priorities delivered such as $2bn housing-enabling infrastructure, a 20% domestic gas policy and fuel security measurements, further Defence investments and the hint towards low carbon fuel demand reforms, this budget is a missed opportunity for enabling and productive infrastructure investment for Northern Australia, Queensland particularly North Queensland.
“With so many changes announced, we will consult our members and won’t hold back in taking their concerns on this budget all the way to Canberra.
“We’ll always keep fighting for North Queensland.”
The budget also includes tax changes that may affect property investors, trusts and housing markets across Australia.
Negative gearing will be limited to new housing. It will not apply to established residential properties purchased before 12 May 2026.
The capital gains tax discount will be abolished and replaced with an inflation-indexation model. A minimum 30 per cent tax on capital gains will apply from 1 July 2027.
Investors can still deduct losses from rental income. Carryover rules will allow excess losses to be deducted from future profits.
By The Numbers
- The budget includes $2 billion for housing-enabling infrastructure, supporting around 65,000 new homes over ten years.
- Defence spending is set to rise by $53 billion over the next decade, including $14 billion over four years.
- The government will invest $3 billion to expand aged care capacity, including 5000 new residential beds each year.
Local Impact
For North Queensland, the clearest local wins are tied to housing, gas, defence, fuel security and tourism.
The $2 billion housing infrastructure fund will support water, sewerage and other services needed for new developments. This builds on about $4 billion already committed to housing infrastructure.
The funding comes as the government remains under pressure to meet its target of 1.2 million new homes by 2029.
The 20 per cent domestic gas reservation policy is aimed at protecting local industry and jobs. Townsville Enterprise has linked this measure to North Queensland’s industrial base and future economic growth.
The $10 billion fuel security plan will expand national stockpiles to 50 days. It will also increase storage capacity and assess domestic refining options.
A short-term fuel measure will also spend $2.55 billion to reduce fuel excise and the heavy road user charge for three months. The move responds to global energy market disruptions.
Tourism will receive $110.2 million over five years to support Australia’s tourism, trade and investment opportunities.
Zoom In
The budget includes a $1.1 billion Cleaner Fuels Program. It is supported by a green bunkering strategy and reforms to create demand for low carbon liquid fuels.
These measures matter for North Queensland because the region is positioned around ports, industry, fuel supply and export opportunities.
The budget also includes $500 million to speed up approvals for housing, energy and critical minerals projects. This continues reforms to national environmental laws introduced last year.
Workforce reforms are also included. The government wants to streamline recognition of overseas qualifications and migrant workers’ skills.
The reforms are expected to contribute about $13 billion a year to economic output.
Zoom Out
The budget spreads spending across national priorities, including defence, housing, aged care, fuel security, tourism and productivity.
Defence investment follows the release of a new national defence strategy. It includes spending on drone capability and projects linked to the AUKUS nuclear submarine program.
A further $74 million over two years will establish a national centre focused on counterterrorism and emerging online threats.
Health and aged care also receive major funding. The budget includes more than $200 million for dementia services, specialist care units and support to ease pressure on mainstream facilities.
To help fund aged care, higher private health insurance rebates for people over 65 will be reduced.
NDIS reforms are also planned. The scheme is projected to exceed $70 billion in annual costs by the end of the decade.
The government wants to reduce annual growth from above 10 per cent to about 2 per cent. About 160,000 participants are expected to transition out of the scheme.
Some aged care reforms have also been scaled back. Medicare levy changes will mean Australians aged over 65 contribute about $240 more each year on average.
What To Look For Next?
Townsville Enterprise will now consult its members on the budget changes and their impact across North Queensland.
The next phase will likely centre on how Canberra responds to regional concerns around infrastructure, industry and job protection.
The region has secured some policy wins, but the broader push for productive infrastructure investment is far from finished.
