The 2026/27 federal budget has been announced, dropping bombshells left and right. Treasurer Jim Chalmers has taken the axe to capital gains discounts, negative gearing and discretionary trusts – but what does this mean for agriculture in Australia?

Australia’s peak farming body, the National Farmers Federation, welcomed some key measures, saying they will ease pressure on farmers and strengthen the nation’s food and fibre supply chains. However, concerns have been raised about cuts to regional infrastructure, connectivity and the Department of Agriculture, Fisheries and Forestry.

Primary Production Carved Out From Changes

Farmers will be exempt from most of the budget's trust changes, including the new 30% tax rate on discretionary trust distributions from 2028-29. 

The NFF welcomed changes ensuring primary production income will be exempt from the new 30% trust tax, with NFF President Hamish McIntyre noting that there are around 40,000 trusts used in agriculture.

"...these are significant wins for family farm businesses and reflect the case we have consistently put to the Treasurer about how these changes would impact succession," he said.

“Family farms are generational businesses built over decades and often represent a family’s life savings and retirement plan. We are pleased the Government has listened.”

In addition to leaving primary production exempt from the new trust tax, the budget confirmed that there will be no changes to small business capital gains tax concessions.

It was also confirmed that the $20,000 instant asset write-off would be made permanent, a move that provides certainty for farm businesses looking to invest in equipment and technology.

Fuel Resilience Funded

Budget night also brought the announcement of a $14.8 billion fuel resilience package, expected to benefit primary production.

The Strengthening Australia’s Fuel Resilience package is expected to boost fuel security, strengthen supply chains, and relieve pressure on fuel users.'

The package includes:

• $7.5 billion Fuel and Fertiliser Security Facility for near-term fuel and fertiliser purchases
• $3.2 billion to create an Australian Fuel Security Reserve and increase the Minimum Stockholding Obligation (MSO)
• $10 million in 2026-27 to develop feasibility studies to expand our domestic refining capacity
• $54.7 million over five years from 2025-26 to manage Australia’s Fuel Security Framework
• $9.2 million over two years from 2025-26 to deliver the Fuel Supply Taskforce
• $8.2 million in 2026-27 to defer cost recovery arrangements for agricultural export services



The budget made no mention of whether the reduction of the fuel excise and heavy-vehicle road users charge would continue past the original commitment to 30 June, 2026.

The NFF welcomed the Government’s $10 billion fuel security package, designed to improve domestic fuel and fertiliser resilience with an emphasis on reducing the risk of supply shocks for essential users, including regional and agricultural industries.

Cuts Across Key Areas to Impact Agriculture

Sweeping cuts across the Department of Agriculture, pests and weeds, the Inland Rail Project and regional connectivity, including the Regional Tech Hub, are expected to impact agriculture.

“There could not be a worse time to pull back investment in supply chains and regional connectivity,” Mr McIntyre said.

“The Inland Rail was designed to strengthen supply chains, ease pressure on our highways and reduce the cost of moving produce from farm gate to consumers."

Inland Rail won't be proceeding to Queensland, with the northern half of the project, connecting Parkes in central New South Wales to near Brisbane, being dumped.

The project was expected to take around 200,000 trucks off the road each year and boost regional communities in New South Wales and Queensland.

In 2023, Dr Kerry Schott conducted an independent review that concluded Inland Rail was “an important project”, which was “needed to meet the increasing national freight task”.

The axing of the Regional Tech Hub was unexpected. The NFF-run (in partnership with the Australian Communications Consumer Action Network) service helped rural people identify the best phone and internet setup for them. This relatively small line item was funded by the federal government’s Better Connectivity Plan and was particularly important in the wake of the shutdown of the 3G network.

“The Regional Tech Hub helped more than 75 regional people each day in 2025 alone," noted Mr McIntyre.

“Without continued support for this service, regional Australians may lose a trusted service that has helped thousands navigate major technology changes and stay connected."

Funding for the program was not extended, with only funding to finish the NBN rollout and wi-fi in remote communities notable inclusions in regional communication.

Cuts to National Pest and Weed Control Programs

National pest and weed control programs have been slashed, with nearly $200 million to be redirected towards other policy "priorities".

About one-third of that funding will now go towards securing agricultural export and trade opportunities.

More than $104 million will be cut from grant programs, including the Pest and Disease Preparedness and Response Programs.

Independent senator David Pocock believes the federal government has failed to back up conservation commitments with funding.

He said this year's budget was "a short-sighted and tragic budget for nature with an absolutely paltry $110.8 million over two years for the Saving Native Species fund".

"No programs that protect and manage our incredible biodiversity were extended by more than a year or two," Senator Pocock said.

The Invasive Species Council has raised specific concerns about the spread of fire ants. 

"Fire ants will continue to spread if we don't have the level of funding that's needed to contain them and eradicate them," said Jack Gough, CEO of the Invasive Species Council.

"We need to stop treating these projects as optional extras, they need to be core parts of the budget that don't get cut year to year."

National Farmers' Federation chief executive Michael Guerin said the budget had made "some pretty savage cuts to the department that we rely on, in areas that we believe we need investment".

"Biosecurity, if we get it wrong and we allow something in, we could spend generations regretting it," said Mr Guerin.

"So to see that funding in some cases only held, rather than lifted, and other cases cut, are really concerning and something we'll be taking up with the government."

Budget by Numbers

Primary production will benefit from several budget commitments, including:

• $14.8 billion fuel resilience package
• $730m of road funding for regional areas
• $23 million over four years to support agricultural exports
• $45m to sustain international trade and standards activities
• $7m to expand the Australian Trusted Trader program
• $131m for pest and disease preparedness and response programs
• $8.7m additional for the Australian Pesticide and Veterinary Medicines Authority to reduce delays affecting agricultural chemical approvals
• $315m into research, development and extension programs forecast by the Grains Research and Development Corporation, including $123m in federal contributions
• $387m over the next four years to bolster CSIRO and the Australian Centre for Disease Preparedness research efforts
• 93 additional staff to the Department of Agriculture, Fisheries and Forestry, bringing overall departmental expenses to $1.55b
  

Sources: Senator David Pocock, ABC, The Conversation, Minister for Agriculture, Fisheries and Forestry, NFF, Farm Online