While the Federal Budget is a useful indicator of the Government's priorities, it’s worth noting that in reality budgets are only a relatively small part of the game.

History is littered with multi-million-dollar budget announcements that have ultimately had no impact, or worse–a negative impact–on the outcomes they were trying to achieve. So, while what follows is our take on the hits and misses of the budget, including noticeable gaps in investment in housing, research, and agricultural productivity and sustainability, keep in mind this is only part of the story. For all of you, in your various roles as voters, business owners, investors, movers and shakers and policy makers – we’d encourage you to look beyond the budget. 

As taxpayers, we should be asking, not just how much the government is going to spend on what, but whether that investment is driving impact. Can people find an affordable place to live? Are we actually lowering emissions? How are regional communities holding up? Are we well-positioned to cope with the increase in floods and bushfires? Is our productivity improving? Are our education results improving? How’s the kids’ mental health?

So while what follows are some thoughts on the budget, we’ll keep up the pressure on a conversation about results–what’s working and what’s not. We’d encourage you to do the same.

Housing 

This year’s federal budget contained several wins for improving housing affordability, including a $54 million investment to support the uptake of prefabricated construction and measures to boost participation in the construction workforce – both strategies we have been advocating for in our Wicked solutions series on housing affordability. We also commend the implementation of a national licensing scheme for electricians as a vital step towards better mobilising our trades workforce at a time of flagging construction productivity levels. 

But it’s not all sunshine and rainbows. While Labor’s Help to Buy scheme is a feel-good program aimed at helping young people into the housing market, current levels of supply are too low to absorb the additional demand created by this policy, meaning house prices will go up. Moreover, the federal budget yet again fails to tackle desperately needed property tax reform regarding stamp duty and the Capital Gains Tax discount. This was not surprising considering the time of the budget with the upcoming election, but a stalling of necessary reform nonetheless.

Agriculture 

Investment in agricultural productivity and sustainability was a big gap in the Federal budget. While a four-year $85 million investment in border and biosecurity is welcome, as is a grab bag of $42.5 million across a number of different areas, what was missing is any sense of leadership. Australia can and should be a world-leader in regenerative agriculture – the practices that both boost productivity while protecting our natural resources for future generations. Agriculture is one of our most important industries, contributing $93 billion to GDP. It’s also a key exporter, with more than 70% of our farm output heading overseas. Our agriculture system is currently under huge pressure – with changing global expectations, soils and water bumping up against their natural limits, and land increasingly under siege as the number, scale and frequency of adverse weather events ratchets up. There’s a better way. 

We need to change our systems and processes to reward farmers investing in approaches that increase productivity and improve long term stewardship of our land whilst making it easier for them to do so. Our recent report, Cultivating Resilience, laid out a clear set of policy priorities for the Federal Government, including the need to be clearer on the intentions for the sector – including setting clear net zero objectives and a mandatory reporting timeline for the sector. We also call for boosting information capacity, in particular, prioritising the development of standardised simple measures. While the government's establishment of Environmental Information Australia is an important start, the lack of progress on cleaning up our national biodiversity and conservation laws, is not just a failure to deliver on a key election promise, it’s a failure of leadership. 

Our report also calls for more investment into agricultural research and development (R&D), an economically rational strategy for Australia, but one this budget doesn’t deliver on. When it comes to investment in R&D as a percent of GDP, Australia is well below the OECD average, coming in just above Mexico. The recent move by the Trump administration (and the US-based National Science Foundation) to review all jointly-funded projects, many of which are in agriculture, has shone a much needed spotlight on the paucity of our own government investment into research and development. We agree that having a “a sugar daddy” funding strategy doesn’t make for sensible long-term policy. We need to back ourselves. Investment in innovation in agricultural practice and regenerative practices is an investment in Australia’s future, but remains a gap in our budget.

Productivity 

The budget also falls short in addressing the vulnerabilities in Australia’s higher education sector. Recent events including the threatened termination of research collaborations with seven Australian universities by the Trump administration have highlighted the fragility of Australia’s sovereign research capabilities. 

Our university research ecosystem has become precariously dependent on foreign sources which carries an unacceptably high level of risk. This dependence comes not only from international student fees, but also from overseas partnerships.  

The United States, Australia's largest research partner, provided $386 million in funding to Australian research organisations in 2024, accounting for nearly half of the non-medical funding under the Australian Research Council.

Up to $600 million worth of research funding between Australian universities and the US is currently facing termination after several of our most prominent universities reportedly failed to satisfactorily respond to a an absurd questionnaire from the Trump administration. 

This situation underscores the urgent need for the government to bolster domestic funding for university research and reduce dependence on foreign sources. While the Federal Government has committed an additional $2.5 billion over 11 years for higher education as part of the University Accord, this investment may be insufficient given Australia's current vulnerabilities. 

To safeguard our sovereign research capability, the Government must prioritise greater domestic funding for universities and establish a more resilient framework for supporting research activities. This approach is crucial for maintaining Australia's ability to address critical challenges and retain our position as a leader in global innovation