Despite some wins, this budget won’t transform regional Australia

Since at least the early 1990s, much of regional Australia has felt overlooked^[1] by the rest of the country.

Our regions have seen themselves as disadvantaged^[2] compared to other parts of the nation, ignored^[3] when new policies are being developed and unable to access services that match the quality available in the big cities.

That sense of neglect has helped drive the rise of One Nation^[4] specifically and populist politics more generally.

So, what has the 2026 federal budget^[5] delivered for the regional First Nations communities, industries and country towns that make up about a third^[6] of Australia’s population?

How will the regions fare under this budget’s headline initiatives? And what impact will new, regionally focused programs have over coming months and years?

A place to call home

Housing and tax are at the centre^[7] of this year’s budget. The government has closed off access to negative gearing on established homes (for purchases made from budget night^[8] onwards) while also changing the way capital gains are calculated and taxed.

The government’s intention is to make investing in rental property less attractive – and by reducing investor demand, lower house prices and help more first home buyers^[9] into the market.

But these changes will affect urban and regional parts of Australia differently. Prices may be less likely to fall in regional areas where there’s upward pressure due to the high cost of building^[10], rather than speculation.

Some investors may leave regional housing markets, reducing the supply of rental housing. However, this impact is unlikely to be large given that rental returns are frequently higher^[11] in the regions than in the metropolitan centres.

The budget has set aside A$2 billion^[12] to help local governments cover the cost of the infrastructure needed to develop land for new housing. A quarter of this ($500 million) has been earmarked for the regions – recognising the depth of the housing crisis in regional Australia^[13].

But this may still fall short of what’s needed, without a more systematic approach to ensure regions can continue to provide housing as they grow.

Read more: Will this budget really make housing fairer for more Australians? It’s a good start^[15]

Tax reform and a trust carve-out for farmers

Other budget measures will deliver small-scale benefits for regional Australians. The new $250 Working Australians Tax Offset^[16] will have a bigger impact in regional areas, which have a higher proportion of low-income households^[17] than Australia’s capital cities.

And many farmers will be breathing a sigh of relief, after Tuesday’s budget confirmed^[18] farming family trusts would be exempt^[19] from a new 30% minimum tax rate on discretionary trusts.

We often think of trusts as something only wealthy Australians have. But they play a vital role in many farming regions. Trusts can help farming families^[20] manage the good years and the bad, while also helping with succession and the sustainability of the farm.

But farming and environment groups have expressed disappointment^[21] about funding cuts for agriculture, fisheries and forestry, including from pest management and weed control programs.

What’s missing?

The 2026 budget is almost silent on some key concerns for regional Australia.

Immigration is important for the regions, with many crops and large infrastructure projects depending on migrants for their workforce. Regional businesses will be concerned their growth will stall unless there is greater certainty around migration targets and projects – particularly regarding low-skilled work.

Significant regional health initiatives are largely absent^[22] from this budget. The government has invested $11.4 billion^[23] with plans to extend bulk billing to more than 90% of GP visits by 2030.

But this is unlikely to help regions where there are no doctors, or so few that lengthy wait times are inevitable. Only six new GP clinics^[24] will be established – all in one New South Wales region.

Infrastructure priorities

Every budget includes funding announcements for new infrastructure projects. But relatively few initiatives have been included in the 2026 budget, and the most prominent new investments will not sit well with regional communities.

Last week’s dumping of the northern half of the Inland Rail^[25] freight project was unwelcome news^[26] for many living in regional Australia.

This sense of not being a priority to Canberra was only heightened when, just days after that Inland Rail cancellation, the federal government announced it would spend another $3.8 billion^[27] on Melbourne’s controversial Suburban Rail Loop.

Impacted, but not transformed

The 2026 budget will be remembered for addressing the overly generous tax treatment^[28] of housing and compensating lower-income households for the rising cost of living. Australia’s regions will be affected by these changes, but they will not be transformed by them.

Regional Australia needs policies and investments that boost new housing construction – more than this budget delivers – as well as better services and support to help businesses thrive. Perhaps those needs will be addressed in the next budget.

References

1. ^{^} felt overlooked (theconversation.com)
2. ^{^} seen themselves as disadvantaged (theconversation.com)
3. ^{^} ignored (theconversation.com)
4. ^{^} the rise of One Nation (www.ppesydney.net)
5. ^{^} 2026 federal budget (theconversation.com)
6. ^{^} about a third (www.abs.gov.au)
7. ^{^} at the centre (theconversation.com)
8. ^{^} from budget night (budget.gov.au)
9. ^{^} help more first home buyers (theconversation.com)
10. ^{^} high cost of building (www.ahuri.edu.au)
11. ^{^} frequently higher (www.cotality.com)
12. ^{^} A$2 billion (ministers.treasury.gov.au)
13. ^{^} housing crisis in regional Australia (www.regionalaustralia.org.au)
14. ^{^} Stephanie Gardiner/AAP (photos.aap.com.au)
15. ^{^} Will this budget really make housing fairer for more Australians? It’s a good start (theconversation.com)
16. ^{^} $250 Working Australians Tax Offset (theconversation.com)
17. ^{^} higher proportion of low-income households (doi.org)
18. ^{^} Tuesday’s budget confirmed (budget.gov.au)
19. ^{^} exempt (www.netimes.com.au)
20. ^{^} help farming families (doi.org)
21. ^{^} expressed disappointment (www.abc.net.au)
22. ^{^} largely absent (theconversation.com)
23. ^{^} $11.4 billion (budget.gov.au)
24. ^{^} six new GP clinics (www.health.gov.au)
25. ^{^} northern half of the Inland Rail (theconversation.com)
26. ^{^} was unwelcome news (www.abc.net.au)
27. ^{^} another $3.8 billion (www.theguardian.com)
28. ^{^} overly generous tax treatment (theconversation.com)