The Business Council of Australia has welcomed strong action on national resilience, productivity, research and development, and cutting red tape in the 2026-27 Federal Budget, while saying changes to capital gains tax and negative gearing will deter investment and add complexity.
Business Council Chief Executive Bran Black said the BCA’s test for the Budget was to demonstrate a commitment to fiscal discipline while strengthening Australia’s resilience by improving our ability to compete for capital to lift productivity in an increasingly uncertain world.
“The Budget contains welcome resilience announcements and several important reforms long advocated by the BCA to lift business investment and living standards, with measures on productivity and innovation and a commitment to reduce red tape by $10 billion a year,” Mr Black said.
“Importantly, the Budget does not include a cashflow tax or gas export tax, both of which would have increased costs across the economy and put pressure on prices for Australian households and businesses.”
“We remain concerned about the complexity and net impact of changes to CGT and negative gearing in terms of making Australia a less desirable place for investment, as well as implications for housing supply.”
“Australia’s housing affordability challenge will only be solved by materially increasing housing supply, supported by faster approvals, better infrastructure and more investment in new housing.”
“Ultimately, this Budget, like most budgets, includes measures that support businesses to invest and grow and measures that don’t. At a time when the world around us is increasingly uncertain and our key competitor nations are doing everything they can to attract mobile capital, we simply can’t afford to miss any opportunity to dramatically improve our investment fundamentals.”
The following quotes are attributed to BCA Chief Executive Bran Black:
Productivity and regulation
“Reducing regulatory costs by more than $10 billion a year is a most welcome step towards lifting Australia’s productivity and investment competitiveness, with unnecessary compliance slowing home builds and pushing up costs for business.”
“The Business Council and the Alliance of Industry Associations have long called for this regulatory reduction and with costs still sitting at around $160 billion a year, and the next step is committing to a 25 per cent reduction target for all governments.”
“We strongly support work to harmonise payroll tax, reducing duplication and inconsistent rules across jurisdictions, by using the National Productivity Fund to incentivise states and territories. Many recommendations for red tape reduction have been adopted from the BCA’s Better Regulation Report.”
“With skills shortages holding back essential projects across housing, energy, infrastructure and more, we welcome the occupational licensing and skilled migration reforms to speed up entry to the workforce.”
Fiscal management
“Changes to the National Disability Insurance Scheme are welcome and necessary and the Government should get credit for making tough decisions to make the scheme more sustainable.”
“Persistent structural deficits and rising debt ultimately reduce Australia’s capacity to respond to future crises and place greater pressure on younger generations, so we are pleased to see debt reducing and a return to surplus expected sooner.”
“Ongoing discipline, combined with successful implementation of key savings measures, will now be key to achieving the forecasts included in the Budget.”
Research and development
“We welcome the first steps in implementing Ambitious Australia reforms in a constrained budget environment. Lifting the R&D Tax Incentive threshold to $200 million is a meaningful start, alongside reforming other R&D tax and governance settings.”
“The details around the R&D changes will need to be carefully reviewed to ensure there are no unintended consequences for investment.”
Business investment
“Making the instant asset write-off permanent and delivering loss carry back are useful steps for small- and medium-sized businesses and will help businesses invest, grow and create jobs.”
“With around three quarters of the investment that drives productivity coming from large companies, and economic growth slowing alongside Australia’s uncompetitive tax settings, we wanted to see more from this Budget to support investment across the entire economy.”
Health and care economy
“The Business Council supports the Government’s commitment to NDIS reform. Stronger fraud controls, clearer eligibility, mandatory provider registration and the rollout of Foundational Supports are all steps the BCA has called for, and they are aimed at returning the scheme to its original intent.”
“The real test is in implementation, particularly on governance, registration and compliance. This is a start, not a finish.”