What the 2026 Budget Really Means for Farmers

The Treasurer handed down the 2026-27 Federal Budget on 12 May. There's been a lot of talk about housing and the cost of living. But if you're running a farm, an ag business, or working the land, you're probably thinking what's in it for us?

What the 2026 Budget Really Means for Farmers

We've been through the fine print so you can stay focused on what matters. Here's what the 2026 Budget really means for farmers.

Let's be upfront.

This Budget isn't agriculture-focused. The headlines are about housing targets and household relief.

But that doesn't mean there's nothing in it for you. Some measures will affect how you run your operation, how you invest, and how much ends up in your pocket at the end of the day.

Some of it's good news. Some of it requires a rethink. And some of it means we need to have a chat about your structures sooner rather than later.

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For Farm and Ag Business Owners

The $20,000 Instant Asset Write-Off is Here to Stay

This is one you can bank on.

If your farm or ag business turns over less than $10 million, and that covers most family farms and smaller operations, you can instantly write off assets costing up to $20,000. And the good news? It's now permanent.

What this means for you: That new welder, chainsaw, irrigation pump, fencing gear, or piece of workshop equipment? If it's under $20,000, you claim the full deduction in the year you buy it.

No more wondering if the scheme will get extended at the last minute. You can plan your purchases with confidence.

A word of advice: If you're buying multiple items, keep them separate where you can. A $15,000 pump and an $18,000 set of tools are two write-offs. Bundle them into a single $33,000 purchase, and you miss out on the instant deduction for both.

Think about timing, too. If you've got purchases planned, spreading them across financial years can maximise your deductions.

Fuel Excise Cut But Don't Get Too Excited

The government is cutting fuel excise for three months. That's $2.9 billion worth of relief at the bowser.

If you're running tractors, harvesters, trucks, and utes, and let's face it, what farm isn't, you'll see some savings on diesel in the short term.

But here's the thing: It's temporary. Three months and it's done.

Don't build it into your long-term budgets. When the cut ends, prices go back to where they were. Use the savings while they're there, but plan for normal fuel costs going forward.

And remember, many farmers already access the fuel tax credit scheme for off-road diesel use. Make sure you're claiming everything you're entitled to. This temporary cut is on top of that.

Energy Bill Relief

The Budget includes $1.8 billion in electricity bill relief.

If you're running pumps, sheds, cold storage, processing facilities, or any powered infrastructure, your electricity costs are a real part of your bottom line.

This relief should help ease some of that pressure. It's not a permanent fix, but it's something.

497 Nuisance Tariffs Gone

From 1 July 2026, the government will abolish 497 tariffs that add compliance costs and red tape to imported goods.

What this could mean for agriculture: If you're importing equipment, machinery parts, specialised tools, or agricultural inputs from overseas, you might see reduced costs and less paperwork.

Talk to your suppliers and check whether any of your regular purchases were subject to these tariffs. Savings might flow through.

R&D Tax Incentive Threshold Lifted

This one's for the innovators.

From 1 July 2028, the R&D tax incentive threshold increases from $150 million to $200 million turnover.

If you're involved in agricultural research, developing new farming technologies, or working on sustainable practices, this gives larger ag businesses more room to access R&D incentives as they grow.

For most family farms, you probably won't hit these thresholds. But if you're part of a larger operation or agricultural company, it's worth noting.

New $1,000 Instant Tax Deduction

From the 2027-28 income year, there's a new instant tax deduction of up to $1,000 coming in.

We're still waiting on the full details of how this will work. But it could be handy for smaller purchases, such as safety gear, tools, office equipment, that sort of thing.

Keep your receipts, and we'll make sure you claim everything you're entitled to when the time comes.

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For Farmers with Investment Structures

Now, here's where things get serious. If you've been building wealth outside the farm through property investments or trust structures, significant changes are coming.

Negative Gearing is Being Scrapped

The government is removing negative gearing for property investments.

The good news: Existing arrangements are grandfathered. If you already own investment properties with negative gearing in place, you're protected. Your current tax treatment stays the same.

Going forward, New investment properties won't have the same tax benefits. If you've been planning to buy another rental, maybe as part of your retirement strategy or to diversify off-farm income, the numbers will look different now.

For farming families who've used property investment to build wealth alongside the farm, this is a meaningful shift.

It doesn't mean property is suddenly a bad investment. It just means you need to reassess the strategy. We should talk about what makes sense for your situation.

CGT Discount Replaced with Indexation

The 50% capital gains tax discount is being replaced with an indexation system.

Here's what that means in plain English: Under the old rules, when you sold an asset you'd held for more than 12 months, you automatically halved the capital gain before calculating tax.

Under the new rules, instead of halving the gain, your cost base gets adjusted for inflation. The amount of tax you pay depends on how long you've held the asset and what inflation has done over that time.

What this means for farmers:

• If you're holding land, property, or other assets long-term and inflation runs high, indexation could actually work in your favour.

• If you're selling within a shorter timeframe, you could pay more tax than under the old system.

This is particularly important for farm succession planning. If you're thinking about transferring land, selling off parcels, or restructuring the family operation, the timing of those decisions matters more than ever.

Our advice: Before you make any major asset decisions, let's sit down and model the numbers under the new rules. What worked five years ago might not be the best approach today.

30% Minimum Tax on Discretionary Trusts

From 1 July 2028, discretionary trusts will face a minimum tax rate of 30% on distributions.

This is a big one for farming families.

Trusts have been a cornerstone of farm structures for decades. They've provided flexibility for distributing income to family members, managing succession, and protecting assets.

Under the new rules, that flexibility is being curtailed. Distributions from discretionary trusts will be subject to a 30% minimum tax rate, regardless of the recipient's personal tax situation.

What this means for your farm: If you're currently distributing income to family members on lower tax rates, adult children studying, a spouse not working full-time, or parents in retirement, the tax savings you've been getting will shrink significantly.

The government expects to raise $4.5 billion over five years from this measure. That money's coming from business owners and farming families like yours.

Here's what we need to do: Don't panic, but don't ignore it either. We have until 1 July 2028, which may sound like a long time, but will come around quickly.

We need to review your trust structure and consider whether:

• A trust is still the best vehicle for your situation

• There are alternative structures that might work better

• The timing of any planned distributions or restructures should change

The key is acting while you still have options. Once the changes take effect, your flexibility shrinks.

Succession Planning Just Got More Complicated

Let's talk about the elephant in the room for many farming families: succession.

Passing the farm to the next generation has always been complex. Now it's even more so.

The CGT changes mean the timing of asset transfers matters more. The trust changes mean that the structures many families have used for decades need to be reviewed. And the broader tax environment means getting advice early is more important than ever.

If you're thinking about:

• Transferring land to children

• Bringing the next generation into the business

• Restructuring ownership

• Planning for retirement

We need to have a conversation sooner rather than later. The decisions you make now will affect your family for decades.

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For Farm Employees and Family Members

The Budget includes some measures that will help the people working on your farm.

The $250 Tax Cut

From the 2027-28 income year, every worker gets a $250 tax cut.

It's not life-changing, but it's something. Farm workers, family members on the payroll, and you, if you're drawing a wage, will see a little more in your pockets.

Cost of Living Relief

The Budget includes:

• $1.8 billion in electricity bill relief

• Temporary fuel excise cuts

• Various household support measures

Your team is feeling the cost-of-living pressures just like everyone else. Regional areas often get hit harder, with too little competition, fewer options, and higher transport costs.

These measures should help ease some of that strain for your workers and their families.

The Economic Reality for Agriculture

Let's zoom out and talk about the bigger picture.

Interest Rates Aren't Coming Down Fast

CommBank's analysis describes this Budget as "neutral-to-mildly expansionary" and notes it "does little to help in the fight against inflation."

Translation? Don't expect interest rates to drop quickly.

If you've got farm debt, equipment finance, or loans against property, plan for repayments to stay where they are for a while yet.

This matters for cash flow planning, especially if you're coming off a run of good seasons and have taken on debt to expand or upgrade.

The Deficit Reality

The government is running a $31.5 billion deficit this year. A balanced budget isn't expected until 2034-35.

The housing and trust tax changes alone are expected to raise $77.2 billion over the decade.

What does this tell us? The government needs revenue. They're finding ways to get it. The tax environment isn't getting easier anytime soon.

Commodity Prices and Markets

The Budget doesn't directly address commodity prices or agricultural markets. Those are driven by global factors largely beyond any government's control.

But here's what we know: when costs are rising (fuel, labour, inputs) and tax benefits are shrinking (trust distributions, negative gearing), your margins get squeezed from both ends.

Good financial management isn't optional anymore. It's essential.

What Happens with Drought and Disaster Support?

The Budget maintains existing drought preparedness and disaster response frameworks. There are no major new announcements in this space.

If you're in an area affected by drought, flood, or fire, existing support programs continue. But there's no significant new funding or expanded eligibility that we can see.

Our advice:

Make sure you're accessing everything you're entitled to under current programs. And keep building your own resilience, Farm Management Deposits, insurance, diversification, because you can't always count on government support arriving when you need it.

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What Farmers Should Do Now - Action Plan

1.	Review Your Trust Structure – Urgently	The 30% minimum tax is coming. If you're using a discretionary trust, we need to review whether it's still the right structure for you. There may be better options, but only if we act before the changes take effect
2.	Reassess Your Succession Plan	CGT changes, trust changes, and the broader tax environment mean your succession plan needs a fresh look. Don't assume what worked for the neighbours five years ago will work for you today
3.	Use the Instant Asset Write-Off Strategically	It's permanent now. Plan your equipment purchases to maximise deductions. Think about timing across financial years
4.	Review Your Property Investment Strategy	If you've been using property to build wealth off-farm, the negative gearing and CGT changes mean you need to run the numbers again. It's not necessarily a bad strategy, but it needs adjusting
5.	Claim Your Fuel Tax Credits	Make sure you're claiming everything you're entitled to for off-road diesel use. The temporary excise cut is nice, but your fuel tax credits are worth more in the long run
6.	Budget Conservatively	Costs aren't coming down. Interest rates aren't dropping fast. Build realistic budgets that account for ongoing pressure
7.	Keep Impeccable Records	Good record keeping protects you and ensures you claim every deduction you're entitled to. It's also essential if you're ever audited

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We've Been Doing This Since 1962

At WLW Group, we've been helping farming families and agricultural businesses navigate change for over sixty years.

We've seen droughts, floods, commodity crashes, and more government policy changes than we can count. We're still here, and so are the families we work with.

This Budget brings real changes that need real attention. But it's not the first time agriculture has had to adapt, and it won't be the last.

The farms that thrive are the ones that plan ahead, get good advice, and make decisions based on their own situation, not what everyone else is doing.

That's where we come in.

If you want to understand exactly how this Budget affects your farm, your family, and your future, let's have a yarn. We'll review your numbers, explain your options in plain English, and help you create a plan that works. Let's chat.

This article provides general information only and does not constitute financial, tax, or legal advice. The 2026-27 Budget measures discussed are subject to passing legislation. Please seek professional advice tailored to your specific circumstances before making any decisions.