Industry leaders, founders and business experts share their unfiltered reactions to the 2026-27 Federal Budget
The 2026-27 Federal Budget has drawn sharp reactions from Australia’s business and technology leaders. Whilst some measures delivered long-awaited certainty, others raised concerns about competitiveness, ambition and execution. Industry leaders share their unfiltered reactions on what won, what lost and what’s missing from Australia’s economic blueprint.
The winners
Small businesses gain certainty
Simeon Duncan, Head of Corporate Affairs and Public Policy APAC at Intuit: “Last night’s Budget delivers for Australia’s small businesses. Making the $20,000 instant asset write-off permanent ends years of uncertainty for the 2.6 million businesses driving our economy. The $62 million Consumer Data Right investment, including the ATO data-sharing pilot, picks up a key recommendation from Intuit’s pre-Budget submission. Small businesses need certainty and simpler ways to use their own data. The Government has moved on both. We’ll keep working with Treasury and the ATO on what comes next.”
Angad Soin, Managing Director Australia and New Zealand, Global Strategy Officer at Xero: “Making the instant asset write-off permanent, extending the Small Business Debt Helpline and loss refundability reforms are welcome steps in last night’s Budget. As is the red tape package, which signals genuine intent to reduce the burden on Australian businesses.”
Laurence McLean, Director of Operations at Peninsula Australia: “The Federal Budget delivered several measures aimed at supporting small businesses, including making the instant asset write-off permanent, extending tax relief measures and introducing initiatives designed to reduce red tape and improve productivity. Overall, the Budget represents a positive signal for business confidence.”
Workers receive cost-of-living relief
Brendan Straw, Shopfully Country Manager for Australia, recognised the household focus. “It is encouraging to see the Federal Budget place cost-of-living relief at the centre of its agenda, with measures aimed at helping Australians manage pressure across tax, fuel, housing, healthcare and wages. The new tax cuts, Working Australians Tax Offset, $1,000 instant tax deduction and temporary fuel excise relief are practical measures that recognise how stretched household budgets remain. For many Australians, any extra breathing room will be welcome, particularly when everyday costs continue to shape decisions around where money goes and what can wait.”
“In retail, that pressure is continuing to show up in the way people shop. Australians are not just looking for savings at the checkout; they are planning more carefully, comparing options earlier and making more deliberate decisions about where, when and how they spend. Even with Budget relief, the value-first mindset developed over recent years is unlikely to disappear quickly. For retailers, this means clear offers, easy-to-find promotions and smarter digital engagement will remain critical. The retailers that make value visible and help shoppers feel confident before they buy will be best placed to stay connected in a highly cost-conscious environment.”
Cyber security investment recognised
Tim Wedande, Field CTO for Asia Pacific and Japan at Saviynt, noted the Budget’s cyber security maturity. “The 2026-27 has officially been handed down, and for us in the cyber security industry the takeaway is that cyber has shifted from an ’emergency uplift’ to essential service delivery. Despite the word ‘cyber’ being absent from the Treasurer’s speech, we see $2.1 billion assigned for Service Australia’s technical resilience and $89.3 million for Horizon 2 of the 2030 National Cyber Security Strategy. This reflects on our government seeing cyber core to the resilience of our infrastructure rather than a headline grabbing initiative.”
“With 2026 Horizon 2 now also having started (the second phase of Australia’s Government authored Cyber Security strategy), an expected level of maturity is expected to be rolled out for the whole of economy in-line. Being fiscally responsible and doing more with the basics such as Identity and Access Management, is vital for essential Australian service delivery. It underpins core security controls across human, non-humans (including Agentic AI) within the workforce and across global supply chains. It also supports building the cyber resilience foundation that progresses us towards some of our more cyber mature allies such as the US, along with our 2029 Horizon 3 ambition to be seen as a world leader in the development and adaptive cyber risk management of advanced AI.”
Matthew Lowe, Regional Director Pacific at Anomali: “The cyber security threat landscape is evolving faster than traditional security operations were designed to handle. AI is enabling attackers to move at machine speed, automating reconnaissance, targeting identities, and compressing response windows from days to hours. As a result, we welcome the government’s ongoing investment in Australia’s cyber security posture which will support government agencies to further reinforce digital service delivery, reduce fraud and accelerate modernisation of public sector workforce environments.”
“As governments and enterprises continue digital transformation initiatives, cyber resilience increasingly depends on operational intelligence: the ability to rapidly prioritise threats, make decisions faster, and respond with context. The challenge today is helping security teams determine what matters most and what action to take next. This budget will help agencies to further improve productivity and simplify security.”
AI positioned as economic priority
Amar Maletira, Chief Operating Officer at Glean: “2026 budget reinforces that AI is becoming a serious economic priority for Australia. That is the right signal. The companies seeing the strongest returns from AI are not treating it as a one-off technology investment or a set of isolated pilots. They are making AI useful across the workforce, so every employee can access the right knowledge and context in the flow of work. For many organisations, the challenge is no longer interest in AI. It is execution.”
“Australian businesses have the appetite, but real value depends on connecting AI to the tools, systems, data, and workflows employees already rely on every day. AI that sits inside a single application can only go so far. The bigger opportunity is an enterprise-wide layer that helps people find information, make faster decisions, and turn knowledge into action. Australia has the talent, enterprise base, and momentum to move quickly. With the right investment, more organisations can move beyond experimentation and build the foundations for AI at scale. The businesses that act now will create an advantage that compounds over time. Those who treat AI as a budget line item will still be stuck in pilot mode.”
John Deeb, VP Customer Success and Field CTO APAC at Workato, noted the productivity focus. “It’s encouraging to see the Budget place technology at the centre of Australia’s productivity agenda, particularly through AI, Digital ID and reforms designed to make government simpler to deal with. Measures such as AI-enabled public sector tools and the ‘tell us once’ approach demonstrate a clear intent to reduce duplication and improve service delivery. These are welcome reforms, but they will need deeper investment in the integration and automation needed to make digital government work in practice.”
Startup recognition with consultation opportunity
Anish Sinha, co-founder of upcover: “On balance, as a founder, it’s difficult to pass a verdict on this budget. It does the job well in certain areas like cash flow, loss carry-back and parts of R&D. But founder and employee equity is where the real debate sits. If we want people to build ambitious companies from Australia and we want more operators to join the startup ecosystem who will one day become founders and eventually angels themselves, we have to preserve the upside that makes the risk worth taking.”
“The Budget has rightly recognised that startups are different by committing to consult on how CGT reform interacts with early-stage investment and that consultation is important. The upside founders hope to earn at the end of a long, uncertain journey is part of what makes people take irrational levels of risk and commit years of their lives to building something that may fail.”
The losers
Founders and early-stage investors face CGT uncertainty
Julius Wei, Co-founder at Boman Group: “Australia is not competing in a vacuum. This budget stabilises, it redistributes, it even distinguishes policies for emerging startups and growth businesses. But what it does not do is position Australia to win the next decade of innovation against an Asia-Pacific that is moving fast and spending boldly. On the measures that matter most to founders, investors, and high-growth businesses, this budget does not move the needle far enough.”
“The proposed CGT changes create real headwinds for founders, early-stage investors, and high-growth businesses at precisely the moment Australia should be competing harder for capital and talent. Now that it’s spelt out in the budget papers, the damage is done. The uncertainty that it will create will ricochet and impact decisions, well before a verdict is reached on an exemption via industry consultation.”
“Across the Asia-Pacific and North America, peer markets are actively sharpening their settings to attract exactly the companies and investors Australia risks pushing to the sidelines. Even New Zealand is appearing more attractive, by not taxing capital gains. Over time, that influences where founders choose to build, where capital gets allocated, and where the best talent decides to land.”
“Australia’s domestic early- and mid-stage capital pool remains too small to fund the next generation of high-growth companies at scale. The deeper question is whether these revised settings can position Australian fund managers as credible vehicles for international institutional capital — family offices, sovereign wealth funds, regional LPs — seeking exposure to Australian innovation. This budget edges toward it rather than seizing it, and in a competitive regional landscape, edging forward is rarely enough.”
Bronwyn Fox AO, Deputy Vice Chancellor of Research and Enterprise at UNSW: “This Federal Budget acknowledges the importance of research and innovation, but Australia still has a major ‘missing middle’ problem. The gap between breakthrough research and commercially viable products. We have world-class research capability, but not enough support to help deep tech companies scale locally.”
“Countries like Germany, the UK and the US have invested in pilot-scale facilities and innovation ecosystems that help turn research into industry. Australia needs a coordinated national approach if we want to remain globally competitive.”
“Sydney is already recognised as one of the world’s leading quantum ecosystems, and Australia has a genuine opportunity to lead globally. But we can’t afford to repeat the mistakes made with solar PV, where Australian innovation created enormous value that was ultimately captured offshore.”
“If we’re serious about building a deep tech economy, we also need to be careful about changes to capital gains tax. Founders and early stage investors take enormous risks over many years, and weakening incentives risk driving capital, future jobs and industries elsewhere.”
Anish Sinha at upcover pointed to Canada’s approach: “Canada’s 2024 Budget is a useful comparison. Even while reforming capital gains, Canada proposed an entrepreneur-specific incentive to reduce the tax burden on eligible founder gains. The policy intent was clear: successful founders should have more after-tax capital to recycle into new ventures, startup investment, mentoring and, in some cases, another company.”
“That is the principle Australia should bring into its CGT consultation. Founder equity is high-risk, illiquid and usually earned over years of underpaid work and uncertainty. If Australia wants more global technology companies built here, the final CGT settings need to preserve the upside that makes the risk worth taking.”
AI ambition doesn’t match the moment
Jake Shelley, Jiffi co-founder: “Let’s be honest about what happened last night. Microsoft committed $25 billion to Australian AI infrastructure, a single American company outinvesting our entire government. Chalmers responded with $70 million, and if you read the actual budget papers, there’s no new money in it. It’s recycled funding through a grants program announced back in December.”
“And what did the government actually deploy AI for in this budget? Speeding up building approvals and making the National Construction Code easier to navigate. I’m not dismissing that, faster approvals matter, but let’s call it what it is. That’s a filing system upgrade, not an AI industry strategy.”
“To be fair, there are some positive moves in here, the R&D incentive has been tweaked and VC caps have been lifted. But the meaningful changes don’t kick in until 2028, and they’re already being undercut by CGT reforms that risk making Australia less attractive for exactly the kind of risk-taking the government says it wants to encourage. You can’t build a startup ecosystem with one hand while taxing founders out of it with the other.”
“Australia has everything it needs to be a genuine AI powerhouse: world-class researchers, a strategic Indo-Pacific position, and $4.5 trillion sitting in superannuation. The real opportunity was to unlock that super capital into AI investment and back Australian-built companies at scale. Instead we got a filing system and a grants program. The ambition has to match the moment and right now, it doesn’t.”
Angad Soin at Xero highlighted the small business AI gap. “But on AI, the government could have taken more proactive steps to support small business. Macro investments in research and new government platforms are important, but not the practical support small businesses are seeking. Almost a quarter of those we surveyed said AI investment incentives were the single most important thing they wanted from the government. Small businesses are not asking for AI to be treated as a future concept. They want support that helps them integrate it into their day-to-day business operations, through the advisors, systems, and software they use.”
“This points to a broader gap. Meaningful productivity support for small businesses was largely missing. Small businesses contribute around one third of Australia’s GDP and employ more than five million Australians. If the government is serious about lifting national productivity, small businesses need to be central to that plan. This means making it easier for them to adopt technology, modernising outdated regulatory frameworks, and strengthening rules to ensure they get paid on time.”
“A thriving small business economy is in Australia’s best interest. There is more work to do, and we look forward to working with the government to put the small business economy at the centre of Australia’s productivity agenda.”
Shift workers and frontline economy overlooked
Ciaran Hale, CTO at Deputy: “For Australia’s shift workers, this Budget falls short of a full national strategy for the people who keep Australia running outside standard office hours in retail, hospitality, healthcare and services sectors. The shift work economy is about whether life gets any easier for the nurse driving home after a night shift, the retail worker juggling penalty rates and rent, the aged care worker stretched across long rosters, the logistics operator absorbing fuel shocks, or the hospitality business trying to roster fairly while costs keep rising.”
“While this Budget helps shift workers through tax cuts, eases fuel pressure, backs hospitals, invests in aged care and supports small business productivity, it still doesn’t fully redesign policy around the reality of shift work. Australia’s economy doesn’t stop at 5 pm. Its Budget thinking should not either.”
“The three shortfalls the Budget failed to address for shift-based businesses are childcare availability, workforce sustainability, and industrial relations complexity. Specifically, the Budget continues to treat childcare as a daytime participation policy, ignoring the reality where frontline staff need care options that match their rosters. It frames labour shortages as a supply problem rather than a sustainability crisis driven by burnout, and it leaves SMBs to navigate an exhausting web of award compliance and penalty rates without specific administrative relief.”
“Australia’s frontline economy is no longer a peripheral labour market issue. It is the operational backbone of national productivity, healthcare delivery, supply chains, consumer spending and community resilience. Future Budgets will need to stop treating shift work as an exception to the economy. Because for millions of businesses and workers, it is the economy.”
Red tape reduction remains theoretical
Laurence McLean at Peninsula Australia: “However, whether it translates into sustained productivity gains will depend on if SMEs are genuinely given more time and operational breathing room, not just financial incentives. While these measures will be welcomed by many small businesses, there remains a clear gap between financial support announced in the Budget and the day-to-day operational pressures business owners continue to face. For many small businesses, the challenge is no longer just cash flow. It’s time, capacity and managing increasingly complex workplace obligations while trying to grow the business.”
“Tax incentives may help businesses invest in equipment and technology, but they don’t necessarily reduce the people-management and Fair Work Act compliance burden many business owners are carrying every day. As business confidence improves following the Budget, businesses should also focus on building strong workplace foundations, as scaling without the right HR systems in place can quickly expose employers to operational and compliance risks. Reducing red tape on paper does not always reduce the practical administrative burden business owners face every day.”
R&D definitions risk excluding practical innovation
Anish Sinha at upcover raised concerns about implementation: “The R&D changes are directionally good, but the detail will matter a lot. Narrowing support toward core experimental R&D makes sense in theory, but for startups building in regulated industries, the line between ‘core’ and ‘supporting’ expenditure is not always clean.”
“In insurance, fintech, health and other regulated sectors, product development, compliance, data work, testing, security and customer implementation often happen together. AI makes that question even more important. As software becomes faster and cheaper to build, the real innovation is often not just writing code. It is working out how to apply new technology safely in complex, regulated environments. If the rules define core R&D too narrowly, we risk excluding exactly the kind of hard, practical innovation Australia should be encouraging.”
Julius Wei at Boman Group noted compliance burden disparities. “There are genuine bright spots. The ESVCLP refinements and R&D recalibration show policy intent moving in the right direction. The zero-CGT treatment under ESVCLP now stands out more sharply against the broader CGT changes, which is a meaningful relative shift for institutional capital. But intent and execution are different things. Compliance thresholds and the move away from accepting supporting R&D favour larger corporations with established legal and finance teams over the early-stage companies that arguably need the support most.”
The risks
Data infrastructure must precede AI deployment
James Eagleton, Managing Director ANZ at Cohesity: “The 2026 Budget arrives at a critical moment for Australia’s economic competitiveness and national security. The productivity measures to develop digital government infrastructure, cyber security and online safety are pivotal to Australia’s next phase of innovation but there are still important considerations to make.”
“Productivity debates tend to focus on investment, skills, and technology adoption. Yet an increasingly important constraint is often overlooked: how quickly organisations can recover when disruption occurs. Whether from system outages, cyber incidents, or operational failures, prolonged recovery times can quietly erode the economy. In effect, speed of recovery has become a hidden productivity function that can influence business outcomes exponentially, when systems fail.”
“Cohesity’s latest research underscores this urgently. 85% of Australian enterprise businesses suffered a materially impactful cyberattack last year, significantly above the global average of 54%. Of those, 91% reported revenue losses, with nearly a third losing up to 10% of annual revenue.”
“AI and digital innovation are essential to lifting productivity, but they depend on resilient and well-governed data environments. Many Australian organisations are managing fragmented backup systems, siloed data repositories, and complex recovery processes that slow decision-making and operations. Before we introduce AI at scale, organisations need to get their foundational data infrastructure right. When they do, AI can deliver what it promises: automating manual processes, uncovering real insights, and helping businesses move faster. The total $654.3 million commitment over four years to maintain the security of the Australian Governments Digital ID System along with a number of other funding commitments including the use of AI to accelerate environmental approvals and the introduction of measures targeting scam prevention and news media sustainability are important. However, productivity improvement also requires treating cyber resilience and recovery speed as foundational, not an afterthought.”
“Discussions about public sector efficiency often assume the challenge is primarily about reducing duplication or increasing digital capability. In reality, much of the efficiency problem stems from something more practical: the steady accumulation of overlapping systems over time. As new platforms are introduced to solve specific problems, older systems are rarely fully retired, creating layers of complexity that become increasingly difficult to manage.”
“This data fragmentation can be costly. When departments can’t access clean, trustworthy data across silos, they spend time sorting data, and often risk deploying AI on fragmented, unprotected data, which can be risky.”
“Before the government can leverage AI for genuine efficiency, it needs to treat data consolidation and recovery as a foundation. That means consolidating data, so it’s protected, auditable, and recoverable. This also means being able to rapidly restore trust in data when incidents or attacks occur. The commitment to develop digital government infrastructure and to streamline funding into AI technology reflects commitment to reform, but true efficiency and meaningful insights will depend on the government building resilient and unified data environments.”
Jeremy Pell, Country Manager ANZ at Elastic, warned about AI without solid foundations.
“The government is right to use AI to cut through the approvals backlog, whether that’s environmental assessments or medicine approvals, but technology is not a magic wand. AI is only as good as the data it can find. If these tools aren’t grounded in a solid data foundation, they will simply hallucinate wrong answers, leading to legal disasters and even more red tape. To succeed, these tools must be grounded in a robust, searchable data foundation or they will create more bottlenecks than they solve.”
“An AI Safety Institute is a great start, but policy alone won’t stop a data breach. As APRA has consistently warned the financial sector, the real danger is that we are flying blind. Most organisations have their data locked in silos, meaning they can’t actually see how AI is using or leaking their information. The $206 million for APRA and ASIC’s data and cybersecurity capability is welcome, but investment in the regulator doesn’t automatically lift the floor across every organisation they oversee. You cannot secure what you cannot see.”
System integration will determine digital government success
John Deeb at Workato highlighted integration challenges. “Digital reform across government often runs into the same challenge of connecting fragmented systems and ensuring information can move securely between old and new platforms. Without the right integration layer, departments risk adding new technology on top of old processes, leaving teams reliant on manual handovers between systems and limiting the impact of new investment.”
“If Australia wants digital government and AI investment to translate into faster services and better outcomes, integration and automation must be central to execution. Reforms like ‘tell us once’ show the right ambition, but they will only deliver if agencies can connect the systems, data and workflows that sit underneath them.”
Jeremy Pell at Elastic emphasised avoiding new silos. “Between GovAI, Digital ID, the PsiQuantum quantum computing investment, and the billions already flowing through active government digital projects, this budget represents a once-in-a-generation chance to modernise Australia, but we must not spend it building new digital dead-ends. We need systems that talk to each other, not more disconnected silos. Every dollar spent must ensure that Australian data remains searchable, secure, and firmly under Australian control.”
National resilience requires coordinated testing
James Eagleton at Cohesity called for sector-wide coordination. “Resilience is often discussed as a problem for individual organisations but it is a strategic national imperative. When critical services fail, including in energy, finance, healthcare, communications, economic disruption can be widespread. Organisations don’t recover in isolation; they recover only when their suppliers, partners, and dependencies can also restore normal operations.”
“Our cyber resilience data reveals a critical gap: 56% of businesses report confidence in their cyber resilience strategy, yet 53% still say they need to test and create more realistic recovery plans. This gap between perceived readiness and actual capability is costly, and we see this in the 61% of Australian businesses that received fines or penalties following cyberattacks. This is the highest rate globally, and it shows that many organisations may be confident but still lack rigorous recovery testing.”
“True national resilience requires moving beyond individual incident response toward coordinated, tested continuity planning across sectors. That means regular recovery testing, validated procedures, and clear coordination protocols so that when disruption hits, critical services can stabilise and recover in a coordinated way. The budget funding directed toward digital government infrastructure, cyber security and online safety all demonstrate commitment to national security, and it’s important now that we look at coordinated recovery testing and validation to ensure true national resilience.”
Cyber security investment must match the threat
Jeremy Pell at Elastic warned about the AI arms race. “Cyber security didn’t get mention in the Treasurer’s speech, and that is a concern. We are in a permanent AI arms race, foreign hackers are now using AI to attack us at a speed no human analyst can stop, and the era of manual defence is over. The $89 million to sustain the Australian Cyber Security Strategy shows the government hasn’t abandoned the issue, but sustaining existing initiatives is not the same as matching the threat. In 2026, the only way to win is with a defence that moves as fast as the attack, and we would like to see that ambition reflected more boldly in future budgets.”
Conclusion
The 2026-27 Federal Budget delivers wins for small businesses through permanent instant asset write-off and loss provisions, provides cost-of-living relief for workers, and positions cyber security as essential infrastructure rather than emergency response.
However, the losses and risks may outweigh the gains for Australia’s innovation economy. Capital gains tax uncertainty is already influencing founder and investor decisions, AI investment lacks the scale and ambition to compete regionally, and execution challenges around data infrastructure and system integration threaten to undermine digital transformation ambitions.
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
