The 2026 Federal Budget lands on 12 May. Before the night, several major measures are already confirmed. Here is what small business owners need to know right now.
Note: This article covers only measures confirmed by the Government ahead of budget night on 12 May 2026. Reported but unconfirmed measures are clearly labelled as such. Dynamic Business will cover all confirmed small business announcements on budget night.
The Federal Budget lands next Tuesday evening and for small business owners already navigating rate rises, fuel cost surges, and Payday Super obligations arriving on 1 July, what the Treasurer announces that night will matter considerably. Several measures are already known. Others are widely reported but not yet official. Here is the honest breakdown of what you can count on and what is still speculation.
What is already confirmed
The most significant pre-budget announcement came from Prime Minister Albanese, who confirmed the budget will include a $10.7 billion Australian Fuel Security and Resilience Package. The package has three components. First, $7.5 billion for a Fuel and Fertiliser Security Facility to increase supply and storage through loans, equity, guarantees, insurance, and price support. Second, $3.2 billion to establish a permanent government-owned Australian Fuel Security Reserve of around one billion litres, focused on diesel and aviation fuel, which will expand Australia’s onshore reserves to at least 50 days of supply. Third, $10 million for feasibility studies into new or expanded fuel refining capabilities, co-funded with state and territory governments. The Minimum Stockholding Obligation will also be lifted by around 10 days for every type of fuel, supported by $34.7 million over four years.
For businesses in logistics, transport, agriculture, and manufacturing that have been managing the fuel cost crisis since March, this package represents a longer-term structural commitment rather than immediate relief. The fuel excise cut of 26.3 cents per litre, introduced in late March, remains in place until 30 June with the door left open for extension.
ALSO READ: The complete guide to Australia’s fuel crisis response for businesses
On tax, income cuts already legislated will take effect from 1 July regardless of what the budget announces. The tax rate on income between $18,201 and $45,000 will drop from 16% to 15%, delivering an effective saving of $268 per year for someone on average earnings of $79,000. This applies to employees and is relevant for small business owners thinking about wage competitiveness in the current hiring environment.
The government has also confirmed it will scale back the electric vehicle fringe benefits tax exemption. Currently, employers can avoid paying FBT on EVs under $91,387 purchased through a novated lease. Under changes confirmed by Treasurer Chalmers and Energy Minister Chris Bowen, the incentive will transition to a 25% discount. From April 2027, the full discount will only apply to EVs costing $75,000 or less, with vehicles above that threshold receiving the 25% discount instead. From April 2029, all EVs below the luxury car tax threshold will attract only the 25% discount. The cost of the program had blown out from an initial $90 million to $1.35 billion in 2025-26, and the changes are forecast to save $1.7 billion over four years. For SME owners who have been considering EVs for their fleet through a novated lease arrangement, the window to access the full exemption is narrowing.
The government has also confirmed sweeping NDIS changes, with at least 160,000 people expected to exit the scheme by 2030 as eligibility criteria are tightened. Registration will become mandatory for more NDIS service providers and rules around unscheduled plan reassessments will be tightened. For small businesses delivering NDIS services, these changes represent a significant shift in the landscape and warrant close attention to the detail when it is released on budget night.
The instant asset write-off question
The $20,000 instant asset write-off, which allows small businesses with turnover under $10 million to immediately deduct the full cost of eligible assets rather than depreciating them over time, is currently legislated only until 30 June 2026. If it is not extended or made permanent in this budget, the threshold reverts to $1,000 from 1 July.
The government has not yet officially confirmed what will happen to the write-off in this budget. Reports suggest a permanent extension is under consideration, and the Housing Industry Association, COSBOA, and multiple other industry bodies have been publicly lobbying for exactly that ahead of budget night. COSBOA CEO Skye Cappuccio has called for the threshold to be increased beyond $20,000 and made permanent, describing the current annual extension model as providing insufficient certainty for small businesses making investment decisions.
For SME owners considering a significant equipment, technology, or asset purchase, the safest approach is to act before 30 June if the purchase makes business sense regardless of the write-off outcome, and to watch budget night for confirmation of what happens beyond that date.
What is widely reported but not confirmed
Several measures have been widely reported but have not been officially confirmed by the government as of today. These include changes to the capital gains tax discount, with an inflation-based model reportedly the leading option with grandfathering for assets purchased before budget day; changes to negative gearing, with options including limiting it to new housing or abolishing it for existing properties; a minimum 30% tax rate on trust distributions, which would directly affect many family and small business structures; and an earned income offset of between $200 and $300 for all wage and salary earners.
Dynamic Business has not included any of these as confirmed measures because they are not yet official government announcements. Each of them, if confirmed, would have significant implications for SME owners and their advisers, and the details will matter considerably more than the headlines. We will cover all confirmed announcements on budget night.
The budget lands at a moment of genuine economic stress for many Australian small businesses. The third RBA rate rise of 2026 was announced today, taking the cash rate to 4.35%. Inflation sits at 4.6%. Payday Super arrives on 1 July. And the AML compliance deadline for real estate, legal, and accounting businesses falls on the same date.
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