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

Mao Li/Pexels Since at least the early 1990s, much of regional Australia has felt overlooked by the rest of the country. Our regions have seen themselves as disadvantaged compared to other parts of the nation, ignored 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 specifically and populist politics more generally. So, what has the 2026 federal budget delivered for the regional First Nations communities, industries and country towns that make up about a third 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 of this year’s budget. The government has closed off access to negative gearing on established homes (for purchases made from budget night 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 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, 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 in the regions than in the metropolitan centres. The budget has set aside A$2 billion 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. 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. Will this budget really make housing fairer for more Australians? It’s a good start

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 will have a bigger impact in regional areas, which have a higher proportion of low-income households than Australia’s capital cities. And many farmers will be breathing a sigh of relief, after Tuesday’s budget confirmed farming family trusts would be exempt 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 manage the good years and the bad, while also helping with succession and the sustainability of the farm. But farming and environment g