Treasurer Jim Chalmers handed down ‘resilience and reform’ in the Australian 2026–27 federal Budget on 12 May 2026. “It’s all about getting Australians through the global oil shock and building an economy that works for more people.”
While many in the food and beverage manufacturing sector welcomed the fuel and gas resilience reforms, some said it may have missed the mark on other issues, such as not effectively addressing supply chain issues.
RSM Australia Manufacturing National Leader Louis Quintal was hopeful that this year’s budget would address Australia’s persistent supply chain issues, first made apparent during the pandemic and now evident again with the ongoing conflict in the Middle East.
“While the decisions to increase fuel and gas reserves help, they don’t provide a clear path to lower industrial costs in the face of rising energy costs which are placing manufacturers under significant pressure. Similarly, the focus on stockpiling does little to reshore or diversify Australia’s supply chains, failing to provide a long-term solution to ongoing supply chain pressures and concerns.
“Similarly, we had hoped to see incentives to reduce the ongoing skills shortages through either incentivised training or skilled migration. This is a persistent issue for the sector and one that will cap the growth of Australia’s manufacturing sector without reform. At the same time, there is also little in the way of automation and digitisation to offset ongoing labour shortages,” Quintal said.
“We’ve seen significant investment in Australian manufacturing in recent years with the Made in Australia program; however, it’s clear that this year’s budget is largely a continuation of existing programs with limited new support for SMEs and the broader manufacturing sector.”
AFGC Chief Executive Officer Colm Maguire said measures aimed at incentivising business investment and strengthening skills development were welcome steps towards improving the competitiveness and resilience of Australia’s manufacturing sector.
“While the Budget contains constructive measures to support economic growth and business investment, global volatility remains a significant risk factor that could place upward pressure on prices for manufacturers and ultimately consumers.”
The AFGC said maintaining a stable and competitive operating environment would be essential to helping manufacturers manage future shocks and continue delivering affordable food and grocery products to Australians.
“Industry and government must continue working together to improve productivity, strengthen supply chain resilience and ensure Australia remains an attractive destination for manufacturing investment,” Maguire said.
Freight road funding left behind
Australian Livestock and Rural Transporters Association welcomed the federal Budget’s $10.7 billion fuel reserve and facility, but said the government has failed to match that investment with a serious plan to fix the rural freight roads that keep agricultural supply chains moving.
The Budget includes a $3.2 billion Australian Fuel Security Reserve which, together with increased stockholding obligations, will lift diesel and jet fuel reserves to 50 days, backed by a $7.5 billion Fuel and Fertiliser Security Facility. It also cuts the heavy vehicle road user charge from 32.4 cents per litre to zero for three months from 1 April, alongside a broader temporary fuel excise reduction.
Australian Livestock and Rural Transporters Association National President Gerard Johnson said the fuel measures were the most significant direct relief the industry had seen in years.
“Livestock and rural transport operators run on diesel. It is not a discretionary cost,” Johnson said. “Cutting the road user charge to zero goes straight to one of the largest operating costs our members carry.”
“If diesel does not reach regional operators when and where it is needed, livestock does not move, feed does not move, and the consequences are immediate,” he said. “Regional freight operators must be treated as essential users in any fuel reserve or drawdown arrangements.”
But the road funding picture does not match the scale of the fuel package.
Despite $8.179 billion in road investment in 2026–27 and $38.7 billion over five years, ALRTA said there was still no clear plan to prioritise the livestock routes, aging bridges and saleyard access roads that constrain rural freight every day.
While rail has an important role in national freight, livestock and rural freight cannot simply shift modes. There is no substitute for heavy vehicle access to farms, saleyards, feedlots and processors.
“That makes targeted investment in regional road freight productivity one of the fastest ways to reduce transport costs and ease supply chain pressure,” Johnson said. “Local roads are not minor roads when they are carrying livestock, grain, feed, fertiliser and farm supplies — they are part of the national freight network and need to be funded that way.”
A $2 billion infrastructure slippage in 2026–27, rising to $4.1 billion across three years, compounds the problem as the Middle East conflict affects the availability of key construction materials.
“This Budget puts serious money into fuel security and deserves credit for that,” Johnson said. “The next job is harder: fixing the rural freight roads that keep regional Australia moving.”
Inaction for wine sector
Australian Grape & Wine has expressed disappointment with the federal Budget, with no new funding announced for the sector.
The sector continues to face a structural supply–demand imbalance, compounded by the loss of key export markets, rising input costs and global uncertainty. Australian Grape & Wine has been clear that supply must adjust to market realities, and that work is already underway. However, the scale and speed required cannot be achieved by industry alone.
Lee McLean, Chief Executive of Australian Grape & Wine, said: “We did not ask for a handout. We put forward practical, targeted measures to support an orderly transition, reduce long-term costs, and minimise the impact on regional communities. Once again, the government has chosen not to act.
“Without timely support, this will not be an orderly adjustment. It will mean growers walking away from vineyards they can no longer afford to maintain, leaving environmental risks and communities without the capacity to respond.
“This is not about propping up production. It is about enabling transition. Without targeted support to remove the barriers to exit, redevelopment or diversification, that transition will be slower, more costly, and far more damaging.”