Amid higher inflation, rising unemployment, and ongoing global uncertainty, the 2026 Federal Budget forecasts slower economic growth over the coming year. However, a number of measures are aimed at improving productivity and easing cost pressures across construction and business more broadly, with particular relevance to the building and manufacturing sectors.
Through their AGWA membership, businesses have already had access to the full glass and glazing set of Australian standards, however last night's announcement to make reference standards available free of charge to industry is a positive step to support and enforce broader industry compliance and cost reduction.
The Budget delivers a strong pipeline of housing and infrastructure investment, supporting demand for building products, including windows and glazing. The Budget reinforces the transition to energy-efficient, electrified homes, but does not include direct incentives for building fabric upgrades, including windows. This creates a policy gap at the federal level, increasing reliance on state-based schemes and highlighting the need for national recognition of glazing performance.
Planning and zoning reforms to accelerate housing supply, reduce development delays and improved productivity, largely delivered through incentives and intergovernmental agreements (rather than direct federal zoning control), are intended to accelerate construction. In addition, changes to skills recognition and the permanent migration points test are designed to attract better educated, higher-skilled migrant workers to address ongoing labour shortages.
The Budget also includes a range of tax measures. These include a reduction in the lowest income tax rate from 16% to 15%, changes to negative gearing and capital gains tax arrangements, and a minimum 30% tax rate on discretionary trust distributions from 2028-29. There is a $250 annual tax offset for income derived from work for next year, alongside a $1,000 instant tax deduction without receipts from July 2027.
For small businesses with turnover under $10 million, the $20,000 instant asset write-off will be made permanent from 1 July 2026, supported by enhanced tax incentives for R&D investment and new monthly tax instalment options. Additional funding has been committed to housing-enabling infrastructure, fuel security, and a temporary cut to fuel excise and heavy road user charges, all of which may have downstream impacts on construction costs and project delivery.
While the Budget supports construction activity and industry productivity, and reinforces the transition to energy-efficient homes, it does not yet fully leverage the role of building envelope performance. AGWA will continue to advocate closing this policy gap by incorporating glazing and window performance into future energy efficiency and housing initiatives, noting the potential scope, impact, applicability, and timing of Budget announcements will become clearer over time.