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Last night saw the Federal Government deliver the 2025-26 Budget, with 'cost-of-living relief' at the top of Treasurer Jim Chalmers' agenda.
From an international supply chain, logistics and border clearance perspective, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have made preliminary observations identifying the following extracts from the Budget and supporting papers.
TRADE PRESSURE AND OUTLOOK
The Budget acknowledges the rising trend of tariffs and trade restrictions, noting that, according to the IMF, such measures have increased sixfold over the past 15 years. Australia is also expected to feel indirect impacts when tariffs are imposed on the exports of countries that rely on Australian raw materials as inputs. These indirect effects can be more significant than the direct impact, given Australia's role as a key supplier of raw materials for global manufacturing. Despite global challenges, import volumes are projected to grow. Import growth is expected to moderate to 2.5% in 2024–25 due to a slowdown in service imports, while goods imports will be supported by infrastructure projects. Growth is forecasted at 4% in 2025–26 and 2.5% in 2026–27. The Budget also maintains expectations of a Free Trade Agreement (FTA) with the EU, though customs duty estimates indicate that any financial impact will not be felt until 2027–28. The 2025–26 Budget continues to factor in provisions for the Australia-EU FTA, while no other FTAs currently under negotiation are expected to materially impact revenue over the forward estimates. DEPARTMENT OF HOME AFFAIRS
$9.6 million over four years from 2025–26 to undertake an approach to market to renew Australia's primary sea cargo screening technology to detect and prevent the importation of illicit goods and sustain existing screening technology.
AVIATION AND MARITIME SECURITY CARDS
The implementation of a single issuing body for aviation and maritime security identification cards will be delayed by one year until 1 July 2026 to adjust the implementation approach in consultation with industry to minimise service delivery risk.
ILLICIT TOBACCO COMPLIANCE AND ENFORCEMENT PACKAGE
$156.7 million to strengthen compliance and enforcement action in relation to the trade of illicit tobacco and nicotine products. Funding includes: $49.4 million over two years from 2025–26 to increase the capacity of the Australian Federal Police-led Criminal Assets Confiscation Taskforce to investigate and prosecute serious and organised crime groups dealing in illicit tobacco and nicotine products. This expands on the $188.5 million investment from 2023–24 for Australian Border Force to deliver a coordinated multi-agency, multi-jurisdictional compliance response to illicit tobacco trade. IMPORTS FROM RUSSIA AND BELARUS The measure imposing additional tariffs on goods that are the produce or manufacture of Russia or Belarus will be extended by a further two years, to 24 October 2027. The measure continues to deny Russia and Belarus access to the most favoured nation status through the application of an additional 35 per cent tariff on goods that are the produce or manufacture of Russia or Belarus and had not left for direct shipment to Australia from a place of manufacture or warehouse before 25 April 2022.
EXCISE AND EXCISE EQUIVALENT CUSTOMS DUTY The indexation on draught beer excise and excise equivalent customs duty rates will be paused for a two-year period, from August 2025. Under this measure biannual indexation of draught beer excise and excise equivalent customs duty rates due to occur in August 2025, February 2026, August 2026, and February 2027 will not occur. Biannual indexation will then recommence from August 2027.
AUSTRALIAN TAXATION OFFICE $999.0 million to extend and expand tax compliance activities. Funding includes: $75.7 million to extend and expand the Personal Income Tax Compliance Program. This will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance. $50.0 million to extend the Tax Integrity Program. This will enable the ATO to continue its engagement program to ensure timely payment of tax and superannuation liabilities by medium and large businesses and wealthy groups.
WESTERN SYDNEY AIRPORT $38.2 million over four years from 2025–26 (and $2.4 million per year ongoing) to the Australian Federal Police for the fit-out and sustainment of shared Commonwealth facilities at Western Sydney International (Nancy-Bird Walton) Airport to support federal policing required to enable airport operations.
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