Tax reform, AI accountability, and workforce investment headline a Budget with serious implications for Australian employers
Australia's businesses are bracing for one of the most significant tax and productivity reform packages in recent years, as Treasurer Jim Chalmers prepares to hand down the 2026–27 Federal Budget on 12 May – with wide-ranging consequences for HR leaders, SME operators, and employers across every sector.
From changes to capital gains tax and negative gearing, to expanded R&D incentives and a recalibrated electric vehicle fringe benefits exemption, the Budget is being framed around intergenerational fairness and economic resilience.
But for HR, the stakes are more immediate: workforce costs, compliance burdens, and the pace of technology adoption are all in play.
Law firm Mallesons has flagged that the government's productivity package is expected to include a material expansion of the Research and Development Tax Incentive (RDTI), with the existing $150 million cap on eligible R&D expenditure set to be lifted – potentially to between $250 million and $300 million.
This would be partially offset by raising the minimum claim threshold from $20,000 to $150,000, effectively redirecting the incentive toward high-impact activity. For employers investing in R&D talent, particularly in the start-up and innovation sectors, the changes could provide an immediate and meaningful financial...
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