The 2026–27 Federal Budget (Budget) includes targeted measures in skilled migration, fuel security and tax settings that will support small businesses.

While these are positive steps for the Capricorn Community, they come at a time of ongoing workforce shortages, rising costs and continued pressure on business.

As the Budget is a series of individual Bills that will need to be authorised by the House of Representatives and the Senate before spending occurs, the final version may be different to what has been handed down. 

Skilled migration and workforce shortages

The ongoing skills shortage remains one of the biggest challenges facing the automotive aftermarket. Capricorn Members consistently report that difficulty finding qualified technicians is affecting workflow, productivity, customer wait times and, in some cases, the wellbeing of business owners and their teams.

In January Capricorn made a submission to the Joint Standing Committee on Migration calling for faster, more targeted skilled migration pathways for automotive trades and specialist technicians.

Capricorn welcomes the investment in this area which will target improving the skilled migration pathway, streamlining qualification recognition, and cutting the time taken to enter the workforce by up to six months.

We look forward to seeing the impact of this investment and additional improvements recommended by the Joint Standing Committee on Migration following its Inquiry. 

Small business tax settings

Changes being introduced include the simplification of tax returns and improved investment certainty for small businesses with the $20,000 Instant Asset Write-Off being made permanent.

For Capricorn Members, remaining competitive requires ongoing investment in tools, workshop equipment and diagnostic technology, and measures that support this are welcomed. 

Additionally, the loss carry-back introduced in the Budget provides a way for some businesses to generate cash flow by offsetting a tax loss against a previous year’s tax paid on profit.

Fuel security

Fuel security is critically important for the automotive industry, freight operators and regional communities. Reliable fuel resources ensure supply chains can keep the Australian economy moving. 

The Budget outline expanding Australia’s fuel stockholding by an additional 10 days’ supply for diesel and petrol, alongside other measure including improvements to domestic fuel story and supply chain resilience.

Capricorn has recently supported calls to improve Australia’s in-country fuel security and believes this will provide some insulation from future disruptions. 

Trust and Capital Gains Tax changes

The use of a discretionary trust is common for Capricorn Members due to commercial and succession planning reasons. 

The introduction of a 30% minimum tax from 2028 will erode confidence. While rollover relief is in place for businesses that wish to restructure, the time and financial investment required to do so will be viewed as an additional administrative burden for already time-constrained business owners.

The introduction of a 30% tax on capital gains from 1 July 2027 may disrupt longer term plans, including retirement, for small business owners. 

Small businesses are vital to Australian economy, providing jobs and investment in local communities. It’s important to ensure future reforms seek to improve conditions for small business owners, support measured risk taking, and ensure local communities can thrive.

Apprenticeships and training pipeline

The Budget highlighted a change to the Apprenticeships Incentive System from 1 January 2027. The change will prioritise small and medium employers, which will be welcomed if the system supports the automotive sector.  

In January 2026, reforms focused on prioritising sectors like green energy and housing, not automotive.

Any reduction in support for automotive businesses training the next generation of technicians could aggravate the already dire skills shortage in the sector. 

There needs to be a sufficient pipeline of qualified technicians in the automotive aftermarket to service vehicles on the road and keep the broader economy moving. This can only happen when business owners feel supported to take on apprentices.