The 2025-26 Federal Budget was delivered overnight, and it includes long-awaited support for Australian motorists and what remains of the automotive industry.
Delivered less than two months out from an election, the budget includes an allotted $15.6 billion to be spent across the next 10 financial years on transport projects, most of which are aimed at making local roads safer.
Across the next three years alone, the government’s investment in local roads has increased by 2.5 per cent, which has been welcomed by the Australian Automobile Association (AAA).
“The AAA is pleased to see a 10 per cent increase in the Roads to Recovery Program to $3.7 billion over the forward estimates, as well as a $40 million increase in the Black Spot Program to $600 million,” AAA managing director Michael Bradley said in a media statement.
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“But without any evidence about the road safety implications of the major projects being announced, Australians can’t judge whether politicians are funding roads to save lives or simply win votes in marginal electorates.
“With road deaths rising in each of the past four years, the AAA calls on politicians to explain the context of their road proposals by producing relevant safety ratings so Australians can make their own judgements about funding motives.”
However, the AAA continued its calls for existing taxes (such as import tax and the Luxury Car Tax) to be scrapped, due to the impact they have on the price of new vehicles.
“These legacy taxes have outlived their original purpose and today are adding to the cost of cars being bought by Australian families and fleets,’’ Mr Bradley said.
“Abolishing these protectionist measures must form part of a broader reform of tax arrangements, which should seek to ensure all Australians pay their fair share toward the upkeep of the road system and spread the cost burden more evenly across the community.”
While the Federal Government has reportedly flagged interest in adopting an Australia-wide road user charge for electric vehicles (EVs) to recoup lost funds from the fuel excise, there was no mention of this in the latest budget.
“It is disappointing that Australians heard nothing tonight about the Government’s plan for a more affordable, sustainable, and equitable system for paying for our roads,’’ Mr Bradley said.
The AAA wasn’t the only peak body to give its thoughts on the budget, with the Australian Automotive Dealer Association (AADA) also welcoming a number of announcements previously flagged.
This included an extension of protections laid out in the Unfair Contract Terms and Unfair Trading Practice to automotive dealerships, as well as a two-year, $7.1 million investment for the Australian Competition and Consumer Commission (ACCC) to better enforce the Franchising Code of Conduct, a new version of which comes into effect on April 1.
“Tonight’s budget measures to extend protections from Unfair Trading Practices and Unfair Contract Terms to all automotive franchised new car and truck dealers will go some way to address the power imbalance between dealers and vehicle manufacturers,” said AADA CEO James Voortman.
Like the AAA however, the AADA criticised the budget for being “another reminder of the continuing impost on Australia drivers through automotive taxes such as the Luxury Car Tax and Passenger Vehicle Tariff, the latter of which applies to vehicles imported from nations not included in the Free Trade Agreement”.
“We consider these to be outdated taxes, which are a relic from an era when Australia manufactured vehicles here,” Mr Voortman added.
“Particularly the Luxury Car Tax which often applies to more efficient vehicles and applies to optional features which discourage consumer uptake of safety features.”
Last week, the Australian Government announced it’s prioritising work for vehicles’ emissions under the New Vehicle Efficiency Standard (NVES) to be counted at the point of sale rather than when they’re imported, with a review due in 2026.
This means instead of carmakers forcing dealers to stockpile lower-emissions vehicles which may not sell in great volumes, they can continue to sell vehicles based on consumer demand – resulting in more predictable costs for franchises.
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