Federal Budget 2025–26: A Step Forward, But Key Opportunities Missed for Automotive Industry

The 2025–26 Federal Budget has landed with a clear focus on easing cost-of-living pressures ahead of the upcoming Federal Election. With priorities like increased Medicare funding, cheaper prescription drugs, and infrastructure investment, the Government’s agenda is largely locked in.

In its Pre-Budget Submission, the Motor Trades Association of Australia (MTAA) highlighted key industry priorities—skills and training, automotive tax reform, business support, and franchising. These remain essential to driving sector-wide efficiency and stronger national economic outcomes.

What We Welcome

Several positive measures have emerged from the Budget:

- $7.1 million over two years for the ACCC to investigate compliance and issues within the expanded Franchising Code of Conduct

- Expansion of the Franchising Code to fully cover all motor dealerships

- $4.7 million for ASQA to crack down on fraud in the vocational education and training (VET) sector

- $77.8 million over four years to extend the interim Australian Apprenticeship Incentive System until December 2025

- $2 million for small business training on the new Franchising Code of Conduct

- Funding to review the New Vehicle Efficiency Standards, shifting compliance from point of entry to point of sale.

These reflect ongoing advocacy from MTAA and offer welcome support for small business compliance, franchise integrity, and VET quality.

Where We Need More

Some critical areas were overlooked or underfunded:

- No new funding for ROVER, the IT system supporting the Road Vehicle Standards (RVS) legislation. While funds from the last budget remain, additional investment is essential to modernise the platform and reduce compliance burdens.

What Missed the Mark

Despite progress in some areas, several key measures for the automotive industry were absent:

- $150 energy rebate for small businesses falls far short for energy-intensive workshops

- No progress on removing the Luxury Car Tax, which remains outdated and inequitable

- No national school-to-industry pathway, despite industry leadership and need

- No increase in the hiring levy to support apprenticeships

- No direct EV incentives for workshop tooling, training, and infrastructure

- No extension of the $50,000 instant asset write-off - vital for EV transition investments

- No continuation of FBT exemptions for plug-in hybrid vehicles.

Our Continued Advocacy

We also welcome the Government’s financial assistance to the skills regulator to crack down on fraud in the VET sector. As the state’s largest independent not-for-profit training provider, MTA NSW strongly supports a transparent and resilient vocational education and training system.

MTA NSW will continue to advocate for a fair VET system where students are at the heart of the system.

We are also urging the Government to commit to extending the instant asset write-off for small businesses. This measure is vital to help small operators invest in the future - particularly as the industry transitions to electric vehicles and modern fleet infrastructure.

What’s Next

With a Federal election just weeks away, MTA NSW will continue to push for stronger support - targeted investment, reduced red tape, and meaningful incentives to drive growth, innovation, and long-term sustainability across the automotive industry.

As more details come to light, we’ll provide further updates to help members stay informed and prepared.