This year’s Budget had a heavy emphasis on productivity, enabling innovation and the clean energy transition. And while some major infrastructure projects have been reprioritised, the government has committed billions to urban connectivity, sovereign manufacturing capabilities and ensuring our energy networks are future-fit.
Treasurer Jim Chalmers called the 2026-27 Federal Budget, his fifth, “the most important and ambitious … in decades”.
Engineers Australia welcomes the Budget’s initiatives to bolster productivity, lift housing supply and slash red tape, saying engineers will be central to delivering on the nation’s economic, technological and industrial ambitions.
“Engineering capability sits at the heart of Australia’s productivity, resilience and future prosperity,” Engineers Australia Chief Engineer Katherine Richards AM HonFIEAust CPEng EngExec said.
“The initiatives to cut red tape, boost housing construction, support infrastructure delivery and grow sovereign capability are welcome, but we will need the engineering workforce to get us there.”
Let’s explore how Australian engineers are impacted by funding announcements.
In a significant hit to infrastructure funding, the Inland Rail project – designed to alleviate pressure on road freight via 1600 km of rail connecting Melbourne to Brisbane by way of Albury, Narromine and Narrabri – has been curtailed.
As announced last week, the rail line, originally envisioned as a single continuous route, will now stop at Parkes instead of continuing all the way to Queensland. A section from Narrabri in NSW to North Star, near the Queensland border, had already been completed.
Catherine King MP, Minister for Infrastructure, Transport, Regional Development and Local Government, last week pointed to the latest cost estimate of the entire project of $45 billion – up from $16.4 billion in 2020 and $31.4 billion in 2022 – as a key factor in the decision to “realign” the future of the project.
Read about the big-budget projects blowing out on costs.
Regional connectivity may have been impacted, but extra funding has been allocated to a major urban rail project, namely Victoria’s Suburban Rail Loop (SRL).
The 90-km rail line linking the city’s middle suburbs has been allocated $3.8 billion over four years from 2026–27 in additional funding.
The Federal Government’s contribution now totals $6 billion, falling short of the Victorian Government’s hope that the former would contribute one-third of the project’s total $34.5 billion cost.
Elsewhere in the Budget, the government has pledged $8.6 billion over 11 years towards rail projects, including:
- $1.8 billion over six years from 2026–27 in equity for the Australian Rail Track Corporation to invest in its interstate rail network
- $1.7 billion over nine years from 2026–27 for new Infrastructure Investment Program projects, including:
- $812.5 million for the Bruce Highway – Gateway Motorway to Dohles Rocks Road (Stage 2) upgrade in Queensland
- $552.0 million for Anketell Road Upgrades, Westport (Stage 1A and 1B) in Western Australia
- $76.4 million for the Melton Line Electrification and $50.0 million for the Western Freeway Upgrade (Melton to Caroline Springs) in Victoria
- $659.6 million over three years from 2025–26 for the High Speed Rail Authority to undertake development works for the Newcastle to Sydney high-speed rail (HSR) project. If it eventuates, HSR would cut travel time from Sydney to the Central Coast to just 30 minutes.
These and other measures are designed to contribute towards the government’s rolling infrastructure pipeline of more than $120 billion over 10 years.
Read about the innovative ground freezing technique being used during construction on SRL East.
A new body for consumer energy has been announced, focused on the integration of rooftop solar and home batteries into the energy network.
The establishment of the National Technical Regulator forms part of a $97.2 million initiative across five years from 2025-26 to implement the government’s National Consumer Energy Resources Roadmap.
Other energy-related initiatives announced in the Budget designed to improve Australia’s embrace of the energy transition include:
- $15.9 million over four years from 2026–27 to uplift the Australian Energy Regulator to enhance network regulation, the Energy Made Easy website, implementation of the recommendations of the National Electricity Market wholesale market settings review, and compliance and enforcement activities
- Reprofiling $15.4 million over four years from 2025–26 to expand the scope of the Dealership and Repairer Initiative for Vehicle Electrification Nationally program and extend the program by an additional year
- $14.6 million over five years from 2025–26 to maintain proportionate battery system inspections under the Cheaper Home Batteries program
Engineers Australia welcomes the strong emphasis on strengthening the country’s skilled workforce.
Measures in the Budget include:
- $35.2 million for Jobs and Skills Australia to continue providing advice on Australia’s labour market and skills and training needs
- $5.6 million over three years from 2026–27 for Trades Recognition Australia to deliver a new skills assessment program for onshore visa holders
There was modest investment in STEM education, which was one of the priorities raised by Engineers Australia representatives at the Parliamentary Friends of Engineering event this year.
Read more about the outcomes for engineers from that event.
Engineers Australia welcomes the government’s decision to have free public access to standards incorporated into legislation. Engineers Australia has consistently argued that paywalled standards undermine compliance, increase project risk and disproportionately impact small and medium businesses.
“Initiatives to lower industry costs, such as free access to standards in legislation, and occupational licensing are key enablers,” Richards said.
“We welcome the opportunity to continue to work with the government on important productivity initiatives, such as developing nationally consistent registration so engineers can register once and practise anywhere.”
Read why standards are a critical risk-management tool for engineers.
The government has pledged to improve its support of business research and development (R&D) by increasing the offset for core R&D expenditure by around 25 to 50 per cent, through a 4.5 percentage point increase in core R&D offset rates.
There was $387.4 million in additional funding for CSIRO, alongside a $21.7 million commitment to enable the Australian Space Agency to continue to deliver its core regulatory and policy functions.
In the field of manufacturing, one of the highlights from the Budget was $222.6 million in additional funding for the Whyalla Steelworks. The facility’s blast furnace has been offline since early April.
Explore the full Federal Budget digest from Engineers Australia.
As a civil engineer who worked on the Snowy Scheme when I first came to Australia and then joined SMEC for whom I worked on many projects before retiring from consulting work in 2016 I have been very disappointed, indeed disgusted, at the way the civil engineering industry has gone in Australia.
We brought in Snowy 1 on time and within budget but since then and the takeover of the whole process by accountants and lawyers , and the introduction of quality assurance instead of independent checking the industry has gone to pot.
Snowy 2 is a classic example of how not to initiate and run a major civil project. Announced politically before there was even any form of feasibility study , site investigation and design study it remains to be seen how it will work with the long waterways. Certainly not like the traditional pumped storage project with fast response times to stabilise the electricity grid.
Then inland rail. Where were the studies to investigate the whole project, produce a business case and prove that the project was both necessary and economic?
The modern concept of packaging the whole of a major project to one combined consortium for investigation, design and implementation without adequate checks and balances along the way are simply asking for delays in time and vast cost over-runs.
The proof of the pudding is in the eating. We used to have major projects brought in essentially on time and budget when a number of independent entities were responsible for specific inputs. Today a single consortia obviously wants to have cost and time increases as it increases their bottom line. Bloody obvious it does not work in the favour of the general populous. It will not because the system is now designed to make more money.
Only one of the many projects I worked on around the world was not achieved on time and budget and that was because we had a one in 25 year flood when the diversion and protection works had only been designed for a one in te year event.
Thanks Colin, many experienced engineers would agree with you. Honest Professional Engineers have produced successful projects on time and sound budget. However interference by other professionals and agencies with scant project experience keep throwing “spanners in the works”.
Now we have another factor in AI inputs that lack the proper relevant context for the unique combinations of factors that often arise in the course of innovative projects or applications.
Experience teaches you to search out possible unintended consequences in timely rigour. Human learning is mostly an analogue process in which context, connections and direction are essential. Digital data systems have yet to master the ability to glean insights that numbers and narrative alone cannot show.