May 2026
Australia’s great delivery challenge
Behind the Budget numbers
What does this month’s Federal Budget mean for consulting firms working in Australia’s built and natural environments?
The 2026 Federal Budget points to a national agenda focused on housing, productivity reform, resilience and sovereign capability.
“This year’s Federal Budget reinforces that Australia’s biggest challenges – housing and infrastructure delivery, workforce mobility, productivity and sovereign capability – are increasingly interconnected,” says Jonathan Cartledge, Consult Australia’s Chief Executive Officer.
“None can be addressed in isolation. Consulting firms have a critical role to play in helping to unlock projects faster, coordinate complexity and remove delivery bottlenecks across the system.”
Infrastructure investment
The headline $12.1 billion infrastructure commitment is significant. This includes an additional $3.8 billion for Victoria’s Suburban Rail Loop, $1.75 billion for upgrades to the national freight rail network, $812.5 million for the next stage of Queensland’s Bruce Highway upgrade and $552 million for Western Australian road upgrades.
The decision to scale back Inland Rail after costs exceeded $45 billion reflects growing scrutiny around project viability, delivery risk and long-term cost certainty. Instructure Partnerships Australia notes that federal infrastructure funding now sits at $58.9 billion over the next four years, down $1.6 billion in a year.
Consult Australia’s Protecting Cost Certainty report argues many infrastructure cost pressures are locked in long before projects reach construction. “As governments continue investing heavily in infrastructure, cost certainty must be built in through clear scope, realistic assumptions and better risk allocation,” Jonathan says.
Consult Australia is not alone in raising concerns around delivery pressure. Australian Constructors Association (ACA) Chief Executive Peter Colacino’s comment on the Budget was direct: “Beneath the headlines, the Budget shows governments are increasingly having to manage rising costs to keep existing projects moving.”
“Industry is converging around a common view,” Jonathan adds. “Consult Australia and ACA will continue to work collaboratively to call for better planning, procurement and project readiness.”
Defence spending
The $887 billion in cumulative defence funding through to 2035–36 includes an additional $14 billion over four years and $53 billion over the decade tied directly to the 2026 National Defence Strategy.
“Defence expansion includes the physical systems that support our growing capability, from bases, logistics hubs and advanced manufacturing facilities through to housing, energy, transport and secure digital infrastructure,” Jonathan notes.
“The scale of investment will shape demand across engineering, planning, advisory and infrastructure delivery for years to come. We continue to work closely with the Department of Defence, and through initiatives such as CollabX, to help connect capability, industry expertise and delivery across the sector.”
Housing delivery
Housing is central to the Albanese Government’s economic and productivity agenda, with the Budget combining major investment in enabling infrastructure alongside significant changes to property tax settings.
An additional $2 billion has been committed to power, water and road connections to support new housing developments, bringing total federal investment to $6.3 billion, although still below the $16 billion required, according to the Urban Development Institute of Australia.
Treasury estimates changes to negative gearing and capital gains tax settings could see around 75,000 homes shift from investors to owner-occupiers over the next decade. Industry response has been cautious. The Property Council welcomed the decision to carve out new housing and build-to-rent developments.
The Budget’s ambitious housing delivery agenda makes procurement reform more important, Jonathan notes. “We need to start treating procurement as a delivery strategy, rather than an administrative process,”
The Australian Institute of Architects has echoed these statements, observing that the Budget’s ambitious housing delivery agenda makes procurement reform more important. “If governments want faster, better and more resilient outcomes, procurement must value design expertise, fair fees, early engagement, collaboration and whole-of-life performance.”
Productivity measures
Consult Australia, alongside other industry bodies across the built environment, has broadly welcomed the focus on productivity, especially measures to reduce friction across the infrastructure and construction pipeline.
The Budget allocated $42.7 million over four years to provide free public access to Standards Australia standards referenced in legislation, while also reaffirming support for a national occupational licensing scheme for engineers. (Read our separate article in Consulting Matters).
Consult Australia joins Engineers Australia in welcoming $85.2 million to accelerate skills assessments for migrant trades workers and support faster occupational licensing, noting migrants make up more than two thirds of Australia’s engineering workforce.
Environment
The Budget commits $500 million to Environment Protection and Biodiversity Conservation (EPBC) Act reforms, including $105.9 million over four years to simplify environmental approvals using artificial intelligence.
An additional $17 million will support the delivery of Australia’s circular economy agenda, which the Green Building Council of Australia said would help reduce waste, improve material efficiency and strengthen sustainable supply chains.
Jonathan Cartledge, who chairs the Infrastructure Net Zero initiative, notes industry collaboration is “mission critical” as governments and the built environment sector worked to translate circular economy and net zero ambitions into practical delivery settings.
“Through initiatives like Infrastructure Net Zero, we are already seeing industry, government and researchers working together to build clearer definitions, stronger measurement frameworks and more consistent approaches to low-carbon infrastructure delivery.”
Small business benefits
The Budget includes several measures that Consult Australia has championed through its alliance with the Council of Small Business Organisations Australia (COSBOA).
This including making the $20,000 Instant Asset Write-Off permanent, committing to reduce regulatory compliance costs by $10.2 billion annually and initiating a Productivity Commission inquiry into regulatory barriers impacting business dynamism.
“The common thread running through this Budget is capability – and this places consulting expertise at the centre of some of Australia’s biggest delivery and productivity challenges.”