Australian Federal Budget 2025-26: What it means for resources professionals

On the eve of an election being called, the mere delivery of Treasurer Jim Chalmers' 2025-26 Federal Budget came as something of a surprise to close Canberra observers. But what ought to come as no surprise is the central role of resources in the Australian economy, reflected in both the budgetary forecasts and key policy commitments from government.

Here’s what’s worth knowing about this year’s Federal Budget:

• Green metals and manufacturing: Funding for the Government’s flagship industrial policy continues, although most of what is included in the 2025-26 budget reflects funding already committed to existing programs. This includes well-publicised critical minerals production tax incentives and sector allocations from a $1.7 billion innovation fund, which is offering $750 million for green metals and $500 million for clean energy manufacturing. The Government has committed $2 billion for new green aluminium production credits, which will be available to smelters that switch to renewable energy, and a further $1 billion for steel makers. These credits will be available from the 2028-29 financial year. Funding has also been allocated to support the Whyalla steelworks during its current administration, in the order of approximately $220 million.

• Exploration: After an eight-year lifespan, the Government has resisted calls to extend and expand the Junior Mining Exploration Incentive, which generated $400 million in greenfield exploration at a cost of approximately $180 million according to industry analysis.

• Education: A 20 per cent cut to outstanding university student loan balances was the headline measure in last night’s budget, but the Government also committed funding to expand free TAFE places and progress reforms to deliver a new funding and governance model for universities. The sustainability and adequacy of university programs has been a key concern for stakeholders across the resources sector, as we look to both retain and generate new (often niche) expertise across the minerals value chain. A new Australian Tertiary Education Commission will provide advice on tertiary harmonisation, pricing and performance, as part of the Government’s response to the Universities Accord calling for improved governance and funding mechanisms. The Government has resisted calls to expand the scope of funding support for students undertaking work placements, which is currently available for nursing, teaching and social work students only.

• First Nations economic empowerment: The Government will introduce a new business mentoring and coaching program to support First Nations businesswomen and entrepreneurs, as part of a broader package that includes reforms to support Indigenous Business Australia and progress Closing the Gap priorities.

• Trades and professional recognition: The Government has funded measures to introduce a national licensing scheme for electricians, which will form the basis for other national recognition of other trades.

• Global trade: A new ‘buy local’ campaign will seek to bolster domestic industries such as aluminium and steel, impacted by the many disruptions to global trade and consumption playing out at present.

On the economic outlook, figures reiterate the fundamental role our sector plays in delivering economic prosperity for the broader community. It also shows just how much of an impact disruption to trade, and especially commodity exports, can have on the budget bottom line:

• Exports: Revenue from mineral commodity exports are expected to remain subdued, reflecting weak conditions in the Chinese property sector. Overall export revenue will drop by 1 per cent in 2024-25, before growing by 2.5 per cent in 2025-26 and 2026-27. Treasury forecasts the iron ore spot price will drop to US $60/tonne, the metallurgical coal price to US$140/tonne and the thermal coal price to US$70/tonne

• Investment: Mining industry investment is forecast to drop from $7.8 billion in 2023-24 to -$3.5 billion in 2024-25 before lifting slightly to $2.5 billion in 2025-26 and $3 billion in 2026-27. The sector continues to invest more in Australia than all other industries combined, with 2025-26 and 2026-27 forecasts assuming industry will invest about three times as much its non—mining counterparts. 
   
• GDP: Overall GDP is expected to grow at between 2.25 and 2.45 per cent over the next three years, compared to a global growth rate of 3.25 per cent. The budget nominates the direct and indirect effects of global trade tensions and a looming ‘tariff war’ as the key risks to GDP growth.