May 2026 Federal Budget response

May 2026: Federal Budget response

The government has announced some important reforms to address intergenerational inequality, but there is nothing new for legal assistance providers.

This year’s budget focussed on much needed structural reform of the tax system to reduce intergenerational inequality over the long term. Other welcome measures included additional investment in the Child Support Agency to reduce systems abuse against victim-survivors of domestic and family violence and follow through on funding to support Closing the Gap outcomes and the National Aboriginal and Torres Strait Islander Plan to End Family Domestic and Sexual Violence, including for Aboriginal Community-Controlled Organisations.

Disappointingly, however, it included very little direct support for the people doing it toughest in our communities. People with disability are devastated at the confirmation that National Disability Insurance Scheme (NDIS) funding will be slashed to improve the budget’s bottom line. Similarly, we saw no increases to social security payments, including the Remote Area Allowance, which would have provided much needed relief for people in regional and remote communities experiencing the worst impact of ongoing fuel shortages.

The budget also delivers little for frontline services, including community legal centres. In the face of cost-of-living increases, which drive up demand for legal help, static funding leaves our sector going backwards and will mean more people going without the legal help they need. One bright spot is increased funding for frontline Aboriginal Community Controlled Organisations to help women and children impacted by violence. We would expect Family Violence Prevention & Legal Services to benefit from this initiative.

Here, Community Legal Centres Australia provides an overview of features of this week’s Federal Budget most relevant to our sector.

Community legal sector funding

The budget confirms that payments to Legal Assistance Providers via the National Access to Justice Partnership Agreement are unchanged over the forward estimates. The Community Legal Services Program funding – which supports the national peak and a number of national community legal centres – remains largely the same, with news that funding for the Environmental Defenders Office will now be delivered through this stream. Funding for legal support services for victim-survivors of historic child sexual abuse engaging with the Commonwealth Redress Scheme will increase to $25 million in 2026-27 (up from $14 million in 2025-6) before dropping back to $8 million for the final years of the scheme (to 2029-30). The bump is related to efforts to manage the backlog of claims before the scheme is scheduled to expire.

Supplementary NDIS appeals funding will be extended for 2 years at a cost of $14.7 million, and the government will also invest $1.7 billion over 5 years (from 2025-26) to support people with disability and improve the quality of supports the NDIS delivers. However, these measures are grossly overshadowed by the $37.8 billion in savings that reforms to the scheme will deliver to the Federal Government over the next 4 years.

Other Attorney-General’s Department measures

There were several other portfolio measures – good and bad – likely to be of interest to the sector.

Family Relationships Services funding has been extended for 2 years. This is especially welcome given the program was considered very vulnerable two months back. There has been a slight drop in annual program funding from $285 million in 2025-26 to $275 million in 2026-27. We are not yet sure if this reflects the defunding of the national Family Law Pathways Network program, which does not have its own budget line item. Defunding of the Pathways Network would be a loss to communities, and we are seeking further detail.

There will be an extra $3.9 million in 2026-27 for elder abuse measures including support for Elder Abuse Action Australia. This is welcome, however some of this new spend is being funded through savings in the Attorney-General’s and Defence departments.

$0.4 million will go to the National Office for Child Safety for a range of projects, including the implementation of the National Standards for Working With Children Checks.

The Australian Law Reform Commission will receive an extra $10.8 million over 4 years. However, no dedicated funding has been committed to implement the recommendations from its inquiry into Justice Responses to Sexual Violence.

Less welcome, is the $9.3 million cut from the Australia Human Rights Commission’s operating budget in 2026-27; and the $8.2 million reduction in funding to the National Anti-Corruption Commission.

There has been a modest increase in funding for efforts to combat child sexual abuse. Of the extra $12.1 million in 2026-27, $8.5 million will flow to the Attorney-General’s Department to maintain support services for victims and survivors of child sexual abuse. However, this will be partly funded via savings from the National Indigenous Australians Agency.

The remaining measures are less immediately relevant to our work, including additional funding for several departments to participate in international legal actions, $50.4 million in 2026-27 to investigate and support the prosecution of alleged war crimes committed by Australian Defence Forces in Afghanistan, $37.3 million over 2 years to the Office of the Director of Public Prosecutions to strengthen capacity, $28.0 million over 4 years for law enforcement and national security data sharing with the US, and $14.3 million over 4 years to continue the Commonwealth Fraud Prevention Centre.

National Disability Insurance Scheme

As announced by Minister Butler on 22 April, the budget confirmed major reforms to the NDIS that will save the Federal Government $37.8 billion over four years. On budget night, the disability community once again criticised the government’s decision to deliver 60% of budget savings – via its single biggest savings measure – by gutting vital supports for people with disability.

In response to the measure on budget night, Queensland Advocacy for Inclusion stated:

𝗬𝗼𝘂 𝗱𝗼𝗻‘𝘁 𝘀𝗲𝗰𝘂𝗿𝗲 𝗮 𝘀𝗮𝗳𝗲𝘁𝘆 𝗻𝗲𝘁 𝗯𝘆 𝗰𝘂𝘁𝘁𝗶𝗻𝗴 𝗵𝗼𝗹𝗲𝘀 𝗶𝗻 𝗶𝘁.

160,000 disabled Australians will lose their NDIS funding, and not because their needs changed. The Minister owes those 160,000 people an explanation…

𝗢𝗻 𝗰𝘂𝘁𝘀 𝘁𝗼 𝘁𝗵𝗲 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗽𝗹𝗮𝗻𝘀

A $5,000 cut to an average plan is not a line on a spreadsheet. It is the difference between leaving the house once a day and leaving the house once a week. Fewer hours of care. More time alone.

For more details, on the NDIS reforms and their impacts see:

People With Disability Australia

Women With Disability Australia: Federal Budget is a devastating blow for women with disabilities

First Nations justice

Our Ways – Strong Ways – Our Voices package – family violence funding package

First announced in February 2026, First National Advocates Against Violence (FNAAFV) has warmly welcomed new funding of $218.3 million over 5 years (from 2025-26) to implement Our Ways – Strong Ways – Our Voices, the new 10-year National Aboriginal and Torres Strait Islander Plan to End Family, Domestic, and Sexual Violence.

Of this, $167.6 million in Department of Social Security funding will be made available to up to 40 Aboriginal Community Controlled Organisations that deliver culturally appropriate frontline services to Aboriginal women and children experiencing domestic and family violence in regional and remote communities. $32.5 million will also go to extending the Leaving Violence Program Regional Trials in 2026-27.

We expect that this funding will be open to Family Violence Prevention & Legal Services and Aboriginal community-controlled community legal centres and, along with FNAAFV, will follow its implementation closely.

Closing the Gap

The budget includes a Closing the Gap package of $793.7 million over 5 years, with most of the measures announced before the budget. Headline measures include:

$299 million to expand the Remote Jobs and Economic Development program.

$144.1 million for infrastructure upgrades for Aboriginal Community Controlled Health Organisations.

$97.4 million for remote health services, including renal dialysis and birthing on Country.

$60.1 million to improve food affordability in remote communities through the Store Efficiency and Resilience Program and the Low-Cost Essentials Subsidy Scheme.

$48.3 million for Aboriginal Hostels Limited to provide short-term accommodation services.

$18.9 million over four years for 13YARN, a 24/7 crisis support line for Aboriginal or Torres Strait Islander people.

Gender-based violence

Beyond the new funding for Aboriginal Community-Controlled Organisations to implement Our Ways – Strong Ways – Our Voices, the budget was underwhelming in its response to gender-based violence.

Funding for Sexual Assault Legal Services will continue as expected until 2027-28, with slight decreases over the next 2 years: down from $10.2m down to $9.4m in 2025-26 and then from $5.4m to $4.8m in 2027-28. The implementation of this program has been inadequate, and the government needs to commit to its longer-term future.

Otherwise, the budget included a lot of reannounced spending, including:

$11.7 million in 2026-27 for a 6-month extension of the Family Violence and Cross Examination of Parties Scheme. This scheme prevents the personal cross-examination of parties in family law matters where an allegation of family violence between the parties has been raised. The ban on personal cross-examination can be applied automatically under the legislation or imposed by the court. If the ban is imposed, an independent lawyer is appointed to cross-examine victim-survivors. Women’s Legal Services Australia and others have been calling for a significant expansion of this scheme and the announcement is disappointing.

$61.2 million over 4 years to fund 50 new frontline and community sector workers to support victim-survivors of domestic, sexual and family violence.

Child Support

In a major and welcome new funding package that will improve safety and financial security for women and children impacted by domestic and family violence, the government will invest $182 million over 4 years to strengthen the child support payment system. The focus of reforms is to address the weaponisation of government systems by people who use violence.

Funding includes:

$78.6 million to provide greater protections for parents in private collection arrangements and create new pathways for parents to move to the government’s collection system, remove requirements around information exchange, and give Services Australia greater ability to stop abuse and weaponisation.

$39.6 million to ensure more child support is paid in full and on time.

$23.3 million to improve parents’ awareness and understanding of the child support scheme and its interactions with Family Tax Benefit.

$20.0 million to improve the accuracy of child support assessments through tax lodgement enforcement, including $6.1 million to support the ATO to prosecute parents who repeatedly fail to submit their tax returns to reduce the amount of child support they pay.

$18.4 million to improve debt recovery processes.

These measures are an important first step to fixing the child support system and reducing financial abuse.

Migration

The Federal Circuit and Family Court of Australia will establish a pre-filing pilot for a migration duty lawyer service in the Sydney and Melbourne registries to increase efficiency of review in protection matters at a cost of $3.9m over 4 years. This is part of a wider $74.2 million package to increase the efficiency of the merits and judicial review processes. It is not yet clear who will be funded to deliver the services. Stay tuned for more detail.

The Home Affairs budget also includes $27.0 million over 2 years to continue information and education activities to improve migrant workers’ awareness of workplace safeguards, protections and compliance measures related to migration law.

Cost-of-living measures

Social security

The budget included no good news for people who rely on social security payments as their main source of income. There were no increases to JobSeeker or other working age payments, and no increase to the Disability Support Pension despite the budget savings the government will generate through its NDIS reforms.

Despite the increased vulnerability to economic shifts of people living in regional and remote areas, the budget also did not increase the Remote Area Allowance. This will see people on already extremely low incomes suffer even greater financial stress as inflation and living costs – including fuel – continue to rise.

With the budget projecting unemployment will rise to 5% (considered by ACOSS to be an underestimate), we expect to see an increase in legal need as financial hardship and poverty impact more people.

Instead of boosting the incomes of people with the least, the government will use revenue from changes to the way private trusts are taxed to funding the Working Australians Tax Offset, which will provide a $250 tax rebate to all workers earning more than $20,000 a year and will cost the government $3 billion in its first year. This is a poorly targeted measure that will compound inequality and worsen the gender pay gap with women making up a larger proportion of workers earning under $20,000. It also sends a message to the community that only workers deserve relief from current cost-of-living pressures.

In another disappointing move, the budget confirmed that the government will continue to invest $202.7 million over five years to maintain income management schemes for First Nations communities.

The government will also deliver $1.7 billion over 2 years in funding to Services Australia to maintain customer services for people who receive Centrelink payments and its emergency response capability. This will include retaining the 3000 or so staff hired in recent years to enhance frontline service staffing.

Housing

The budget delivered major reforms to negative gearing rules and the tax discounts on capital gains available to property investors. ACOSS predicts the reforms will reduce house prices and intergenerational wealth inequality over the longer term and is unlikely to significant increase rents. Changes to negative gearing rules for investment properties are effective from budget night, while changes to the capital gains tax discount will commence from 1 July 2027.

For more detail on negative gearing, capital gains tax, and the reforms the government announced on budget night, see this budget night article in The Guardian.

Beyond this, the budget included no new funding to boost the supply of social housing or address pressures in the rental market. However, other measures noted by ACOSS include:

$60m to community housing providers via payments to the states and territories.

Extending the ban on foreign investment in existing dwellings, a measure ACOSS has described as one that mainly fuels racism because the numbers of foreign investors in existing dwellings were low even before the ban was introduced.

Other measures

Climate change and energy

The government’s major energy measure is the Fuel Security and Resilience package. Costing $14.8 billion over 5 years from 2025-26, the package will deliver a government-owned stockpile of 1 billion litres of diesel and jet fuel ($3.2 billion), a Fuel and Fertiliser Security Facility to expand private stockpiles and increase mandatory minimum stockholding obligations ($7.5 billion), and $2.9 billion to temporarily halve the fuel excise and waive heavy vehicle road user charges for three months.

Beyond this, the budget included very little in the way of new investment to tackle climate change. The government did not deliver tax reform on profits from gas exports or changes to the diesel rebates for fossil fuel industries. It will also bank $2.2 billion in savings over 14 years by reallocating unspent funds within the Climate Change, Energy, the Environment and Water portfolio.

The Disaster Relief Program (which funds disaster response efforts) will see an increase of $2.5 billion over 5 years. Disappointingly, however, the budget includes no extra investment in climate adaptation or disaster resilience measures.

In terms of energy efficiency, the budget did include a little new money ($500 million over 10 years) to build and upgrade active transport initiatives (walking and bicycle tracks), as well as some help for states to fast-track home builds and energy efficiency measures. These measures will be welcome so long as fast-tracked housing and energy efficiency programs prioritise renewable energy and not fossil fuels.

Community and Social Services

The government announced new investment of $565.1 million over 4 years to strengthen regulation, governance, and quality in the aged care sector before the budget.

It will also provide $171.7 million over five years from 2025–26 to establish a single national Children and Family Support program from 1 July 2027 to simplify grant administration, better support frontline services to deliver prevention and early intervention activities and build capacity within the families and communities’ sector. Initial analysis suggests the government believes efficiencies will result in a 12% increase in funding for services.

Disappointingly, cost-of-living measures in the budget did not include additional support for social services, including food relief or emergency relief services. Nor did it include additional funding for alcohol and other drug services.

What our allies are saying

You can read our initial response to the budget, and Tim’s extended reflections on LinkedIn
For budget commentary from sector colleagues use the links below: