CI Group responds to 2026 Federal Budget

"For many Australians, the reality of economic inequality is becoming harder to ignore" – Nicky Sloan, CEO of Community Industry Group, the peak body for not-for-profit social services across southern NSW

Last month Nicky Sloan shared her thoughts in an opinion piece ahead of the Federal Budget titled A Chance for a Fairer Australia. Here's what the Wollongong-based organisation had to say after Tuesday's announcements.

Highs and Lows of the 2026/27 Federal Budget: Tuesday, 12 May

Federal Treasurer Jim Chalmers today delivered the Albanese Government’s 5th Budget.

This is a time when many people in the community, particularly those on low incomes, are struggling with cost-of-living pressures and demand across the community services sector has been steadily growing. Community Industry Group was hoping the budget would deliver measures to ease the pressure on both the sector, and the people, families and communities doing it tough, but the budget has delivered a mixed outcome for the social services sector, and for the people they work with.

Aged Care

The good news is the $3 billion for aged care to support the construction of 5,000 new residential aged-care beds each year, an increase to the Accommodation Supplement, and structural changes that introduce new funding tiers, such as additional payments for facilities with more than 60 per cent supported residents.

Importantly, this includes measures to cover the cost of removing consumer contributions from showering, dressing and continence support for Support at Home services. This will make a material difference for older people and will help address the escalating hospitalisation rates.

This announcement also includes $200 million for 20 new Specialist Dementia Care Program units and an expansion of the Hospital to Aged Care Dementia Support Program. Welcome news as the number of people living with dementia increases.

“While there are many positive announcements for our critical aged care sector in this budget, we are keen to see more detail about the allocation of new Support at Home packages for 26-27. We know there are 200,000 people currently on the waitlist, and it is unlikely the nearly $390 million announced will meet demand,” said CI Group CEO, Nicky Sloan.

“Additionally, there does not appear to be any new investment in entry-level aged care supports through the Commonwealth Home Support programme (CHSP)," said Ms Sloan. “And while we welcome the support to deliver 5,000 aged care beds every year, we know that Australia needs growth of 10,000 beds annually to meet the growing demand as our population ages.”

Social and Affordable Housing

While there is little to incentivise social housing in the budget, CI Group welcomes the $60 million investment to create the new National Youth Housing Supplement which will unlock social housing for over 4,000 young people.

The National Youth Housing Supplement fixes the Youth Housing Penalty, a structural flaw in Australia’s housing system that has discouraged providers from offering tenancies to young people and disadvantaged youth housing proposals in funding rounds.

“This will help to house 4000 young people who may otherwise become homeless,” said Ms Sloan.

CI Group has long advocated for changes to Capital Gains Tax and Negative Gearing to redirect these incentives to affordable housing, however the measures in this budget, while brave, do not go far enough.

“We welcome the budget announcements on Capital Gains Tax discounts and Negative Gearing which will incentivise the building of new homes and make existing homes more accessible to first home buyers," said Ms Sloan. “We hope they will also incentivise ‘build to rent’ properties, but we would have liked to see these measures extended to only apply to affordable rental properties.”

Areas of Concern

The budget once again fails to increase welfare payments including Job Seeker and Youth Allowance.

“This means the people on the lowest incomes will have to continue to struggle to survive on an income which is well below the poverty level,” said Ms Sloan.

And while CI Group welcomes some changes to the NDIS, including increased provider registration which will safeguard participants and level the playing field for many of our registered not-for-profit providers, we are cautious about the lack of details about how the 160,000 participants will be moved from the Scheme and what the impact will be on access to supports such as community participation and supported employment.

“The NDIS is the most progressive disability support service in the world,” said Ms Sloan.

“We would not want to see the incredible improvements it has made in the lives of people with disability rolled back.”

Furthermore, the budget does not address an increase to the critical Australian National Aged Care Classification (AN-ACC) funding. We understand this will now take place in October in order to take into account the annual Fair Work Commission changes to award rates.

And of course, we did not see the introduction of a 25% tax on gas exports, a call that was led by The Australia Institute and was widely supported so many other organisations, and by voters.

About Community Industry Group

Community Industry is the peak body working for community services and organisations in Southern NSW. It supports community organisations, promotes expertise and innovation in community development, fosters industry development and provides advocacy for social justice.

Community Industry Group represents the non-government community services industry in the South East of NSW, and works closely with organisations which provide support to vulnerable people across the region.