On 25 March 2025, Treasurer Jim Chalmers delivered the Federal Budget for 2025-26, introducing several measures across trade, border security, transport, agriculture, and manufacturing.

Key Points:

1. Combating Illicit Tobacco Trade:

   • Allocation of $156.7 million over two years to enhance compliance and enforcement against illicit tobacco and nicotine products.

   • Funding includes:

     • $49.4 million for the Criminal Assets Confiscation Taskforce.

     • $40.0 million to support state and territory initiatives.

     • $31.6 million for monitoring under relevant health acts.

     • $19.9 million to bolster the Office of the Illicit Tobacco and E‑cigarettes Commissioner.

     • $7.0 million for the Australian Border Force to trial detection tools.

2. Tariffs on Russian and Belarusian Goods:

   • Extension of the additional 35% tariff on imports from Russia and Belarus until 24 October 2027.

3. Excise Duty on Draught Beer:

   • A two-year pause on the biannual indexation of draught beer excise and equivalent customs duty rates, affecting adjustments scheduled for August 2025, February 2026, August 2026, and February 2027.

4. Trade Relations with India:

   • Provision of $20.0 million over four years to enhance economic engagement with India, including:

     • $16.0 million for the Australia‑India Trade and Investment Accelerator Fund.

     • $4.0 million to extend the Maitri Grants Program.

5. Border Security Enhancements:

   • Investment of $84.5 million over four years to strengthen border security measures, such as:

     • $74.9 million to address illegal fishing in northern waters.

     • $9.6 million to upgrade sea cargo screening technology.

Factors to Consider for the Future:

• Illicit Trade Enforcement: The significant investment in combating illicit tobacco trade underscores the government's commitment to addressing organized crime in this sector. Businesses should anticipate increased scrutiny and ensure compliance with regulations.

• International Trade Relations: The extension of tariffs on Russian and Belarusian goods may impact import strategies. Companies should assess supply chains and explore alternative sourcing options to mitigate potential cost increases

• Alcohol Industry Implications: The temporary halt in excise duty indexation for draught beer provides short-term relief for the hospitality sector. Stakeholders should plan for the resumption of indexation in August 2027.

• Engagement with India: The funding to enhance trade with India presents opportunities for businesses to expand into the Indian market. Companies should monitor developments related to the Trade and Investment Accelerator Fund and the Maitri Grants Program for potential collaborations.

• Border Security Measures: Investments in border security and cargo screening technology indicate a focus on preventing illicit imports. Importers should prepare for possible changes in inspection protocols and potential delays as new technologies are implemented.

These measures reflect the government's approach to strengthening economic resilience, enhancing security, and fostering international trade relationships.

Data courtesy of the Australian Government & IFCBAA