ACOLA and Australia's Learned Academies welcome investments in science and R&D announced in the 2026-27 Budget.
Australia’s long-term prosperity depends on a thriving, well-coordinated research and development ecosystem that drives impactful innovation, addresses national challenges and supports economic growth.
This budget takes meaningful steps in the right direction — but it is a starting point, not a destination.
Below is a summary of the most significant budget announcements for ACOLA and our member Academies.
R&D Investment and Reform
The R&D Tax Incentive will undergo its most significant overhaul in years. Changes include a 4.5 percentage point increase in core offset rates, a reduction in the intensity threshold from 2% to 1.5%, and an increase in the refundable offset turnover threshold from $20 million to $50 million. The maximum R&DTI expenditure cap rises from $150 million to $200 million, while the minimum expenditure threshold increases from $20,000 to $50,000 — though firms below that floor can still claim if they have worked with a Research Service Provider or Cooperative Research Centre. Notably, supporting R&D expenditure will no longer be eligible.
CSIRO receives a welcome boost of $387.4 million over four years, as does the National Measurement Institute with $273 million over the same period. Australia's association with Horizon Europe — the world's largest R&D program — has also received funding, though the amount has not been specified.
New Institutions and Coordination
The Government will establish three new bodies with implications for the science and innovation sector:
- A National Resilience and Science Council, tasked with advising on R&D and innovation priorities and improving coordination between government and industry.
- A National Environmental Protection Agency.
- A Critical Minerals Reserve, complemented by $173.3 million in direct industry investment.
The Government will also introduce an east coast gas reservation policy.
Energy and Environment
- $97.2 million over five years to continue implementing the National Consumer Energy Resources Roadmap.
- $17 million in 2026–27 for circular economy policy and legislative functions, plus $24 million for solar panel recycling.
- $15.9 million over four years to strengthen the Australian Energy Regulator.
- $15.4 million over four years to expand and extend the Vehicle Electrification dealership program.
- $5.5 million in 2026–27 for the Australian Carbon Credit Unit Scheme.
- $21.7 million over two years for the Australian Space Agency.
- $550 million over ten years for climate-resilient infrastructure in the Pacific and Timor-Leste through the Australian Infrastructure Financing Facility for the Pacific.
Higher Education
An additional $2.5 billion will flow into higher education over the next decade through new Managed Growth Funding and Needs-based Funding systems — a structural shift aimed at broadening access and participation across the sector.
Where Funding Has Been Cut
Not all announcements represent new investment. Several significant reductions deserve close attention:
- $1.3 billion cut over 2026–27 to 2038–39 from the Future Made in Australia – Renewable Energy Superpower program, including reduced funding for the Battery Breakthrough Initiative, Solar Sunshot, and Hydrogen Headstart (capped at $1 billion for Round 2).
- $166.2 million cut over five years from uncommitted grant funding within DISR.
- $105 million cut over five years from the Industry Growth Program.
