Council
14 May, 2026
Rural concerns grow: Yarriambiack Shire Council wary of federal budget impact
THERE was plenty in Tuesday’s Federal Budget to get the attention of Yarriambiack Shire Council, with multiple concerns of how it will affect major economic activity and life within its boundaries.
Overall, YSC saw it as a mixed bag for regional communities and highlighted several topics of local relevance after contact from the Herald.
The positive: YSC welcomed the Federal Government’s announcement of a $2 billion Local Infrastructure Fund to support utility companies and councils to deliver enabling infrastructure for new housing, but has expressed concern that rural communities may again miss out.
The fund has been designed to unlock housing supply by supporting essential infrastructure, such as water, power, sewerage, and access roads, for new homes and developments, with $500 million allocated specifically for regional areas.
Mayor Andrew McLean said housing remained one of the most significant challenges and pointed to “shovel-ready” projects in Warracknabeal, Hopetoun and Murtoa.
“We have infrastructure projects prepared that would enable new housing in key towns, but too often rural councils are disadvantaged when funding is allocated, due to the high cost of construction in rural communities,” he said.
YSC was urging the Federal Government to ensure smaller rural shires receive a fair share of the $500 million regional allocation, and that assessment processes properly account for the higher infrastructure costs faced by rural communities.
“Regional funding must reach the regions it is intended to support,” Mr McLean said.
“Smaller rural shires like Yarriambiack cannot continue to be overlooked.”
The new co-funding tiers for remote roads (up to 90 per cent Federal funding) and the associated application process were also a positive: “We welcome changes in co-funding contributions.”
But to begin with, the negative side of the ledger, he had serious reservations about overheads.
“Council was hoping to see relief for Local Government included in the budget to assist with the rising cost of fuel and operational costs,” Mr McLean said.
“Unfortunately, we have not seen any assistance announced other than the Financial Assistance Grants being paid forward. Whilst that action may assist with cashflow, it does not account for the rising costs currently being experienced, impeding the council's delivery of services.”
The budget also appeared to accelerate transmission and energy infrastructure development across Western Victoria to meet Net Zero targets, and there was concern about the costs of the Environmental Effects Statement process “being pushed directly onto local government and the ratepayers”; the concept of a direct Federal ‘infrastructure impact levy’ on large-scale grid project proponents was something he would back.
“Councils should respond as part of an EES inquiry,” Mr McLean said.
“This recently cost Yarriambiack Shire $118,000 to respond to the Warracknabeal Energy Park. “Yarriambiack Shire has budgeted $200,000 to respond to possible EES’s in 2026/27. This is both a financial and resource burden on small rural Councils.
“We would support a levy to pay for these costs so our communities are not unfairly disadvantaged.”
VFF reaction
The much-discussed changes to capital gains tax and negative gearing concessions were still being worked through by the shire to make an informed comment.
For now, agricultural industry stakeholder organisations such as the Victorian Farmers Federation have highlighted the potential significant negative effect on generational farmers.
VFF acting presidentPeter Star said the gap between what a farm was worth on paper and what it earns has never been wider.
“Farmland is not like any other asset,” he said.
“It is held and handed down, not bought to flip, traded for capital growth, or sold at the top of the market.
“It is a working asset, stewarded across generations specifically, so it does not need to be sold. Governments need to understand that distinction before they reach for the tax lever.
“When a farm passes between generations, limited money changes hands, and no income is realised, and no buyer arrives with a cheque.
“To tax that transfer as if it were a sale invents a gain that does not exist and sends the bill to the next generation before they have planted their first crop. That is an inheritance tax by another name, and Australia abolished those decades ago for a very good reason.”
Communication and health gaps
Telecommunications support also took a hit in the budget, with funding for the Regional Tech Hub not renewed.
The service was established in December 2020 following recommendations from the 2018 Regional Telecommunications Independent Review to address the unique needs of rural customers, as standard information from telcos is often inaccurate or unhelpful.
In her own highly critical response to the budget, Mallee MP, Anne Webster, was especially scathing of this detail, saying the program “was helping regional Australians every day stay connected in their business, in telehealth, studying online or ensuring Triple Zero connectivity” and wondering about the future of the Mobile Blackspot program.
“Mallee constituents are still coming to me about having no connectivity after Labor’s botched 3G shutdown, and Labor are not investing adequately in improving life-saving and productivity-lifting connectivity,” she said.
As Shadow Minister for Regional Health and Regional Communications, Dr Webster also lamented the lack of Commonwealth investment in improving regional health outcomes.
“Labor continues to pour money into funding metro-focussed models of health like UCCs (Urgent Care Clinics), and additional money to the states to fund hospitals, but repeatedly fails to invest into new regional initiatives,” she said.
NFF reaction
Like YSC, the National Farmers Federation also saw the budget as “a mixed bag for ag”, pointing to a $10 billion fuel package to improve domestic fuel and fertiliser resilience for the industry, but citing another loss in the $191.6 million cut from the Department of Agriculture, Fisheries and Forestry, while also pointing to $387 million of funding for disease preparedness with the CSIRO and Australian Centre, along with $8.7 million for the Australian Pesticides and Veterinary Medicines Authority.
However, the NFF contrasted the VFF and took a more positive view of the changes to the CGT, focusing more on the immediate ‘wins’ – specifically that primary production income will remain exempt from the new 30 per cent trust tax, and that existing small business CGT concessions have been preserved for now.
The divergence has highlighted how Tuesday’s budget may further complicate the growing tension between protecting the annual operating profit and securing a family farm’s long-term future.
Summary
These competing perspectives underscore the difficulty in reconciling the budget with the specific needs of rural electorates.
The dichotomy between the government’s focus on short-term liquidity, such as the early release of Financial Assistance Grants, and the long-term operational costs faced by regional councils and primary producers remains a central point of tension.
As stakeholders like YSC and farmers continue to look at the fine print, the budget has revealed a clear shift in priorities: a move toward macro-economic resilience and large-scale industrial infrastructure, often at the expense of regionally specific support services and historic funding models.
The ultimate impact of the 2026/27 Budget locally will depend on whether this shift toward national-scale initiatives can effectively coexist with the sustainability and service delivery models required for regional viability.
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