AFGC Federal Budget statement: Budget lays foundations for productivity growth, but global volatility risks adding pressure to household costs
13 May 2026
The Australian Food and Grocery Council (AFGC) welcomes the Federal Budget’s encouraging signs for long-term productivity growth, investment and workforce capability, but warns escalating instability in the Middle East could still place renewed pressure on costs across the supply chain and for Australian consumers.
AFGC Chief Executive Officer, Colm Maguire, said measures aimed at incentivising business investment and strengthening skills development were welcome steps toward improving the competitiveness and resilience of Australia’s manufacturing sector.
“This Budget recognises lifting productivity is essential to securing Australia’s long-term economic resilience,” said Mr Maguire. “Commitments to support investment, encourage innovation and build workforce capability are positive signals for manufacturers operating in an increasingly challenging global environment.”
“The food and grocery manufacturing industry is Australia’s largest manufacturing sector, employing almost 300,000 people and producing essential goods for every household in the country. Policies that help businesses invest in new technology, improve efficiency and address workforce shortages are critical.”
The AFGC said continued focus on skills and training would be particularly important as manufacturers face ongoing labour shortages and increasing operational complexity.
“Building a pipeline of skilled workers will help improve productivity, strengthen sovereign manufacturing capability and support more sustainable growth across the sector,” said Mr Maguire.
However, the AFGC cautioned domestic policy settings alone may not be enough to insulate Australian consumers from mounting global pressures, particularly rising geopolitical tensions in the Middle East.
“Over recent days, the AFGC has highlighted the growing risks associated with disruption to global shipping and energy markets stemming from instability in the Middle East,” said Mr Maguire.
“These developments have the potential to increase freight, fuel and input costs right across the supply chain.”
“While the Budget contains constructive measures to support economic growth and business investment, global volatility remains a significant risk factor that could place upward pressure on prices for manufacturers and ultimately consumers.”
The AFGC said maintaining a stable and competitive operating environment would be essential to helping manufacturers manage future shocks and continue delivering affordable food and grocery products to Australians.
“Industry and government must continue working together to improve productivity, strengthen supply chain resilience and ensure Australia remains an attractive destination for manufacturing investment,” said Mr Maguire.
Media Contact:
Ingrid Cruz | media@afgc.org.au
The Australian Food and Grocery Council represents Australia’s food, beverage and grocery manufacturing sector — the nation’s largest manufacturing industry — with $173 billion in annual turnover and nearly 300,000 employees, more than 30% of whom work in regional and rural Australia.
