Federal Pre-budget Submission 2026-2027 

Why it’s crucial to invest in the food system

In 2024, researchers at Oxford University and London School of Economics found that transforming the food system to one that is healthier, equitable, and sustainable would create $USD10 trillion in benefits per year, requiring less than 5% of that figure in investment (Food Systems Economic Commission, 2024). 

Conversely, the harms caused by the current food system – malnutrition and undernutrition, the obesity epidemic, loss of biodiversity, environmental damage and climate change – currently exceed $USD10 trillion per year (op cit.). 

In Australia, experts at the Obesity Evidence Hub have forecast that the economic costs of overweight and obesity will rise from $AUD39 billion in 2019 to $AUD62 billion in 2030 and to $228 billion by 2060, or 3.5% of total GDP.¹ With an anticipated 20:1 return on investment, the case for major investment in a better food system is commonsense social, environmental and macroeconomic policy.  

Submission Summary: Budget Recommendations 

$500m Centre for Regenerative and Agroecological Farming 

Sustain calls for the establishment of a $500mn fund for regenerative and agroecological food production. This fund would assist farmers to transition to forms of food production that will nourish generations to come.

$500mn National Edible Gardens and Urban Agriculture Fund 

Sustain proposes the establishment of a $500 million Edible Gardening Fund, co-financed by federal and state/territory governments, to drive a mass expansion of urban food production across Australia.

$20m/year Farm Incubators and Mentorship Programs 

Australia is facing a critical moment in its food and farming future. Sustain advocates for a $20 million per year investment in Farm Incubators and mentorship programs, co-funded by federal and state governments, to support new and diverse entrants into agriculture, activate underutilised land, and strengthen resilient local food systems.

$2.4 bn/year National Farm Insurance Scheme 

We need to ensure the security and viability of growing food domestically. Sustain calls for the establishment of a $2.4 billion per year National Farm Insurance Scheme, funded by the Federal Government, to subsidise up to 50% of farm insurance premiums and safeguard domestic food production against escalating climate-driven disasters.

$3.1 bn/year Universal Primary School Meal Program 

Sustain advocates for a $3.1 billion per year Universal Primary School Meal Program to ensure every Australian child has access to nutritious school meals, improve educational and health outcomes, and strengthen local food economies through direct procurement from farmers.

$10 bn increase in welfare payments to guarantee the human right to good food for all 

Sustain supports the Australian Council of Social Services Recommendation 10, calling on the Federal Government to substantially lift base rates of income support payments including JobSeeker Payment, Youth Allowance, Austudy, Abstudy and Parenting Payment to at least the pension rate ($82 per day for a single person). Raising payments by $26 per day would help ensure people receiving Centrelink can afford a healthy, culturally appropriate diet and reduce the escalating social and health costs of food insecurity.

Financing these recommendations 

The total cost of these recommendations is approximately $16.5 bn annually. We propose the following fiscal measures to ensure that these initiatives, whose indirect and indirect benefits would likely exceed $100 bn annually within a few years of their implementation, will be revenue-neutral to the budget bottom line.  

Introduce a 5% wealth tax on billionaires – $17.4 bn/yr 

At a time when wealth inequality is soaring and millions of Australian households and families are struggling to meet the basic costs of living, let alone enjoy a holiday, research published by Oxfam found that the wealth of the country’s billionaires grew by $600,000 per day in 2025. Oxfam is proposing a 5% wealth tax on Australia’s 170 billionaires, which would raise an estimated $17.4 bn per year.   Such a tax would more than cover all the measures proposed in this submission and at a very minimum fund the uplift in welfare benefits to bring all Australians above the poverty line.  

Introduce a tax on sugar-sweetened beverages – $1 bn/yr 

Modelling released by the Australian Medical Association in June 2024 revealed that a tax on sugar-sweetened beverages only would generate nearly $4 billion over the four financial years (24/25 – 27/28). Similar modelling by the Parliamentary Budget Office produced a figure of $1.4 bn in two years. Surveys indicate widespread support for such an important preventative health measure that has been adopted in over 120 countries. 

Introduce a tax on branded fast foods – $3 bn/yr 

Australians are spending an estimated $30 bn annually on branded fast food, which is a significant contributor to the obesity epidemic. A 10% increase on such foods would raise $3 bn per year and fund several of the key health-promoting and health-prevention initiatives in this submission.  

Introduce a tax on ultra-processed foods – $1.1 bn/yr 

Over half the calories consumed by Australians now come from ultra-processed foods, according to important new research published in The Lancet. Australian households spend on average around $10,000 per year on food and consumption patterns suggest that 50-60% of that expenditure is now on ultra-processed and discretionary foods. According to the ABS, total household food retail expenditure reached nearly $15 bn in June 2025. Using 50% as a baseline, a 15% tax on ultra-processed foods would raise $1.1 bn / yr.