Industry reacts to Federal Budget 2025: Cautious optimism, missed opportunities, and calls for reform

The hospitality, tourism, and accommodation sectors have delivered a mixed response to the 2025 Federal Budget, with cautious optimism about cost-of-living relief potentially boosting domestic travel, tempered by concerns over missed opportunities for long-term structural reform.

While Accommodation Australia welcomed measures that may improve consumer confidence and support for Tourism Australia, the Caravan Industry Association of Australia (CIAA) highlighted likely flow-on benefits for the drive tourism and holiday park sectors—but also flagged a lack of targeted investment in caravan manufacturing and regional tourism infrastructure.

Read the latest AccomNews print edition HERE

Elsewhere, the Retirement Living Council and Property Council of Australia were critical of the Budget’s failure to tackle demographic and investment challenges head-on, warning that business-as-usual approaches won’t meet the demands of a rapidly evolving population and housing landscape.

Accommodation Australia, CEO James Goodwin, acknowledged the budget’s focus on addressing cost-of-living pressures and expressed hope that this would indirectly benefit the sector.

“This was a Budget aimed directly at voters and addressing cost of living pressures – we hope that if consumers have more confidence to travel and participate in the visitor economy this will flow through to stronger demand for the tourism and accommodation sectors,” Mr Goodwin said.

He welcomed the continued funding for Tourism Australia and noted additional investment into emerging markets, such as India, along with small business support measures.

“These are positive signs for many of our members, particularly those in regional areas who benefit from growing international engagement and require ongoing business support,” he added.

Caravan Industry Association of Australia (CIAA), stated that while the Budget may not have directly targeted the caravan sector, there could be positive flow-on effects from broader economic measures.

“With last night’s Federal Budget heavily geared towards cost-of-living relief, both parks and trade sectors should feel some positive flow-on effects,” CEO Stuart Lamont said.

“Tax cuts and other efforts to reduce living costs are likely to provide consumers with increased discretionary funds, with holidays and drive tourism products probable outlets for this spending.”

He also welcomed investment into infrastructure that supports regional travel.

“Funding for major road projects will make holidaymakers more comfortable travelling longer distances – ultimately supporting regional dispersal and regional economies in the process. Importantly, we hope this will improve the safety of not just caravanners, but all motorists who enjoy our roads.”

However, he raised concerns about the lack of specific support for existing manufacturing industries such as the caravan sector.

“The Government’s strategy to reignite economic growth prioritises ‘green manufacturing, power and energy,’ with this year’s Budget offering little targeted support for existing manufacturing industries like the caravan sector. There is also limited funding allocated directly to tourism and regional development.”

Mr Lamont confirmed CIAA’s ongoing commitment to advocacy: “We will be closely monitoring announcements leading into the Federal Election regarding funding for driver safety, education programs, and Round 2 of the Caravan Parks Grant Program. We will continue to advocate for policies and commitments that are practical, pragmatic, and genuinely supportive of Australia’s caravan and broader tourism industry.”

Full Breakdown of the budget from CIAA HERE

Meanwhile, the Retirement Living Council (RLC) criticised the Budget for failing to adequately address Australia’s ageing population and associated housing challenges.

“This Budget does not speak to these challenges,” said Daniel Gannon, Executive Director of the RLC. “Australia is ageing, retirement villages and aged care facilities are operating at full capacity, and housing supply is in deficit.”

Mr Gannon pointed to recent ABS data showing a 9.13 percent increase in Australians aged 75 and over, arguing that the Budget ignored critical reforms that could unlock tens of thousands of homes for younger families by supporting ‘rightsizing’ among older Australians.

“These initiatives have significant potential to free up housing while supporting older Australians into age-appropriate homes without financial penalties,” he said.

The Property Council of Australia said the Budget underscored the need for broad tax and regulatory reform to attract foreign capital and build the infrastructure Australians rely on.

“With big state deficits and national debt ballooning, we’re going to need other peoples’ money to build the best parts of our cities,” said CEO Mike Zorbas.

He called for a national debate on removing barriers to institutional investment and increasing skilled migration to support growth and productivity.

He argued that foreign investment is being deterred by outdated regulatory frameworks and punitive state taxes, and called for a national debate on lifting barriers to institutional investment.

“The Budget does little to address productivity roadblocks or the need for skilled migration—both essential to building the cities and communities Australians need.”

However, he welcomed measures such as the $54 million allocation for advanced manufacturing in prefabricated and modular homes and the expansion of the Help to Buy scheme.

While key industry players acknowledged some positives, the overall sentiment was one of cautious optimism tempered by frustration at missed opportunities—particularly around housing supply, aged care, manufacturing support, and investment reform.

With an election on the horizon, industry groups will be watching closely for more concrete commitments in the months ahead—commitments that speak directly to the practical needs of Australia’s tourism, accommodation, and housing sectors.