Treasury doubles business investment forecast for 2025-26
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The news: Treasury has doubled its forecast for business investment in 2025-26, according to an extract of its mid-year budget update due to be formally released next week.
The numbers: Treasury's 2025-26 forecast has doubled since its Pre-election Economic and Fiscal Outlook (PEFO) from 1.5% to 3%. Its 2026-27 forecast remains at 1.5%.
Treasury is expecting "significantly more strength" in non-mining business investment, with its 2025-26 forecast hiked from 1% to 4%. In 2026-27, it is expecting growth of 2% compared to 1% at PEFO.
They context: The mid-year budget update will note that business investment rose 3.4% in the September quarter, its highest quarterly growth since March 2021.
This was boosted by increased investment in the energy transformation, data centres and computer software. The update said lower financing costs, rising private demand and high-capacity utilisation are supporting a "more favourable investment environment".
What they said: "The mid-year update forecasts business investment to pick up even further off the back of big increases in private sector spending on new technology and renewable energy," said Treasurer Jim Chalmers.
"It will show that the private sector recovery that we’ve been planning for and preparing for is really taking shape.
"Whether it’s reducing red tape where we responsibly can, our efforts to attract and deploy more capital, or by making the most of artificial intelligence and the energy transformation, boosting business investment is a deliberate feature of our economic strategy."
The sources: Jim Chalmers speech, Treasury media release
