Two state budgets landed this week and they tell very different stories for small business. Victoria handed down a targeted small business package on 5 May. Western Australia posted a large surplus on 7 May and offered small business very little of it. Both arrived in the same week the RBA lifted the cash rate again, which changes the maths on any investment a grant might help fund.
Victoria: a $19 million small business package
Victoria’s Budget 2026-27, handed down on 5 May 2026, includes a $19 million small business package. The components are specific:
- $12 million to open up government procurement to small business
- $3.3 million for Skills Solutions Partnerships, focused on AI and technology skills
- $1.6 million for the Drink Victorian beverage program
- $1.2 million for a Small Business Activation Fund, offering grants of $5,000 to $100,000
- $400,000 for dispute resolution support
Alongside the small business package sits a $14 million AI investment package, including $8.2 million for Digital Jobs workforce transition.
The line item most owners will care about is the Small Business Activation Fund. Grants of $5,000 to $100,000 are meaningful money, but note the size of the pool: $1.2 million is small relative to likely demand. If the grant ceiling is reached by even a handful of applicants, the fund will not stretch far. Speed will matter.
Budget papers are at the Victorian Budget site.
Western Australia: a big surplus, a small offer
Western Australia’s Budget 2026-27, handed down on 7 May 2026, posted a $2.4 billion surplus. For small business, the offer is modest: $1.4 million for a second round of the Small Business Growth Grants Program, supporting investment in growth, capability and resilience. There was no payroll tax relief.
A $2.4 billion surplus alongside a $1.4 million small business allocation is a clear statement of priorities. WA businesses hoping for broader relief will need to wait; for now, the Growth Grants round is the opportunity on the table.
The rate rise in the background
The week’s budgets landed against a tightening backdrop. On 5 May 2026 the RBA raised the cash rate by 25 basis points to 4.35%, the third increase this year. The vote was 8 to 1.
This matters for grant strategy. Most grants are co-contribution or reimbursement based, which means your business funds some or all of the spend. If that funding is borrowed, it is now more expensive than it was in January. A project that stacked up at the start of the year deserves a fresh look at 4.35% before you commit.
What to do now
- Victorian businesses: watch for the Small Business Activation Fund guidelines and prepare the basics early. Have your business plan, quotes and financials ready so you can apply the day the fund opens. With a pool this small, speed matters.
- WA businesses: get ready for the Small Business Growth Grants round before it opens. Round 2 applicants who prepare early tend to fare better than those who start when applications open.
- Both: factor the higher cash rate into any grant-matched investment plans. Rerun the numbers at current borrowing costs before relying on a grant to make a project work.
Before you act
This article is general information only and is not financial advice. Grant guidelines, eligibility criteria and opening dates are set by the relevant state government and can change. Confirm the details with the official source before preparing an application or committing to any spend.