26 Mar 2025-26 Federal Budget
Budget 2025-26 is one that the government clearly did not expect to have to deliver.
It features a modest personal income tax cut of up to $268 in 2026-27, with a tax saving of up to $536 from the 2027-28 year, and over $20bn in predominantly preannounced spending initiatives across energy, healthcare, education, families and housing.
The impending tax on super balances above $3m remains in place for 1 July 2025. As does the $20,000 instant asset write-off for small business that is supposed to apply to the current financial year. Neither initiative has passed Parliament and if not passed prior to the election being called, will lapse.
Budget 2025-26 is a budget for voter appeal with over $7bn in additional spending measures in 2025-26 and over $20bn across five years. Most measures extend previously announced and Budgeted items for another year.
Key initiatives include:
Energy:
- $1.8bn to deliver a $150 energy bill rebate extension until the end of 2025.
Healthcare:
- $8.5bn on Medicare for increases to Medicare payments, 50 new urgent care clinics, and a bulk billed GP service.
- $1.8bn over 5 years for cheaper medicines on the Pharmaceutical Benefits Scheme.
- $240m for women’s health – reproductive health and menopause
Education:
- $500m to provide a 20% cut to HECS-HELP debt for students, and a realignment of the repayment schedule to reduce the amount required to be paid (from 1 July 2025).
Housing:
- $800m to expand the ‘Help to Buy’ scheme reducing the size of the deposit required to buy a home by co-buying with the Government.
Families:
- Three days of subsidised childcare for families with young children (income tested) from 1 January 2026 replacing the Child Care Subsidy activity test.
Lifestyle:
- From August, the excise on beer will be frozen for 2 years.
Australia’s economy is expected to grow, albeit slowly at 2.25% in 2025-26 and 2.5% in 2026-27. The Budget will be in deficit at -$42.1bn in 2025-26, before improving marginally but remaining in the red.
To read the full 2025-26 Federal Budget, please click here.
If you have questions, please contact our office:
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