2025–26 Australian Federal Budget – Key Summary

In March 2025, Treasurer Jim Chalmers delivered the 2025–26 Federal Budget, shaping national spending, tax policy, services, and cost-of-living measures ahead of the federal election cycle. The Guardian

1. Cost-of-Living and Household Support

• Energy relief extended: Households and small businesses receive ongoing energy bill rebates aimed at reducing direct household costs. ANZ
  
• Ongoing measures to cap PBS medication costs at around $25 per script, lowering out-of-pocket medical expenses. ANZ
  

2. Income Tax Cuts

A headline feature of the budget is further modest tax cuts aimed at low and middle-income earners:

• The 16% tax rate on income from $18,201 to $45,000 will be cut to 15% from 1 July 2026 and then to 14% from 1 July 2027. ANZ
  
• For an average worker, this translates into hundreds of dollars extra take-home pay annually once fully implemented. ANZ
  

3. Housing and Home Ownership

• Foreign buyers of existing homes are banned from purchasing for two years from April 1, 2025, as part of broader housing affordability measures. ANZ
  
• Expansion of the Help to Buy shared-equity scheme, making home ownership more accessible for more Australians. ANZ
  

4. Education and Workforce

• Significant investment in early childhood education and care, including a $5 billion funding package to improve access and workforce conditions. UMSU
  
• Student debt reduction of approximately 20% for HELP and other student loans, benefiting around three million Australians. SBS Australia
  
• Creation of 100,000 permanent free TAFE places per year from January 2027 under broader education initiatives. ANZ
  

5. Health and Aged Care

• Boosting Medicare’s bulk billing incentives, with billions allocated to increase bulk-billing access and health services. ANZ
  
• Increased funding for public hospitals and urgent care clinics, and targeted measures for women’s health. Moneywise
  

6. Infrastructure and Regional Investment

• Around $17.1 billion in infrastructure funding over several years for roads, rail and regional projects. The National Tribune
  
• Support for broadband and connectivity initiatives in regional and remote areas. The National Tribune
  

7. First Nations and Community Support

• $1.3 billion over six years for Closing the Gap initiatives, supporting Indigenous communities with services, home ownership, and business opportunities. Torres Strait Island Regional Council
  

8. Disaster Recovery and Resilience

• New funding for disaster recovery, including $1.2 billion to support communities affected by recent extreme weather events. NEMA
  

9. Small Business and Economy

• Tax relief and support measures for small businesses alongside broader economy-wide reforms. Australian Government Budget
  
• Continued focus on building a resilient economy amid global uncertainty and cost-of-living pressures. ANZ
  

Budget Context and Outlook

The 2025 Budget was delivered in a politically significant year, with economic pressures from inflation, global trade shifts, and energy costs shaping its priorities. The headline tax cuts are positioned as cost-of-living relief, with broader investments in health, education, housing and services. ANZ

While deficits are forecast to continue for several years, the budget aims to balance immediate household support with long-term service and infrastructure investment. Financially Sorted

Sources & Further Reading

• Australian Government’s official Budget 2025–26 overview and detailed documents. Australian Government Budget
  
• Expert summaries from tax and accounting advisers outlining key tax and spending changes. KPMG
  
• Media analysis of key policy focuses and implications. Bloomberg
  

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