Quick Federal Budget Summary for 2025-2026
The 2025-26 Federal Budget has a number of highlights relevant to many of our clients, friends, and supporters explored further below.
Here are some important things about taxes and retirement savings from the Budget that can help people and businesses plan their finances.
The Government’s media focus in the 2025-26 Federal Budget was about personal income tax cuts. Income tax cuts in reality deliver a tax saving of up to $268 in the 2026-27 year, with a tax saving of up to $536 from the 2027-28 year.
Other Key initiatives include:
Energy
• Allocated $180bn 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
Allocated $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).
- A 20% reduction in outstanding student debts, and
- An increase in the repayment threshold to $67,000 from July 2025.
This means you’ll start repaying your loans later and owe less overall.
Housing
Allocated $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.
- The introduction of a “3 Day Guarantee” from January 2026.
- Most families will qualify for at least three subsidised days of childcare each week—no activity test required.
Lifestyle
From August, the excise on beer will be frozen for 2 years.
‘Help to buy’ program extended
The Government’s ‘Help to Buy Scheme' reduces the deposit required to buy a home by providing an equity contribution. Under the program, Housing Australia provides eligible participants with a Commonwealth equity contribution of up to 30% of the purchase price of an existing home and up to:
- 40% of the purchase price of a new home.
That is, they will give you the money and take a stake in your home.
Originally, to be eligible for the program, the income threshold for a single was $90,000 and, for joint participants, $120,000. The Budget increases this threshold to $100,000 and $160,000 respectively. Additional conditions apply.
Non-compete clauses to be banned from: 2027
The Government has announced that it will ban non-compete clauses for low and middle-income employees (under the Fair Work Act high income threshold is currently $175,000). Non compete clauses are conditions in employment contracts that prevent or restrict an employee from moving to a competitor.
Back in April 2024, Treasury released an issues paper for consultation on Worker non-compete clauses and other restraints.
The review states:
“The direct consequence of a non-compete clause is that it hinders competition among businesses: it disincentivises workers from leaving their current job, creating a barrier to the entry of new businesses and the expansion of existing businesses.”
The Government is also make changes to competition law to prevent businesses from:
- Fixing wages by making anti competitive arrangements that cap workers’ pay and conditions, without the knowledge and agreement of affected workers.
- Using ‘no poach’ agreements to block staff from being hired by competitors.
Superannuation
- The superannuation guarantee rate will increase to 12% from July 2025, helping Australians save more for retirement.
- Introduction of “Payday Super,” where employers will be required to pay super at the same time as wages starting July 2026.
- Super contributions will also apply to Paid Parental Leave for babies born after July 2025.
Inflation
- Inflation is expected to be 2.5% through the year to the June quarter 2025.
- The moderation of inflation was helped by cost of living relief and a decline in petrol prices towards the end of 2024. Electricity rebates and indexation of rent assistance (Commonwealth and State) reduced headline inflation by 0.75% through the year to the December quarter of 2024.
More details can be found at the Governments' official Budget website here.
