Michelle Bromley CFP®, Director – Strategy & Advice & Jason Daniels, Director - Accounting & Business Advisory
The Federal Budget 2025-26 garners praise for significant investments in healthcare, education, and cost-of-living relief. The extension of energy bill relief, establishment of new Medicare Urgent Care Clinics, and substantial funding for public schools and early childhood education are seen as positive steps. Additionally, the budget's measures to cut student debt and support wage increases for essential workers highlight the government's commitment to improving the lives of Australians and addressing their most pressing needs.
Cost of Living Measures
- New Tax Cuts: Additional tax cuts in 2026 and 2027, reducing the tax rate for income between $18,201 and $45,000 from 16% to 14% by 2027, helping Australians keep more of their earnings.
- Energy Bill Relief: Two $75 rebates off electricity bills for every household and for eligible small businesses through to 31 December 2025.
- Growing Wages: Banning non-compete clauses for low and middle-income employees, funding wage increases for aged care and childcare workers.
- Cutting Student Debt: Reducing student loan debt by 20%, increasing the repayment threshold to $67,000 in 2025-26, and making the repayment system fairer.
Education
- Universal Early Childhood Education: $5 billion investment to ensure every child is eligible for at least 3 days per week of subsidised early education and care, including wage increases for early educators and expanding high-quality care places.
- Better and Fairer Schools Agreement: Increased funding for public schools tied to reforms to lift education standards, including evidence-based teaching practices and more mental health support.
- Permanent Free TAFE: Investment to make 100,000 Free TAFE places permanent each year from 2027, supporting vocational training in priority sectors and easing cost-of-living pressures for students.
- University Funding and Student Debt Relief: $2.5 billion over 11 years for a new higher education funding system and cutting student debts by 20%, providing significant relief for over 3 million Australians.
Health
- Record Investment in Bulk Billing: $7.9 billion to expand bulk billing, making GP visits free for more Australians, with a goal of 90% of GP visits being bulk billed by 2030.
- Medicare Levy: From 1 July 2024, increasing the Medicare levy low-income thresholds by 4.7%.
- Medicines: From 1 Jan 2026, lowering the maximum cost of medicines on the Pharmaceutical Benefits Scheme to $25 per script for everyone with a Medicare card & remain frozen at $7.70 for pensioners.
- Medicare Urgent Care Clinics and Hospitals: $644 million to establish 50 new Medicare Urgent Care Clinics, and $1.8 billion for public hospitals to reduce waiting times and manage ambulance ramping.
- Boosting Healthcare Workforce: Increased funding for training more doctors, nurses, and midwives, including incentives for junior doctors to specialize in general practice and scholarships for nursing and midwifery.
- Better Healthcare for Women: $792.9 million package to improve women's health care, including larger Medicare rebates for contraceptives, support for menopause, and new endometriosis treatments.
Housing
- National Housing Accord: Aims to build 1.2 million new homes over 5 years, with significant investments in social and affordable housing through initiatives like the Housing Australia Future Fund (HAFF) and the Social Housing Accelerator.
- Help to Buy Program: Expanded to support Australians in buying homes with lower deposits and smaller mortgages, with the government providing up to 40% equity contribution.
- Banning Foreign Buyers: A two-year ban on foreign buyers purchasing existing dwellings starting April 2025, along with measures to prevent land banking by foreign buyers.
- Support for Renters and Homelessness Services: Increased funding for Commonwealth Rent Assistance, homelessness services, and initiatives to boost rental housing supply and renters' rights.
Small Business
- There was no announcement extending the temporary instant asset writeoff for small businesses (those with turnover below $10m) beyond 30 June 2025. The instant asset write-off allowed small businesses to deduct asset costing up to $20,000. From 1 July 2025, small businesses will revert to depreciating these assets.
- The government also intends to ban non-compete clauses in employment contracts for staff earning under $180,000 per year.
