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The 2025 Federal Budget has been unveiled, bringing a range of proposed measures aimed at easing cost-of-living pressures and supporting Australians in various aspects of their financial lives. These changes are still proposals and need to pass into law (unless stated otherwise).
Here’s a snapshot of the key proposals—and how they could affect you.
Taxation: Modest Relief on the Horizon
Starting July 1, 2026, all taxpayers could see a modest tax cut with the 16% tax rate on incomes between $18,201 and $45,000 dropping to 15%, then further to 14% from July 1, 2027. Other tax brackets remain unchanged. While these savings won’t transform your finances overnight, these reductions could put a little extra in your pocket. Here’s what you might save annually compared to today:
- $25,000 income: $68 (2026/27) or $136 (2027/28)
- $35,000 income: $168 (2026/27) or $336 (2027/28)
- $45,000+ income: $268 (2026/27) or $536 (2027/28)
Cost-of-living Support: Practical Measures
The Budget offers several initiatives to tackle rising costs:
- Energy Bill Relief: From July to December 2025, households and eligible small businesses will receive a $150 rebate ($75 per quarter) on electricity bills. It’s automatic—no paperwork needed.
- Student Loan Relief: Existing student loans (HELP, VET, etc.) will be slashed by 20% before the June 1, 2025 indexation. Plus, from 2025/26, repayments won’t kick in until your income hits $67,000, and only income above that threshold counts—a big win for graduates.
- Cheaper Medicines: From January 1, 2026, PBS scripts drop from $31.60 to $25, while pensioners and concession cardholders stay at $7.70 until 2030.
- Medicare Boost: Bulk billing incentives start November 1, 2025, aiming for nine out of ten GP visits to be bulk billed by 2030—great news for healthcare costs.
- Help to Buy Expansion: Later this year, this program could help more first-home buyers with equity contributions (up to 30% for existing homes, 40% for new ones) and higher income caps ($100,000 for singles, $160,000 for couples/single parents).
These measures could lighten your financial load—whether you’re paying off debt, raising a family, or saving for a home.
Social Security: Child Care Made Easier
From January 1, 2026, families will get at least three days (72 hours) of subsidised child care per fortnight without activity tests like work or study. Families meeting activity requirements or caring for First Nations children can still access 100 hours, provided income stays below $533,280 (2024/25 threshold). This could help working parents or those juggling priorities.
What’s Next?
Many of these proposals hinge on parliamentary approval, and with the 2025 Federal Election looming, time is tight. Will they become law? We’ll keep you posted. In the meantime, these changes could shift your financial planning—whether it’s adjusting your budget for tax savings, rethinking student loan repayments, or exploring home ownership options.
Disclaimer: The information in this article is general and does not consider your particular circumstances. We recommend specific tax or legal advice be sought before any action is taken and refer to the relevant Product Disclosure Statement before investing in any product. P3 Financial Planning Pty Ltd ABN 61 009 883 292 AFSL 464628
