The Australian Federal Budget for 2025–26, unveiled by Treasurer Jim Chalmers on March 25, 2025, introduces a series of measures aimed at alleviating cost-of-living pressures, enhancing healthcare, and promoting housing affordability.

Tax Reforms

A central feature of the budget is the introduction of two new tax cuts for all Australian taxpayers. Starting July 1, 2026, the tax rate for income between $18,201 and $45,000 will decrease from 16% to 15%. This rate will further reduce to 14% from July 1, 2027, marking the lowest first tax rate in over half a century. These adjustments are projected to provide taxpayers with an additional annual saving of up to $268 from 2026 and up to $536 from 2027.

Energy Bill Relief

To address rising energy costs, the government is extending energy bill relief measures through December 31, 2025. Every household and approximately one million small businesses will receive two $75 rebates directly applied to their electricity bills. This initiative, costing around $1.8 billion, builds upon the nearly $5 billion in bill relief provided previously.

Healthcare Investments

The budget allocates an additional $8.5 billion over four years to strengthen Medicare. This funding aims to make nine out of ten GP visits free by 2030. Furthermore, $689 million is designated to reduce the maximum price of medicines on the Pharmaceutical Benefits Scheme (PBS), potentially saving Australians an estimated $200 million each year.

Housing Affordability and Support for Renters

In response to housing affordability challenges, the government is enhancing the Help to Buy scheme and increasing the maximum rates of Commonwealth Rent Assistance by 45%, benefiting around one million households.

Education and Student Debt Relief

The budget introduces measures to reduce student debt, including a 20% reduction to all existing HELP and student loan debts. This initiative aims to ease financial burdens on graduates and stimulate economic participation.

Opposition’s Response

Opposition Leader Peter Dutton has criticized the government’s tax cuts, labelling them misleading due to bracket creep, which could negate the intended benefits. The opposition proposes alternative measures, including halving the fuel excise for a year and implementing a National Gas Plan to lower energy costs. Additionally, they advocate for significant defence funding, investments in youth mental health services, and a 25% reduction in migration to increase housing supply.

Overall, the 2025–26 Federal Budget focuses on providing immediate cost-of-living relief while investing in long-term initiatives to enhance healthcare, education, and housing affordability for Australians.