The 2025 Budget - what this could mean for your money.
The government announced the Federal Budget on 25 March 2025, with a strong focus on reducing the cost-of-living burden. Let’s look at how the key Budget proposals may affect you.
Surprise!
After a late-night sitting in the Senate, the surprise tax cuts (approx. $5 a week), only just proposed in the Tuesday 25 March 2025 Budget, have now been legislated! The change means every taxpayer will take home up to $268 extra in the first year (2026) and $536 after that (2027).
Important!
Please remember, the Budget papers are just proposals and will usually require the passage of enabling legislation before any measures are implemented. The final version of any proposal may be different to what’s been originally proposed.
Here are the other the budget measures the Treasurer announced which may impact your finances.
Tax
Medicare levy low-income thresholds. These will be increased by 4.7 per cent for singles, families and seniors and pensioners. This means the Medicare levy will kick in at a higher level of income than previously, and that more than a million people on lower incomes will either be exempt from paying the levy, or pay a reduced levy rate.
Social security
Cheaper medicines. From 1 Jan 2026, the PBS general patient co-payments will be lowered from $31.60 to $25 per script, and remain frozen at $7.70 for pensioners. 80 per cent of PBS medicines will become cheaper for non-Safety Net patients, and there’ll be larger savings for 60-day prescriptions.
Job support & creation
Support for apprentices in housing construction. Eligible apprentices will receive up to $10,000 in financial incentives over the course of their apprenticeships. This effectively doubles the maximum amount apprentices would receive from the Australian Apprentice Training Support payment.
Employers of apprentices in priority occupations may be eligible for up to $5000 as a Priority Hiring Incentive.
Cost of Living
Energy Rebates
Energy bill relief will be extended for another 6 months to December 2025. That’s another $150 to every household and around 1 million small businesses.
Additional Medicare funding
This is an expansion of bulk billing incentive eligibility to cover more people when visiting the their GP for the most common services.
The Government proposes establishing the Bulk Billing Practice Incentive Program to incentivise more practices to bulk bill clients.
Other
Student loans
A reduction of all outstanding HELP and other student debts by 20% before the usual indexation calculation on 1 June 2025. Its projected that this will knock $16 billion from outstanding student loans.
Increase the threshold amount - what you can earn - before you are required to pay back these loans, from $54,435 in 2024–25 to $67,000 in 2025–26.
Compulsory repayments will be lower for people earning under around $180,000.
Housing affordability
$800 million to raise the income and price caps for the Help to Buy shared equity scheme (although it remains capped at 40,000 places over four years).
$54 million to accelerate the uptake of modern housing construction methods, including pre-fabricated and modular homes. There’s also an additional $120 million to incentivise states and territories to remove the red tape hindering the uptake of modern construction methods.
What has been previously announced?
Replacing the Child Care Subsidy (CCS) Activity Test from January 2026 to guarantee at least 3 days of subsidised early childhood education and care (ECEC) each week for children who need it.
From January 2026, all families will be eligible for at least 72 hours of subsidised ECEC/fortnight (3 days/week), regardless of their activity levels.
What didn’t change?
No “tinkering” with the superannuation system.
No changes to the contentious Div 296 tax proposal, which seeks to impose a new tax of an additional 15% on superannuation earnings of an individual with a $3 million or more total super balance
No extension to small business instant asset write-offs past 30 June 2025.
In the nick of time for small businesses
Instant asset write-off measures have now passed in both Houses as of 26 March. This extends the $20,000 instant asset write-off by 12 months until 30 June 2025 for eligible small business.
And also
Spending of $1.5 billion over 5 years in “decisions made but not yet announced” allowing for more election promises.
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