2025/2026 Federal Budget Summary

Federal Budget 2025: Key Takeaways and Insights

On March 25, 2025, Treasurer Jim Chalmers delivered the fourth Federal Budget for the Albanese Government. This year’s budget primarily focuses on cost-of-living relief measures, with less emphasis on significant tax reforms. Here’s a summary of the key measures announced that may impact you:

 

Personal Measures:

• Tax Cuts: If re-elected, the Government plans to reduce the 16% marginal tax rate to 15% starting July 1, 2026, and further to 14% from July 1, 2027.
• Tax Savings: A worker earning the average wage or above will see tax savings of $267.99 in the 2027 financial year and another $267.99 in 2028, totaling a $535.98 reduction by 2028.
• Medicare Threshold Increase: For the 2024/25 financial year, the low-income Medicare threshold will rise to $27,222 for singles (up from $26,000) and $45,907 for couples with no children (up from $43,846).
• Medicare Expansion: The Government has committed to substantial funding aimed at expanding Medicare, improving access to bulk-billed GP services, and reducing out-of-pocket expenses for individuals.
• Energy Bill Rebate: The energy bill rebate introduced in the 2024/25 budget will be extended for another year. In 2025/26, the rebate will be $150 (down from $300 in 2024/25).

 

Business Measures:

• Small Business Concession: The $20,000 instant asset write-off for small businesses will not be extended beyond the 2024/25 financial year. Businesses will need to capitalise all purchases over $1,000 going forward.
• Non-Compete Clauses: Starting in 2027, non-compete clauses in employment contracts for employees earning less than $175,000 will be banned.
• Business Energy Rebate: Like individuals, businesses will receive a $150 energy bill rebate for the 2025/26 year.

 

Superannuation Measures:

• No New Reforms: No new superannuation reforms were announced in this year’s budget.

 

International Measures:

• Capital Gains Tax for Foreign Residents: The implementation of the expanded Capital Gains Tax for foreign resident taxpayers, announced in the 2024/25 Federal Budget, has been deferred until the legislation is formally enacted.
• Foreign Purchases of Residential Properties: Starting April 1, 2025, a two-year ban will be imposed on foreign individuals (including temporary residents and foreign-owned entities) purchasing established residential properties.

This summary provides a snapshot of the Federal Budget measures that could impact individuals, businesses, and international stakeholders. For more details on specific policies, please stay tuned for updates as they unfold.