The Federal Government released its 2025-2026 Budget on March 25, with several measures aimed at addressing the rising cost of living.
However, all proposals remain subject to legislative approval, which is unlikely before the next Parliament is sworn in.
Key Measures
- Income Tax Cuts: From July 1, 2026, every taxpayer will receive an extra tax cut of up to $268. The tax rate for incomes between $18,201 and $45,000 will drop from 16% to 15% in 2026 and to 14% in 2027.
- Energy Rebates: Eligible small businesses will receive $150 in energy rebates from July 1 to the end of 2025, delivered in $75 quarterly payments—half of last year’s rebate amount.
- Non-Compete Clause Ban: From 2027, non-compete clauses will be banned for workers earning below the Fair Work Act’s high-income threshold (currently $175,000).
- Small Business Mental Health Support: Expanded assistance through the NewAccess for Small Business Owners program and Small Business Debt Helpline.
- Disaster Recovery Response: $1.2 billion allocated for financial assistance to individuals affected by disasters, including Ex-Tropical Cyclone Alfred.
Highlights
- Tax Reductions: Further reductions in the income tax rate for lower-income earners starting in 2026 and 2027.
- Disaster Relief: $693.2 million in co-funding with states to assist small businesses and not-for-profits impacted by disasters.
- Energy Bill Relief: Additional $150 energy rebate for households and eligible small businesses until the end of 2025.
- Student Debt Reduction: HELP debt will be cut by 20%, eliminating a total of $16 billion in student loan debt.
- HELP Repayment Threshold Increase: The repayment threshold for HELP loans will increase from $54,435 in 2024-25 to $67,000 in 2025-26.
Noteworthy Developments
- The government remains firm on implementing the Division 296 $3 million super tax, despite opposition.
- The Budget confirms that the government will take the controversial super tax policy to the election.
What’s Next?
On Thursday at 7:30 PM, Opposition Leader Peter Dutton will deliver his Budget Reply, offering an alternative vision for fiscal policy.
For tailored advice on how the Federal Budget impacts your financial and business decisions, reach out to KBD Professional today!