2025-2026 Federal Budget Summary

The 2025-26 Australian Federal Budget was handed down by Federal Treasurer Dr Jim Chalmers on Tuesday 25 March 2025 from Parliament House in Canberra.  Below are  some of the Key Takeaways from the 2025-26 Federal Budget.

Tax Concessions

• Modest Income Tax Cuts: A small two-stage tax cut will commence from 1 July 2026

Increased Medicare levy low-income thresholds

• Medicare levy low-income threshold amounts will increase
• The increase to the thresholds ensures that low-income individuals continue to be exempt from paying the Medicare levy or pay a reduced levy rate.

Energy Bill Relief

• Support for Households and Small Businesses: Eligible householders and small businesses will receive an additional $150 to help offset rising energy prices.

Missed Opportunity: Instant Asset Write-Off

• Despite industry calls, the government has chosen not to make the instant asset write-off permanent.

Economic and Fiscal Outlook

• GDP Growth and Inflation: Australia’s real GDP is projected to grow by 2.25%, while inflation is expected to average 3% in 2025-26.
• Rising Budget Deficit: The deficit is forecast to increase to $42.1 billion in 2025-26, up from $27.6 billion in 2024-25.

Funding for Tax Cuts

• The upcoming income tax cuts may be partly financed by higher-than-expected tax receipts collected over the past six months.

Enhanced Tax Compliance Measures

• The Australian Tax Office will receive an additional $1 billion over four years to strengthen tax compliance efforts.

Global Trade Impact

• Treasury anticipates that global tariffs applied by the US will have a limited effect on Australia, with only a 0.1% projected impact on GDP in 2025-26.

Making student loans fairer

• Reduce all outstanding Higher Education Loan Program (HELP) and other student debts by 20%.
• This is in addition to the recent indexation reforms.
• The amount that people can earn before they are required to start paying back their loans will increase.

Expansion to Help to Buy scheme for first home buyers

• Under the Help to Buy scheme, the Government will provide an equity contribution of up to 40% to support eligible home buyers to purchase a home with a lower deposit and smaller mortgage.
• Income and property price caps will be increased

Source: https://www.cpaaustralia.com.au/

https://ntaa.com.au/