The 2025–26 Federal Budget was handed down on Tuesday, 25 March 2025 by Treasurer Jim Chalmers of the Albanese Government. After two consecutive surpluses, this year’s Budget marks a return to deficit, with a forecasted shortfall of $42.1 billion for 2025–26.
Key priorities in this year’s “election” Budget include:
- Personal income tax cuts across the two years commencing 1 July 2026
- Addressing Cost of living issues through further energy bill rebates
- Significant investment in Medicare (bulk billing, GP clinics, cheaper medicines)
- Expanded housing initiatives, including extending the Help to Buy scheme and banning foreign ownership of established dwellings
Below, we outline the main points relevant to individuals. Note that most of these measures will require legislation to pass through Parliament, which may be called upon imminently due to the upcoming Federal Election.
Tax
Keep more of what you earn with tax cuts: Few people like paying tax, and the Government plans to lower tax rates by a further 2% over the next two years. If these changes go ahead, every Australian taxpayer will receive a tax cut of up to $268 from 1 July 2026, increasing to $536 from 1 July 2027. Combined with the first round of tax cuts from 2024-25, this means you can save $2,229 in tax in 2026-27 and $2,548 in 2027-28. Or $50 a week.
Medicare Levy
Higher income limits for low-income Aussies From 1 July 2024, the Government is raising the low- income thresholds for the Medicare levy. This means more low-income earners, families, seniors, and pensioners won’t have to pay the levy – or will pay less. It’s part of a plan to help with the rising cost of living.
Energy
Keep your lights on with extended Energy Bill Relief If you’ve been loving the $300 that goes towards your house or small business energy bills, you can expect an extra $150 off your energy bill as of 1 July 2025. This will be received quarterly in the second half of 2025.
Healthcare
Get bigger Medicare rebates from GP visits: If you’ve ever balked at a GP bill or had to delay or cancel a visit due to out-of-pocket costs, these new Medicare rebates will mean you can go to the doctor when you need to. From 1 November 2025, the Medicare rebates for a standard GP consultation will increase to: $69.56 from $42.85 for metropolitan areas, and a maximum of $86.91 for remote areas.
Less out-of-pocket costs for GP visits: Current bulk billing is geared towards children under 16 and those with a concession card. As of 1 November, anyone that’s eligible for Medicare can look forward to bulk billing. This could mean that nine out of 10 of your GP visits will be free of out-of-pocket expenses by 2030.
Pay less for medicines as a Medicare card holder: The maximum cost of drugs on the Pharmaceutical Benefits Scheme (PBS) will be lowered for everyone with a Medicare Card and no concession card. From 1 January 2026, the maximum co-payment will be lowered from $31.60 to $25.00 per script and remain at $7.70 for pensioners and concession cardholders. Four out of five PBS medicines will become cheaper for general non‑Safety Net patients, with larger savings for medicines eligible for a 60‑day prescription.
More affordable urgent care: A further 50 Medicare Urgent Care Clinics will be set up, giving more Aussies access to bulkbilled, urgent care. Meaning more affordable options for you, and less pressure on hospital emergency departments.
Women
Better healthcare for women: Women’s health is in top focus, with more affordable options across different life stages. This includes everything from reproductive health to menopause. What women can look forward to:
- 150% increase in Medicare rebates and bulk billing for IUD insertion and removal
- Cheaper and more accessible oral contraceptives, as well as treatment for uncomplicated urinary tract infections
- Medicare rebates for menopause assessments
- PBS listings for both oral contraceptives and menopause hormone therapies, with around 150,000 women saving hundreds of dollars each year
Better wages for women: Aged care workers and childhood educators, a predominantly female workforce, can expect a boost to earnings in this sector. Gender equality will now sit under the Fair Work Act 2009 to ensure the work of women is not undervalued in female dominated industries.
More support and protection for domestic violence victims: The Government is investing $21.4 million over three years from 2025 to better support and protect women and children experiencing domestic violence. There will also be a strong focus on helping First Nations communities, with $21.8 million going towards prevention, early intervention, and response services between 2025 and 2026.
Education
Shave a further 20% off student debt: Student debt can hold many young Australians back, as they try to earn a living after uni. Students can look forward to a further 20% off their Higher Education Loan Program (HELP) debts before indexation is applied on 1 June 2025. Around 70% of people repaying a HELP debt are 35 or younger, which is a key time for saving, buying a home or starting a family. If passed, this one-off discount will benefit more than 3 million Australians. A uni graduate with an average debt of $27,600 will have $5,520 shaved off their outstanding loan.
Fairer repayments for all students: As a student, you will only be asked to start repaying your loan once you earn $67,000. And this will be based on a portion of your income, not your total income. This is up from the current repayment income threshold of $54,435. Anyone earning less than $180,000 will also pay lower compulsory repayments. These reductions will kick in on 1 July 2025. This means younger Aussies will have more disposable income, and lower income earners can build up their earnings, to repay their loan when they can afford it. That said, making smaller repayments earlier on could increase the amount of interest students pay over the life of their loan, leading to greater debt.
Childcare
Better childcare subsidies for all families: The cost of childcare means many parents, particularly mums, who either have to forgo their careers or contribute almost all of their salary to childcare fees. As of 5 January 2026, all families – except those earning more than $533,280 – will get 3 days of subsidised childcare per fortnight.
Housing
Increasing the housing stock: The government’s previously announced target of 1.2 million new homes over five years has seen 45,000 homes completed in the first quarter. The budget sees an extra $54 million to encourage modern construction methods and $120 million to help states and territories remove red tape. With building set to increase, more apprentices are needed, and the government has announced financial incentives of up to $10,000 to encourage more people to take up apprenticeships in building trades. Some employers may also be eligible for $5,000 incentives for hiring apprentices.
Co-buy your house with the Government: The “Help to Buy” scheme has been around since 2024 and allows first home buyers the chance to co-buy their property with the Government. This lowers deposit and mortgage repayments. The Government will now open this up to existing homes, offering 30% of the purchase price for an existing home and up to 40% of the purchase price for a new home. The income cap will be increased to $100,000 from $90,000 for single applicants, and $160,000 from $120,000 for couples and single parent applicants. The property price cap will also increase according to the median house price for the region ($1.3 million from $950,000 in Sydney).
Superannuation
No changes to super guarantee: The Government did not announce any major superannuation changes in the 25-26 Budget, and did not announce any changes to the timing of the final Super Guarantee increase. The Super Guarantee rate is currently legislated to increase from 11.5% to 12% on 1 July 2025.
The material contained in the 2025-26 Budget Update should be used as a guide in conjunction with professional expertise and judgement. All responsibility for applications of the 2025-26 Budget Update and for the direct or indirect consequences of decisions based on the 2025-26 Budget Update rests with the user. Priority Advisory Group expressly disclaim all and any contractual, tortious or other form of liability to any person in respect of the 2025-26 Budget Update and any consequences arising from its use by any person in reliance upon the whole or any part of the contents of this guide, without approaching us for specific advice. Note this update is not exhaustive, and Budget measures are subject to the passage of legislation