2025/2026 Federal Budget
Treasurer Jim Chalmers has delivered a Budget with a clear mission—ease cost-of-living pressures, strengthen essential services, and future-proof Australia’s economy—while throwing in a surprise $17 billion tax cuts to sweeten the deal.
With the next Federal Election looming, this Budget is as much about immediate relief as it is about long-term vision. Here’s what you need to know.
Tax Cuts & Cost-of-Living Relief
Tax Savings on the Way
The big surprise? 17 billion in staged tax cuts kicking in from 1 July 2026 and 1 July 2027. Once fully rolled out, the average worker will save 536 per year.
Energy Bill Relief Extended
Every household and one million small businesses will get $150 off their electricity bills in two instalments before the end of 2024. The government claims this has helped reduce power prices by 25.2% this year.
Student Debt Slashed
A massive $19 billion cut to student loans, with all outstanding debts reduced by 20%. Plus, reforms to make repayments fairer—good news for graduates feeling the pinch.
Cheaper Medicines & Stronger Medicare
- PBS co-payment cap drops from 31.60to31.60to25 per script (from 2026) for non-concession cardholders.
- $8 billion to expand bulk billing—the most significant Medicare investment in 40 years, aiming for 90% of GP visits bulk-billed by 2030.
- 50 new Urgent Care Clinics (137 total) and $1.8 billion for public hospitals to cut waiting times.
Crackdown on Supermarket & Banking Fees
The government is taking on “unfair” card surcharges and supporting fresh food suppliers to fight price gouging.
Housing: More Homes, Fewer Barriers
1.2 Million New Homes Target
So far, 45,000 homes have been built in the first quarter. To speed things up:
- $54 million for modern construction methods
- $120 million to cut red tape in planning approvals
Help to Buy Scheme Expanded
An extra $800 million to widen eligibility, helping more first-home buyers enter the market with lower deposits.
Foreign Buyer Ban
From 1 April 2025, foreign investors will be banned from buying existing homes for two years—a move to boost supply for locals.
Economic Resilience in a Volatile World
Deficit & Debt Update
- $42.1 billion deficit—smaller than forecast
- Gross debt down by 177 billion (saving 60 billion in interest over a decade)
Global Challenges Ahead
- Trade wars, China’s slowdown, and overseas conflicts pose risks
- But Australia’s economy is outperforming most advanced nations, with inflation easing and wages growing
Future Made in Australia
A $22.7 billion investment in:
- Renewable energy & critical minerals
- Hydrogen and green metals production
- Expanded Clean Energy Finance Corporation
Plus, $20 million for a “Buy Australian” campaign—backing local businesses.
Disaster Recovery & Future-Proofing
Cyclone & Flood Support
Recent disasters in QLD and NSW will shave 0.25% off GDP growth. The Budget includes:
- $1.2 billion contingency fund for future emergencies
- $13.5 billion in disaster recovery support
The Bottom Line
Treasurer Chalmers calls this a “plan for prosperity in uncertain times”—one that tackles inflation while setting up Australia for a stronger future.
Key wins? Tax cuts, cheaper healthcare, housing boosts, and a major clean energy push.
Challenges? Global instability and stubborn cost-of-living pressures.
Note: Policies are pending legislation and may change.
