Key Takeaways From The 2025-26 Australian Federal Budget

The Australian Government’s 2025-26 Federal Budget, unveiled earlier this week, has certainly grabbed attention with its proposed personal income tax cuts. The tax savings will be gradual, with up to $268 in savings for individuals in the 2026-27 year, and up to $536 from 2027-28 onwards.

The Government has allocated almost $1 billion to the Australian Taxation Office (ATO) to enhance its compliance programs. While this is aimed at improving the integrity of the tax system, businesses and individuals alike should be prepared for an increased focus on compliance as the ATO ramps up its efforts to ensure tax obligations are met.

Other Key Budget Measures You Should Know About

• Tax on Super Accounts Over $3 Million: The proposed 30% tax on future earnings for superannuation balances above $3 million is still under consideration. If passed, it would affect high-balance super accounts, potentially reshaping the landscape of superannuation for some investors.
• Small Business Support: The $20,000 instant asset write-off for small businesses remains in the Budget for the 2024-25 financial year. While the measure has not yet passed Parliament, it could provide a valuable tax incentive for businesses investing in assets to grow their operations.
• Healthcare and Education Initiatives: The Government has allocated $8.5 billion for Medicare, including funding for 50 new urgent care clinics and bulk-billed GP services. On the education front, $500 million will go towards reducing HECS-HELP debt and adjusting repayment schedules, helping students manage their debts more effectively.
• Energy and Housing Relief: There’s also $180 billion dedicated to extending the $150 energy bill rebate until the end of 2025, alongside $800 million for the "Help to Buy" housing scheme, making it easier for Australians to step onto the property ladder.

Economic Outlook: Slow Growth and Ongoing Deficits

The Australian economy is projected to grow at a modest pace, with GDP growth forecasts at 2.25% for 2025-26 and 2.5% for 2026-27. While employment remains strong, with over one million jobs added since May 2022, the country is still facing a budget deficit of $42.1 billion in 2025-26. Public debt is expected to rise as a result, reaching 21.5% of GDP by 2025-26.

Despite these challenges, the Government has also put forward measures to assist with the rising cost of living, including energy rebates and initiatives aimed at reducing inflation.

What Does This Mean for You?

Whether you’re an individual looking to take advantage of the tax cuts, a small business seeking clarity on asset write-offs, or someone looking to benefit from the energy rebates or housing support, the 2025-26 Federal Budget is likely to affect you. If you need advice on tax planning, superannuation, or any of the new measures, our team of experts is here to assist.



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