Here are the winners and losers of the Federal Budget for 2025-2026.
The Federal Budget for the 2025-2026 financial year has been handed in earlier than usual with some pretty juicy promises (bait) before the upcoming federal election.
Following two strong years of budget surplus, a big election year and some tasty handouts have ruined the streak. The Labor government has forecasted a budget deficit of $27.6 billion in 2024-2025, and $42.1 billion for 2025-2026.
This is roughly 37% of Australia’s GDP, however, Australia’s federal debt is still fairly low compared to the rest of the world. For some perspective, the US federal debt has surpassed 120% of its GDP.
In this budget, we’ve got tax cuts, cost-of-living relief, student debt discounts, investment into healthcare, childcare benefits, plus more!
All Australians who pay tax will see a slight bump in their take home pay over the next two years. Earnings between $18,201 and $45,000, currently taxed at 16%, will be taxed at a reduced rate of 15% in 2026 and then further reduced to 14% in 2027.
For the average Australian earning a $79,000 salary, they will get back around $536 annually on their payslip, by the year 2027. It might be modest, but it’s still a win!
One of the biggest wins for Aussies will be the $8.5 billion investment into Australia’s healthcare system - the largest investment into Medicare since its creation 40 years ago.
Labor’s goal is to make 9 out of 10 GP visits free by the year 2030 by increasing Medicare rebates and increasing incentive payments to GPs that bulk-bill. This will apply to both metro and regional areas so no one misses out!
There’s also good news if you buy any PBS (pharmaceutical benefit scheme) listed medicines. Currently the maximum price for one of these medications is $31.60, but Labor wants to bring this down to $25 so that Aussies have easier and cheaper access to healthcare and medication they need.
The best part is, the Liberal party has promised to match this healthcare investment dollar-for-dollar if they win the election!
If re-elected, Labor has also promised to fund 400 nursing scholarships and commit to increasing the number of GP trainees by 2000 by the year 2028 to support the growing healthcare system.
Part of this healthcare investment will also include opening 50 new urgent care clinics, and funding to support women with their reproductive health and menopause.
As part of this new budget, the Labor government is dangling a carrot in front of young Australians, and that juicy carrot is a 20% discount to outstanding HECs-HELP balances on 1 June 2025.
This means a uni graduate with an average debt of $27,600 will save approximately $5,520. Additionally, the minimum repayment threshold will change from $54,435 in 2024-25 to $67,000 in 2025-26. All up, this will cost the government more than $500 million to deliver.
But that’s not everything, the Labor government has also promised to provide 100,000 fee-free TAFE places every year and make this scheme permanent nationwide, should they be re-elected.
If you’re a renter, home-owner, or you have a small business, then the government is tipping into your energy bill to help you out.
Remember when they did this last year and every Australian household saved $300 off their energy bill? Well the plan is to continue funding this rebate until the end of 2025 - which will save you an extra $150.
In most cases, you won’t need to do anything, the $75 discount per quarter will be automatically applied!
Need a couple days to get stuff done without a screaming toddler in tow? Well, if re-elected, the Labor government is guaranteeing 3 days of subsidised childcare to all Aussie families earning under $533,280.
The Labor government is proposing to remove the Activity Test, which currently requires both parents to be working / studying / looking for work for over 16 hours a fortnight, before they are eligible for subsidised childcare.
There’s also a commitment to building more than 160 childcare centres in areas “where they are needed the most”, and these changes are estimated to benefit 66,700 families in the first year alone.
Does owning your first property feel like a distant Aussie dream?
Should they be re-elected, the Labor government wants to broaden its “Help to Buy” property co-buying scheme so that more first home buyers can enter the market with less deposit and lower mortgage repayments.
Under this scheme, the government can own up to a 30% cut of an existing home (or 40% of a new build), which the home owner can buy out over time or pay off at the point of sale.
Key changes to eligibility requirements:
Despite these changes, there will still only be 10,000 places available each year and you must be a first home buyer to be eligible!
Beer drinkers and beer sellers, get your pints ready for a potential pause on the price of beer. Usually, the price of beer goes up in line with CPI twice a year (in Feb & Aug) and this cost is often passed onto beer drinkers.
But if re-elected, the Labor government has promised in the federal budget to freeze the indexation on the draught beer excise for the next 2 years.
That means the price of beer taxes will remain stable, so hopefully it means you can enjoy a pint at your local pub without prices hiking up for the next 2 years. Cheers to that!
After two years of surplus, Australia is back in the red and guess who will have to pay for it? Yep, you guessed it - the next generation. Whether that’s through income tax or spending cut backs (potentially less subsidies, incentives and social support), future governments will need to find a way to get back to surplus and this inevitably will affect our next generation of tax payers.
Despite many struggling under global inflation and rising cost of living, Job Seeker payments and rental assistance will not be receiving a top up.
If re-elected, Labor is also forecasted to spend $250 million less on the National Disability Insurance Scheme (NDIS) compared to the last budget forecast, in line with the government’s reform to make the scheme more financially sustainable.
Consultants working at firms like PwC, Deloitte, EY, and KPMG will receive less work from the government as the Labor party commits to saving $720 million instead of spending on consultants, labour hire and lawyers in 2028-29.
While the Labor party has denied that this is a budget to sway voters, it certainly has made some pretty big promises that may entice young and working class Aussies in the upcoming Federal election. But don’t get too excited! Until the votes are counted, the federal budget may still change from here.
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