Gemma Dale unpacks the keys measures of the Budget and what they mean for you.

The Federal Government handed down its 2025-2026 Federal Budget on the evening of 25 March. As with all Budgets, all of the measures announced are subject to the passage of legislation, and with an election looming, that is unlikely to occur until a new Parliament has been sworn in.

Tax Cuts

With that in mind, Treasurer Jim Chalmers has announced a number of measures aimed at the rising cost of living. The first is something of a surprise – a modest tax cut for all taxpayers, reducing the lowest marginal tax rate from 16 per cent rate to 15 per cent on 1 July 2026, and a further reduction to 14 per cent from 1 July 2027. This rate applies for all income earned between $18,201 and $45,000, which amounts to a cut of up to $268 a year from next July, and up to $536 a year from mid 2027.

Medicare

As with every year, the Medicare levy low income threshold will be increased; the changes below will take effect for the current financial year.

Cost of living

As expected, the current electricity subsidy will be extended, with the $75 quarterly rebate remaining until the end of 2025, at a cost of $1.8 billion.

There’s a strong focus on healthcare funding with the Government lowering the maximum cost of medicines on the Pharmaceutical Benefits Scheme (PBS) for everyone with a Medicare card and no concession card. From 1 January 2026, the maximum copayment will be lowered from $31.60 to $25.00 per script and remain frozen at $7.70 for pensioners. There is also additional funding to encourage bulk billing with an estimate that 9 out of 10 GP visits will be bulk billed by 2030.

The Government will reduce all outstanding Higher Education Loan Program (HELP) and other student debts by 20 per cent, subject to the passage of legislation. This will affect around 3 million Australians, and is in addition to the indexation cuts that have previously reduced outstanding loan repayments.

The Government will also increase the amount that people can earn before they are required to start paying back their loans from $54,435 in 2024–25 to $67,000 in 2025–26. No one will pay more under the new system, and compulsory repayments will be lower for people earning under around $180,000 and above the current minimum threshold.

For those looking to buy a home, the Help to Buy scheme for first homebuyers will be expanded, increasing the property price and income caps to make the scheme more accessible.

There is also a proposed ban on non-compete clauses for those earning up to $175,000 a year, with the intention of allowing them to move employers or establish their own business. This is based on analysis suggesting these clauses are reducing productivity and capping wage growth for affected employees. There will be consultation on measures for higher income earners and non-solicitation clauses.

Childcare

And finally childcare, where parents will be guaranteed a minimum of three days of subsidised childcare regardless of how much they work or study — provided they don’t earn more than $533,280 per annum. This is to take effect from January next year and abolishes the activity test established in 2018.

No changes to superannuation were announced.

All in all, just a few surprises, and all subject to the passing of legislation.

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