The 2025-26 Federal Budget was announced by the Australian Treasurer, Dr. Jim Chalmers, on 25 March 2025. This budget is considered a crucial one because it comes just before the Federal Election in May 2025.
The measures in this budget rely on the Labor government’s re-election, and some may not go into effect if the government changes.
Our team of experts have digested the proposed budget and collated the summary on how it could affect you.
Webinar: Understanding the Impact of the Federal Budget on Your Business’s Cash Flow and Tax Strategy
Join us for an insightful and timely event, Understanding the Impact of the Federal Budget on Your Business’s Cash Flow and Tax Strategy, where TAG partners and seasoned professionals in business and tax, Brenda Hutchinson and Jean Jacquin, will break down the latest federal budget announcements and their direct impact on your bottom line.
Wednesday 2 April | 12pm – 12:30pm (AEST)
For Business
Small business depreciation — instant asset write-off threshold
The Treasurer announced in last year’s budget that the $20,000 instant asset write off for small businesses with an aggregate turnover of less than $10 million would be extended to 30 June 2025. There were no further announcements made in the current budget, and as it is not being further extended, the threshold will revert to the original $1,000 rather than $20,000.
Banning non-compete clauses
The government is planning to ban non-compete clauses for workers who earn less than $175,000. This means employers can’t prevent employees from working for a competitor after they leave. However, this change will not affect existing contracts and won’t take effect until 2027.
Support for apprentices
To help with the shortage of skilled workers, the government is offering up to $10,000 in incentives for apprentices working in housing construction from 1 July 2025. Employers who hire apprentices in areas of high demand could also receive up to $5,000 in support.
For Individuals
Cost of Living Relief
The government is focusing on easing the financial pressure on individuals.
This includes:
- Personal Income Tax Cuts for 2026 and 2027.
Increased Medicare Low-Income Thresholds, meaning more people will be eligible for cheaper healthcare. - Energy Bill Relief: Two quarterly offsets of $75 on electricity bills will be provided until December 2025.
- HELP Loan Relief: A 20% reduction in the outstanding balance of Higher Education Loans (HELP) will apply on 1 July 2025, easing the burden of student debt.
- Lower PBS Co-payment: From 1 July 2026, the cost of many medications under the Pharmaceutical Benefits Scheme (PBS) will drop from $31.60 to $25.
- Personal Income Tax Cuts for 2026 and 2027.
For Superannuation
Although there were no significant announcements of superannuation measures, there are still previously announced measures that will commence in 2025/26.
Tax on Unrealised Gains in Super:
There’s still a proposed tax on superannuation balances exceeding $3 million (Div 296 tax). While this hasn’t passed through Parliament yet, it’s expected that the government will push for it again if they win the next election. This will likely become a topic during the election campaign.
Payday super
Employers may soon be required to pay superannuation entitlements at the same time as wages, rather than quarterly. This is expected to start on 1 July 2026, making sure that employees’ super balances grow consistently with their income.
Superannuation guarantee rate
The Superannuation Guarantee (SG) rate, which is the amount employers are required to contribute to their employees’ super funds, will rise from 11.5% to 12% starting on 1 July 2025.
In summary, this budget is aimed at addressing the cost of living while supporting businesses and workers, with the government hoping to implement these measures if they are re-elected.
If you have any questions, please do not hesitate to contact us on 03 9886 0800 or email us at team@tagfinancial.com.au.
Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2025. Please do not reproduce without the expressed written consent of the author.