Federal Budget Unveiled: A Quick Breakdown

The 2025/26 Federal Budget – what does that mean for you? We have sat down as a team and highlighted some of the key measures as outlined by the Treasurer on Tuesday night.

Queensland Measures

- A significant allocation of $7.2 billion is designated for the Bruce Highway. This funding aims to enhance the connectivity, safety, and efficiency along this critical corridor. A win for North Queensland as this highway is in desperate need of improvement.

- Co-sponsored with the states $30 million to support council clean-up activities

- Provided one-off business continuity payments of $10,000 to child-care subsidy approved services closed or partially closed for 8 days or more.

Income Tax

- The Instant Asset Write Off has not been extended in a massive blow for business. The measure which allows eligible businesses to claim equipment purchases up to $20K per item as an outright tax deduction reduces back to asset values of just $1K from 1 July 2025. This would be a horrible result for business as all equipment purchases and upgrades costing more than $1K per item will need to be depreciated.

- Starting 1 July 2026, the tax rate for income between $18,201 and $45,000 will decrease from 16% to 15%. This rate will further reduce to 14% from 1 July 2027.  This will result in a tax saving for all Australians earning more than the Tax-Free Threshold – albeit not a large tax saving.

- Increases to the Medicare Levy low-income thresholds, including:

o Singles: from $26,000 to $27,222

o Families: from $43,846 to $45,907

o Family income thresholds will increase by $4,216 for each dependent child or student, up from $4,027

o Single seniors and pensioners: from $41,089 to $43,020

o Family seniors and pensioners: from $57,198 to $59,886

Business

- To alleviate operational costs, the government is extending energy bill relief for small businesses. Every household and approximately one million eligible small businesses will receive up to $150 in rebates directly off their bills. This measure will last six months until the end of 2025.

- A proposal to ban on non-compete clauses in employment contracts for workers earning less than $175K. This measure aims to enhance labour market flexibility, allowing workers to transition between jobs more freely and will be a big shake up as this is a commonly used provision in employment contracts.

- The government has pledged almost $1 billion to the Australian Taxation Office over the next four years to extend and expand compliance activities. Although the target is predominantly multinationals and large taxpayers there has been a lot of increase in activity from the ATO across taxpayers at all levels.

Employment

- To address labour shortage in the housing construction sector, the government has announced increased incentives for apprentices:

o Eligible apprentices can receive up to $10,000, doubling the previous incentive

o Employers hiring apprentices in key trades are eligible for up to $5,000 through the priority hiring incentive

-  Aged care sector will receive additional funding of $2.6 billion over five years to boost wages of aged care nurses. This funding is effective from 1 March 2025, and benefits approximately 60,000 workers nationwide. An additional $90 million is designated for other aged care workers.

- Early childhood education sector will receive funding of $3.6 billion for wage increases through the worker retention program. This measure is expected to benefit up to 200,000 early childhood educators.

Cost-of-Living

In addition to measures listed above, the government has presented the following initiatives:

-  20% reduction in student debt. This initiative, pending legislative approval, is set to take effect 1 June 2025. An individual with an average student debt of $27,600 would see a reduction of about $5,520 in their loan balance.

-  Repayment thresholds for student debt will also be raised from approximately $54,000 to $67,000.

-  Enhance healthcare accessibility and affordability, the government is investing $7.9 billion to strengthen Medicare. This funding focuses on expanding bulk billing, ensuring more Australians can access free general practitioner services.

- Invest $784.6 million over four years from2025/26 is allocated to reduce the maximum cost of medicines listed in the Pharmaceutical Benefits Scheme from $31.60 to $25.

Additional funding of $426.6 million for the new 3 Day Guarantee for childcare subsidy.  This will ensure families are eligible for at least 3 days a week of subsidised early childhood