The 2025 Federal Budget focuses on delivering cost-of-living relief through tax cuts, lower energy costs, support for healthcare and education, and housing assistance. While many proposals still require legislative approval, they present potential opportunities and considerations for Australians across different life stages. Below is a summary of the key announcements, and how they may affect your financial position.

Taxation Changes

Personal Income Tax Cuts (From 1 July 2026)
Taxpayers can expect modest tax cuts, particularly at lower income levels. The 16% marginal tax rate on income between $18,201 and $45,000 will reduce:

• To 15% from 1 July 2026

• Then to 14% from 1 July 2027

There are no changes to other tax brackets or thresholds. Estimated annual tax savings include:

• $25,000 income: $68 (2026/27) rising to $136 (from 2027/28)

• $35,000 income: $168 (2026/27), $336 (2027/28+)

• $45,000+: $268 (2026/27), $536 (2027/28+)

Planning Tip:
While the savings may seem modest, they can be factored into future budgeting, savings plans or superannuation contribution strategies.

Cost of Living Support

Energy Bill Relief
All households will automatically receive a $150 electricity rebate from 1 July to 31 December 2025, paid in two $75 quarterly instalments. Small businesses may also be eligible under existing criteria.

Student Loan Reforms

• A 20% reduction in outstanding student loans will be applied before indexation on 1 June 2025.

• From 2025/26, the repayment threshold increases from $54,435 to $67,000, and repayments will apply only to income above this threshold.

PBS Medicine Cost Cap
From 1 January 2026, the maximum cost of PBS medicines will fall from $31.60 to $25 per script. Concession cardholders will continue to pay $7.70 until 2030.

Medicare Bulk Billing Expansion
From 1 November 2025, new incentives aim to increase access to bulk billing for all Australians, with a goal of nine out of 10 GP visits being bulk billed by 2030.

Housing Assistance

Help to Buy Scheme Expansion
The government will provide an equity contribution of:

• Up to 30% for existing homes

• Up to 40% for new homes

Income thresholds will rise:

• Singles: $100,000 (up from $90,000)

• Couples/single parents: $160,000 (up from $120,000)

Planning Tip:
This may present a strategic opportunity for eligible first-home buyers or those seeking to enter the property market sooner with less deposit.

Child Care Subsidy Reform

A ‘3-day guarantee’ of subsidised Early Childhood Education and Care (ECEC) will be introduced from 1 January 2026, regardless of activity test requirements (e.g., working, studying, volunteering).

Families must still meet income thresholds (up to $533,280 for 2024/25) and may be eligible for more hours under other criteria.

What to Consider Next

Many of these proposals are not yet law and may be impacted by the upcoming Federal Election. Nonetheless, now is a good time to:

✅ Review your cash flow and budget ahead of expected tax cuts
✅ Consider super contributions or savings strategies to take advantage of lower personal tax
✅ Evaluate eligibility for housing or student loan support
✅ Plan ahead for healthcare and family expenses with expected relief in PBS and childcare costs

Cadre Capital Partners can help you model the impact of these changes and align your strategy with evolving policy and legislation.