2025 Federal Budget Highlights

02/04/2025

Key Takeaways from the Australian 2025 Federal Budget

The Australian Government's 2025 Federal Budget, unveiled on March 25, introduced several significant measures aimed at addressing cost-of-living pressures, stimulating economic growth, and enhancing public services.

Here are key takeaways impacting individuals and businesses through tax cuts, energy bill relief, small business support, student debt relief, investments in infrastructure and healthcare.

Personal Income Tax Cuts

From July 1, 2026, the tax rate for income between $18,201 and $45,000 will decrease from 16% to 15%.
From July 1, 2027, this rate will further reduce to 14%.

(As an example, an individual earning $60,000 annually will see a combined tax cut of $1,715 by 2027-28 compared to the 2023-24 tax settings.)

Medicare Levy Threshold Adjustments

To support low-income earners, the Medicare levy low-income thresholds will increase by 4.7% from July 1, 2024:

Singles: Threshold rises from $26,000 to $27,222.
Families: Threshold increases from $43,846 to $45,907, with an additional $4,216 for each dependent child.

These adjustments ensure that over one million Australians on lower incomes remain exempt from paying the Medicare levy or continue to pay a reduced rate.

Energy Bill Relief

The budget allocates $1.8 billion to extend energy bill relief.

Every household and approximately one million small businesses will receive two $75 rebates directly applied to their electricity bills through December 31, 2025.

This initiative aims to mitigate rising energy costs and support both families and businesses.

Support for Small Businesses

Specific support for small businesses includes:

Energy Rebates: As mentioned, small businesses will benefit from direct energy bill rebates.

Infrastructure Investments: Significant funding is allocated for infrastructure projects, potentially opening new opportunities for businesses involved in construction, supply, and related services.

However, it's noteworthy that the instant asset write-off scheme, previously extended, was not addressed in this budget, leaving its future uncertain.

Student Debt Reduction

For clients with student loans, the government will implement a one-off 20% reduction to all HELP and student loan debts before the next indexation on June 1, 2025. Additionally, the minimum repayment threshold will increase from $54,435 in 2024-25 to $67,000 in 2025-26, easing repayment obligations for many graduates.

Infrastructure and Industry Investments

The budget outlines substantial investments aimed at bolstering infrastructure and key industries

Infrastructure Projects: An allocation of $15.6 billion over ten years for new infrastructure projects, including $7.2 billion for safety upgrades on the Bruce Highway in Queensland and $2.3 billion for projects in Western Sydney.
Green Energy Initiatives: Funding of $3.2 billion over 19 years to support the transition to low-emission technologies in the metals industry, including $2 billion for Green Aluminium Production Credits and $1 billion for the Green Iron Investment Fund.

Healthcare Enhancements

The government is investing in healthcare to improve accessibility and affordability:

Bulk Billing: An additional $7.9 billion is allocated to ensure that 9 out of 10 GP visits are bulk billed by 2030.
Pharmaceutical Benefits Scheme (PBS): The maximum cost of PBS medicines will be reduced from $31.60 to $25, making essential medications more affordable for Australians.

At Fincare Accounting, we are committed to helping you navigate these changes effectively. For personalized advice on how the budget may affect your financial situation or business operations, contact our team