On Tuesday 26 March 2025, the Treasurer, Dr Jim Chalmers delivered the Albanese Government’s fourth budget. The Treasurer said this pre-election Budget was aimed as easing cost of living pressures and ensuring economic stability against a backdrop of increasingly uncertain global conditions.
Personal income tax
Applies from 1 July 2026
The Government announced that all Australian’s will receive a “top up” tax cut from 1 July 2026:
| Income Threshold | Current Rate (%)* | From 1 July 2026 (%)* | From 1 July 2027 (%)* |
|---|---|---|---|
| $0 - $18,200 | 0% | 0% | 0% |
| $18,201 - $45,000 | 16% | 15% | 14% |
| $45,001 - $135,000 | 30% | 30% | 30% |
| $135,001 - $190,000 | 37% | 37% | 37% |
| Over $190,000 | 45% | 45% | 45% |
*excluding 2% Medicare levy
This change is expected to give modest tax savings with the greatest proportional benefit being realised by low to middle income earners:
| Taxable income | Tax saving from 1 July 2026 v current | Tax saving from 1 July 2027 v current |
|---|---|---|
| $25,000 | $68 pa | $136 pa |
| $36,000 | $168 pa | $336 pa |
| $45,000 or more | $268 pa | $536 pa |
Superannuation
No new changes to super announced
The Budget did not contain any structural changes to the superannuation or retirement income system including no further announcements on the controversial Division 296 tax on unrealised capital gains for super balances above $3 million.
Reminder: Same-day super payments from 1 July 2026
In last year’s budget, the Government announced that from 1 July 2026, employers will be required to pay super contributions for their employees on the same day that they pay their salary or wage.
Other cost of living initiatives
Energy bill relief extension
Applies from: 1 July 2025
The Government has extended the energy bill measures originally announced in last year’s budget by an additional six months to 31 December 2025. Eligible households and small businesses will receive an additional $150 paid over two $75 quarterly payments.
Student debt reduction
Applies from: 1 July 2025
All outstanding HELP and other student debt amounts will be reduced by 20% from 1 July 2025.
In addition, from 1 July 2026, the income threshold above which repayments towards student debts must start being made will be increased from $54,435 to $67,000. In addition, the Government will apply a new method for calculating repayment amounts which it expects will result in lower repayments for those earning under $180,000 pa. Those earning above $180,000 should see no change in current repayment requirements.
Help to Buy Scheme eligibility expanded
Applies from: 1 July 2025
Income caps applying to the help to buy scheme will be increased to $100,000 for singles and $160,000 for couples and single parents. In addition, the property price caps will also be increased across all states and territories. Click here to read our full fact sheet on the Help to Buy Scheme.
Social security and age pension deeming rates frozen
Applies from: 1 July 2025
Although not specifically mentioned in the Budget, the Government has confirmed it will continue to freeze the deeming rate (0.25% on first $62,600 of financial assets and 2.25% above this) applied to financial investments for social security and age pension payment recipients.
Medicare
Applies from: 1 July 2025
The Government has announced that co-payment rate for medicines under the PBS will be reduced from $31.60 to $25.
