The 2025/26 Federal Budget brings a mix of tax cuts, business relief, and regulatory reforms aimed at easing cost-of-living pressures and strengthening Australia’s economy. Whether you’re an individual taxpayer or a small business owner, here’s a quick look at what matters most.
Tax Relief for Individuals
From 1 July 2026, the 16% tax rate on incomes between $18,201 and $45,000 will drop to 15%, then to 14% in 2027. That means tax savings of up to $268 in 2027 and $536 by 2028.
The Medicare levy threshold has also increased—single individuals earning under $27,222 won’t pay the levy at all in 2025, with higher limits for families and seniors. This brings welcomed relief, especially amid rising living costs.
Student Debt and HELP Repayments
Student loan holders will benefit from a 20% debt reduction, pending legislation, on top of previous indexation reforms. Even better, the repayment threshold is increasing to $67,000 in 2026—allowing more time before repayments kick in.
Energy Relief for Households and Small Businesses
Eligible households and small businesses will receive two $75 rebates off electricity bills through 2025, offering modest yet meaningful help in managing utility costs.
Housing Access and Affordability
The Help to Buy scheme is expanding, with income caps raised to $100,000 for individuals and $160,000 for joint applicants, and price caps linked to average state prices. This opens homeownership to more first-time buyers.
Meanwhile, a two-year ban on foreign purchases of established homes (starting April 2025) aims to boost housing availability for locals, alongside new compliance efforts to reduce land banking.
Banning Non-Compete Clauses
To support worker mobility, non-compete clauses will be banned for those earning under $175,000. This includes actions to stop businesses from using “no-poach” and wage-fixing agreements—empowering employees and encouraging fairer labor practices.
Support and Protection for Small Businesses
The Budget allocates $12 million over four years to support small businesses and franchisees. Key initiatives include:
- Better enforcement of the Franchising Code of Conduct
- Stronger action against illegal phoenixing, especially in construction
- A new Social Enterprise Loan Fund for purpose-driven businesses
- Exploring unfair trading protections for small business contracts
Boosts for Hospitality and Alcohol Producers
Hospitality venues, brewers, distillers, and wine producers can breathe a little easier. The Government will pause draught beer excise indexation for two years (from August 2025) and increase the annual cap on excise and wine rebates to $400,000—a boost for local industry.
Cracking Down on Tax Avoidance and Scams
The ATO is getting nearly $1 billion over four years to expand its fight against the shadow economy, under-reported income, and large-scale tax avoidance. This ensures fairer competition and protects revenue.
Also, the National Anti-Scam Centre gets an extension to help protect consumers and businesses from rising scam threats.
Takeaway:
From individual tax cuts to small business protections and energy relief, the 2025/26 Budget is a multi-layered response to economic pressure and structural reform. Whether you’re filing a tax return, hiring staff, brewing beer, or buying a home—these changes could directly affect your financial decisions.
Need help understanding what it means for your specific situation? Please give us a call to make an appointment so we can help you understand it.
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