The Australian Federal Budget 2025-26 Highlights
On Tuesday, 25 March 2025, Treasurer Jim Chalmers presented the 2025–26 Australian Federal Budget, outlining significant updates to key economic forecasts. This budget impacts various sectors, including personal and business tax, banking, infrastructure, health, and climate change, shaping the Australian economy and its global standing.
Key Measures
The Financial Services Council (FSC) noted that there were “no surprises” for the financial services industry. A key measure included is the clarification of tax arrangements for managed investment trusts, ensuring legitimate investors can continue to access concessional withholding tax rates. This amendment, effective from 13 March 2025, complements the Australian Taxation Office’s strengthened guidelines to prevent misuse.
Additionally, the budget allocates $50 million over three years to extend the Tax Integrity Program, enabling the ATO to ensure timely payment of superannuation liabilities by Australian businesses.
Superannuation tax receipts have significantly contributed to a $9.4 billion upward revision in tax receipts over five years from 2024–25 to 2028–29, driven by stronger projected investment returns from super funds.
The budget’s sole superannuation measure, detailed in the Women’s Budget document, is the payday super reform, set to begin on 1 July 2026, with $404.1 million allocated over four years to support the reform.
The government’s “Future Made in Australia” agenda aims to drive economic transformation through cleaner, cheaper energy and job creation. The 2024–25 budget allocated $22.7 billion over a decade to support innovation, clean energy manufacturing, and investment. This includes funding for:
The current budget allocates over $3 billion to support the production of Australian-made green metals such as aluminium and iron.
A notable feature of the budget is the announcement of new tax cuts for every Australian taxpayer from 1 July 2026. These cuts are in addition to those legislated last year, which have been rolling out since 1 July 2024.
The new tax cuts will:
Housing is a key focus, with Labor pledging to increase total housing commitments to $33 billion, including:
The Help to Buy scheme is expanded with an $800 million commitment, enabling around 40,000 Australians to purchase homes with lower deposits and smaller mortgages.
Additionally, foreign buyers will be banned from purchasing existing homes for two years from April 2025, with:
Krishna Bhimavarapu, APAC economist at State Street Global Advisors, described the budget as “surprisingly more than a plain vanilla offering,” highlighting the surprise tax cuts and the government’s focus on productivity, clean energy, housing, defence, and infrastructure spending.
Financial Services Council chief executive, Blake Briggs, praised the Treasurer for addressing cost-of-living challenges and providing stability for the financial services industry.
However, the Super Members Council (SMC) criticized the government for not going far enough with superannuation reforms, particularly the outdated law affecting teen workers’ retirement savings.
The budget has set aside $40.8 billion in the contingency reserve for measures that are confidential or yet to be announced before the election, indicating additional business support may be on the horizon.
The ongoing Strategic Examination of R&D (SERD) suggests major innovation support changes will likely be delayed until the Review’s recommendations are released.
The budget reaffirms the government’s commitment to sustainability and economic transformation by investing in:
These investments support a transition to low-carbon production while ensuring Australia remains globally competitive.
The budget emphasizes:
Key measures include:
Energy bill relief measures will be extended for two more quarters, offering:
The government will invest $75.7 million over four years from 1 July 2025 to target non-compliance by individual taxpayers.
These measures aim to provide financial relief and support to both businesses and individuals, fostering economic stability and growth.
Access the following link for more information about the goals and priorities of the Federal Budget 2025-26: Budget.gov.au | Budget 2025–26
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