Last night, the Federal Government delivered its annual Budget, outlining its spending priorities for the 2025/26 financial year.
The biggest budget announcement was a $268 tax cut for Australians earning above $45,000.
The Budget also outlined a ban on non-compete and ‘no-poach’ clauses which block workers from switching jobs within certain industries.
An election is due by 17 May, meaning a change of government could upend some of these funding pledges.
Tax cuts
The Government announced its plan to give every taxpayer an income tax cut.
It plans to cut the tax rate for the lowest income tax bracket, between $18,200–$45,000, if it’s re-elected.
Currently, the rate of tax in that bracket is 16 cents for every dollar. That will come down to 15 cents a dollar from 1 July 2026, and then 14 cents in July 2027.
It will mean anyone earning above $45,000 will pay $268 less in tax a year from next July.
The Government has also extended the energy bill rebate, which will see an extra $150 discounted from most power bills.
Under the measure, $75 will automatically be deducted from the next two quarterly power bills.
Every individual household and a million small businesses will be eligible for the discount.
The Coalition has confirmed it will match Labor’s power bill relief if it wins the upcoming election, due by 17 May.
Renting
The Government said it plans to implement a framework called “A Better Deal For Renters,” which will target evictions and rental increases.
This will involve meetings with state and territory leaders on regulatory reform.
Finance Minister Katy Gallagher told TDA the Federal Government “can’t regulate the rental markets,” but said it will “use its leverage” to negotiate with the states and territories for renters.
Health
The Government has increased funding for Medicare, the national health insurance scheme. This includes $8.5 billion until 2030 to increase the bulk billing rate, encouraging GPs to bulk bill all patients.
Earlier this month, the Government also announced the maximum cost of medications listed on the Pharmaceutical Benefits Scheme, which are medicines subsidised by the government, will drop from $31.60 to $25.
The Coalition has promised to match both Medicare funding commitments.
Mental health
The Budget also included $46 million over the next four years to continue funding digital mental health services.
This includes $14.8 million over the next financial year for free online mental health platforms. These free or low-cost digital services don’t require a referral, meaning access to support is open to anyone.
Some of the digital platforms tailor their mental health supports for “cohorts at a higher risk of mental-ill health,” including First Nations communities and gender diverse people.
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The Government wants to ban non-compete and ‘no-poach’ clauses uses for most workers, under a broader budget measure.
Non-competes prevent workers switching jobs within certain industries. ‘No poach’ clauses stop staff from being hired by competitors.
The Government estimates a ban on non-compete clauses would lift an impacted worker’s wage by 4% a year.
The government will legislate the ban if it wins the upcoming election, due by 17 May.
Aged care workers and early childhood educators are both slated for pay increases, which both require Government funding.
Ahead of the Budget, the Government announced a $10,000 bonus for construction apprentices from July.
The measure is expected to cost $630 million over the next four years.
Education
If Labor wins the upcoming election, it has promised to reduce higher student loan debts by 20% before indexation in July.
The measure is estimated to wipe $16 billion off student loans, according to the Government.
Additionally, the Government has struck deals with all state and territory governments to fully fund public schools by 2034.
The Budget estimates this will cost $7.6 billion in total.
First Nations
In 2008, the Federal Government introduced the Closing the Gap targets “to overcome the entrenched inequality” faced by First Nations people. Four of 19 are currently on track.
In Tuesday’s Budget, the Government announced funding to reach these targets, including $21.8 million to domestic and sexual violence services “for First Nations women, children and communities.”
Additionally, the Government will spend $33.6 million over two years to support First Nations boys to stay in school.
Women
Minister for Women Katy Gallagher told TDA the Government is “not having the impact we would like to see,” when it comes to women’s safety.
However, she pointed to the Government’s investment in legal centres as proof of its commitment — $737.7 million of Budget funding is going to community, First Nations, and women’s legal centres.
The Government will also fund state-based supports for victim-survivors in the justice system, expanding trials in Victoria, WA, and the ACT.
Housing
The Budget includes an additional $1 billion for housing, taking the Government’s total commitment to $33 billion.
To facilitate its goal to build 1.2 million new homes by 2030, the Government has announced $49.3 million, “to scale up existing projects for prefabricated and modular housing construction.”
These homes are built in sections off-site before being assembled at a property.
According to the Government, they can be built up to 50% faster than traditionally constructed homes.
