The Federal Budget for 2025/26 was handed down by the
Treasurer Dr Jim Chalmers at 7.30 pm (AEST) 25 March 2025.
Guided by 5 main priorities, including helping with the cost-of-living, building more homes and investing in education, the Budget includes 2 new personal tax cuts for all Australian individual taxpayers, increased Medicare levy thresholds, a ban on foreign individuals buying existing homes and a proposed reduction to student debts.
Being the government’s last Budget before the expected federal election, the start dates of a number of previously announced but unenacted tax measures have been deferred until amending legislation is enacted.
Described by the Treasurer as a “plan for a new generation of prosperity in a new world of uncertainty”, the Budget did not include any new measures affecting the taxation or regulation of superannuation or new income tax measures affecting small businesses.
For our full Budget analysis please refer to our detailed report found via this link:
Full Detailed Federal Budget Report
Federal Budget Highlights
Individuals
- The marginal tax rate for the personal income tax threshold bracket from $18,201 to $45,000 will be reduced from 16% to 15% from 1 July 2026 and further reduced to 14% from 1 July 2027.
- The Medicare levy low‑income thresholds for singles, families, and seniors and pensioners will be increased from 1 July 2024.
- Student loan debts will be cut by 20% and other reforms will be made to the student loan repayment system from 1 July 2025.
- The start date of the 2024–25 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after assent.
- Foreign ownership of housing will be restricted.
Superannuation
- No major new superannuation measures were announced. The Government did, however, allocate additional funding for the ATO Tax Integrity Program, which aims to recover $31 million in unpaid superannuation from businesses and wealthy groups over five years starting in 2024-2025.
- Uncertainty remains around the proposed Division 296 regime, which targets superannuation account balances above $3 million from 1 July 2025. The legislation is still before the Senate and the outcome may depend on the outcome of the federal election with likely implementation delays.
Tax administration
- Rules on managed investment trusts will be amended to ensure legitimate investors can continue to access concessional withholding tax rates from 13 March 2025.
- The ATO will be given $999 million in funding over 4 years to extend and expand its tax compliance activities.
Tax agents
- Tax practitioner regulation and compliance will be enhanced by strengthening sanctions available to the Tax Practitioners Board and modernising the registration framework.
Not-for-profits
- The deductible gift recipients list will be updated.
Indirect taxes
- Indexation on draught beer excise and excise equivalent customs duty rates will be paused for a 2‑year period from August 2025.
- The excise remission cap is proposed to be increased from $350,000 to $400,000 each financial year for all eligible alcohol manufacturers from 1 July 2026. The Wine Equalisation Tax producer rebate would similarly increase from $350,000 to $400,000 each financial year from 1 July 2026.
Please do not hesitate to contact your Blaze Acumen advisor if you would like to discuss any of the issues raised in this Client Alert.
The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.