The Hon Dr Jim Chalmers MP handed down the 2025-26 Federal Budget at 7:30 pm (AEDT) on 25 March 2025. The budget deficit is forecast to be $42.1 billion in 2025-26 following a couple of years of surpluses. The key focus areas of this Budget are around easing cost of living pressures, providing affordable housing and healthcare.
From a tax perspective, for individuals, the Government announced tax cuts by reducing the 16% marginal tax rate to 15% in 2026-27 and 14% in 2027-28. As part of its cost-of-living measures, the Government has committed to reducing student debt, providing energy relief and banning foreigners from buying established dwellings for two years to ease the housing crisis.
For businesses, there was nothing of substance in the Budget. Importantly for small businesses, the Budget papers were silent on the $20,000 instant asset write off and it appears this has not been extended to the 2025-26 income year.
Our National Tax Committee have analysed the budget papers and prepared a summary of the major Budget announcements, as well as a detailed analysis.