Federal Budget 2025–26: What It Means for You and Your Business

What it means for you as an individual or a family:

The Budget delivers several targeted benefits for individuals, especially low to middle-income earners.

Personal Income Tax Cuts

From 1 July 2026, the Government will implement a two-stage reduction in personal income tax:

• The current 16% tax rate will drop to 15% from 2027
• It will fall again to 14% from 2028.

For someone earning $45,000, this could mean up to $536 in annual tax savings by 2028.

Medicare Levy Relief

To ease pressure on low-income households:

• The Medicare levy thresholds will rise from 1 July 2024
• A single taxpayer earning under $27,222 will be exempt from the levy
• Family thresholds will also increase, with a higher allowance per dependent

The Government is increasing Medicare levy thresholds to ease the financial burden on low-income earners and families.

HELP Debt Reduction

If you have a HELP or student loan, the Government is offering some relief:

• All outstanding HELP debts will be cut by 20% (subject to legislation)
• The repayment threshold will rise from $54,435 to $67,000 from 2026

These changes may improve your borrowing capacity and reduce financial stress.

Expanded Help to Buy Scheme

Getting into the property market could become easier:

• Income caps will increase to $100,000 (individuals) and $160,000 (couples/single parents)
• Property price caps will be tied to state-specific averages
• The Government will continue to contribute up to 40% in shared equity

This offers meaningful support for eligible buyers aiming to reduce deposit and mortgage size.

Energy Bill Relief

Eligible households will receive two $75 rebates on electricity bills through to December 2025—another small measure to offset rising living costs.

Foreign Buyer Ban on Existing Dwellings

From 1 April 2025, foreign buyers (including temporary residents and companies) will be banned from purchasing established homes for two years. This is aimed at improving access to the housing market for Australian residents.

For Business Owners and SME:

There’s a mix of opportunity and accountability for business owners in this Budget. While new grants and sector-specific support are welcome, the increased compliance measures mean businesses will need to be more vigilant than ever.

Energy Efficiency Grants

Small businesses can apply for up to $25,000 to upgrade appliances and systems to more energy-efficient models. This supports cost reduction while aligning with sustainability goals.

ATO Crackdown on Compliance

The Government is investing $999 million into tax compliance initiatives. Over the next four years, expect:

• Greater scrutiny on under-reported income and superannuation obligations
• Ongoing monitoring of high-wealth individuals and large businesses
• Extended programs targeting shadow economy activity and late payments

If you’re running a business, now’s the time to review your reporting and obligations.

Non-Compete Clauses Banned

In a major industrial relations change, non-compete clauses will be banned for employees earning under the high-income threshold ($175,000). This will:

• Encourage wage competition and workforce mobility
• Allow businesses more freedom when hiring talent from competitors

The change is designed to create a more competitive and flexible labour market for both employees and employers.

Franchisee and Small Business Protections

The Budget includes $12 million to:

• Strengthen oversight of the Franchising Code of Conduct
• Support enforcement against illegal phoenix activity
• Expand protections from unfair contract terms and trading practices

These measures aim to create a fairer, more transparent environment for small businesses and franchisees to operate and grow.

Support for Hospitality and Producers

For those in hospitality or alcohol production:

• Excise remission caps for brewers, distillers and wine producers will rise from $350,000 to $400,000
• The indexation of draught beer excise rates will be paused for two years from August 2025

These measures aim to ease costs and improve profitability in these sectors.

Other Business Highlights

• A Social Enterprise Loan Fund will be established to provide small loans to mission-driven businesses
• Funding for the National Anti-Scam Centre has been extended to protect consumers and businesses alike
• Updates to managed investment trust rules will clarify eligibility for concessional tax rates

These initiatives support innovation, safeguard the business environment, and ensure clarity in Australia’s investment landscape.

Final Thoughts

This Budget blends relief and reform. Individuals and families benefit from tax cuts, HELP debt relief, and expanded access to home ownership. Business owners are offered practical support—but must prepare for a stronger compliance environment.

Whether you’re looking to enter the property market, streamline your business finances, or make the most of government incentives, now is the right time to plan.

Let’s work through the changes together.