The recently announced 2025-26 Federal Budget has significant implications for individuals, families, and businesses. As we navigate economic uncertainties, the government has focused on easing cost-of-living pressures while implementing tax cuts and social security adjustments. Below, we break down the key takeaways and how they might impact your financial planning.

Tax Cuts and Personal Income Adjustments

One of the most significant highlights of the Budget is the implementation of personal income tax cuts. Starting from 1 July 2026, the tax rate for those earning between $18,201 and $45,000 will decrease from 16% to 15%, with a further reduction to 14% from 1 July 2027. This translates into an annual tax saving of up to $536 per year when fully implemented.

What does this mean for you?

Lower tax rates mean more disposable income, which could be used for savings, investments, or debt repayment.

Those on lower incomes may find it less beneficial to make voluntary concessional contributions to super, as the marginal tax rate will be lower than the 15% super contributions tax.

Superannuation Updates

Superannuation largely remained untouched in this year’s Budget, but some previously announced changes remain relevant:

Super Guarantee Increase – The employer superannuation guarantee rate will increase to 12% from 1 July 2025.

Tax Integrity Program – The government will allocate $50 million over three years from 1 July 2026 to recover unpaid superannuation.

Super Contribution Caps – While contribution caps remain unchanged for 2025, they are expected to increase from 1 July 2026.

Action Points

Review your salary sacrifice arrangements to ensure you do not exceed contribution caps.

For high-net-worth individuals, consider reviewing superannuation strategies, particularly regarding the proposed Division 296 tax, which would impose an additional 15% tax on balances exceeding $3 million.

Cost of Living Relief

The government has extended energy bill relief until 31 December 2025, with eligible households receiving a $150 rebate split across two quarters.

Other cost-of-living measures

Medicare Expansion – An additional 50 Urgent Care Clinics will be opened to improve bulk billing accessibility.

Cheaper Medicines – The maximum co-payment for Pharmaceutical Benefits Scheme (PBS) medicines will be reduced from $31.60 to $25 from 1 January 2026.

Student Debt Reduction – A 20% reduction in all outstanding student loans from 1 June 2025, plus an increase in the minimum repayment income threshold from $54,435 to $67,000 from 1 July 2025.

Housing and Home Ownership Assistance

The government has announced multiple housing measures to tackle affordability challenges:

The Help to Buy program will receive an additional $800 million, increasing property price and income caps.

Foreign buyers will be banned from purchasing existing homes for two years from 1 April 2025.

Incentives of up to $10,000 for new apprentices in the building trade.

Takeaway for Homebuyers

If you’re a first-home buyer, consider taking advantage of the Help to Buy program before price caps increase further.

Investors should be aware of the changing regulations surrounding foreign ownership and land banking.

Business and Small Business Support

Small business owners should note the following Budget measures:

Energy Bill Relief – Small businesses will receive a $150 rebate on their energy bills until the end of 2025.

Super Payment Reforms – From 1 July 2026, employers will be required to pay superannuation contributions at the same time as wages.

Franchisee Protection – Increased regulatory oversight of franchising agreements to prevent unfair contract terms.

While the Federal Budget provides some much-needed relief in key areas, it’s essential to take proactive steps to adapt your financial strategy. Whether you’re a salaried worker, small business owner, investor, or retiree, planning ahead can help you maximise benefits and stay prepared for future changes.

To understand how the Budget measures could potentially impact your financial goals and situation – contact one of our advisers at Enhance Financial Partners on 1300 885 025.

Information in this article has been sourced from the Budget Speech 2025-26 and Federal Budget Support documents.  
It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change.