Federal Budget 2025–26: What’s In It (and What’s Not)

The 2025–26 Federal Budget has landed — and while there are a few wins for households, small business owners will feel overlooked. There’s no meaningful new support, and the clock is ticking on key tax measures that still haven’t passed Parliament.Here’s a quick breakdown.

What’s in it for Individuals & Families?

Tiny tax cuts — but not until July 2026

• The bottom tax bracket (from $18,201 to $45,000) drops from 16% to 15% in July 2026, and to 14% in July 2027
• Max saving: $268 in 2026–27, and $536 from 2027–28
• Roughly $5 per week from 1 July 2026 - 15 months away, followed by roughly $10 per week 12 months after that

 Medicare levy thresholds lifted for low-income earners

• Only applies to very low earners (e.g. $27,222 for singles, $45,907 for families in 2025–26)
• Reduces or removes Medicare levy for those under the thresholds

$150 energy rebate

• Applies to households and small businesses
• Paid in $75.00 quarterly chunks from July to December 2025

Subsidised childcare (income tested)

• From 1 Jan 2026: 3 days of subsidised childcare per week
• Replaces the current activity test

Cheaper medicines and better Medicare access

• $1.8B over 5 years for PBS
• $8.5B for more clinics and bulk billing
• $240M for women’s health (including menopause care)

HECS/HELP relief

• 20% cut to existing debt
• Repayment thresholds eased from 1 July 2025

Help to Buy scheme expanded

• Government can now chip in up to 40% equity in a new home
• Income threshold raised to $100k (single) and $160k (joint)
• Still not open for applications

 

What’s in it for Small Businesses?

Instant Asset Write-Off: Back to $1,000?

• The $20,000 write-off for 2024–25 still hasn’t passed into law
• No extension for 2025–26, so from 1 July 2025 it reverts to the old $1,000 threshold
• We haven’t seen that low a limit in years

Beer excise frozen

• From August 2025, beer won’t get more expensive due to indexation
• Alcohol producers get a small increase in support caps ($400k from July 2026)
• Overall: more headline than help

Non-compete clauses banned (from 2027)

• For lower and middle-income workers (<$175k)
• In practice, many small businesses don’t use these anyway
• Doesn’t affect non-solicitation clauses (which are still enforceable)

ATO ramps up audits

• $1B allocated to expand compliance!
• Expect more attention on SMEs, high net worth's and the cash economy

 

Housing & Foreign Investor Changes

 

• Foreign buyers banned from purchasing established homes for 2 years (from April 2025)
• CGT changes for foreign residents delayed until October 2025 at the earliest

 

 Big Picture: The Economy

 

• GDP growth: 2.25% (2025–26), 2.5% (2026–27)
• Unemployment: Expected to peak at 4.25%
• Inflation: Tracking back to 2.5%
• Wages: Real wages growing slowly
• Budget deficit: -$42.1B in 2025–26
• National debt: Forecast to hit 23.1% of GDP by 2028–29 — a huge $1.1 trillion

 

Our Take

There’s not much new here — a handful of sweeteners, but not a lot of substance.

Small business? Overlooked again.
Support for investment? Absent.
Key tax measures? Still stuck.
Superannuation? Silence.

With an election announcement likely soon, we’ll be watching closely to see what the opposition puts forward in their reply.

 

Next Steps

If you’d like to understand how the Budget changes could impact you, your business or your tax planning, we’re here to help.

Contact LINK Advisors if you require assistance today!