The Federal Budget for 2025–26 has been handed down, and while many of the announcements continue previously established initiatives, there are several key measures that will impact individuals, families, and businesses alike.

At Hoffman Kelly, we’ve reviewed the budget in detail and compiled a summary of the most relevant updates for our clients. Below are the key takeaways to be aware of.

Personal income tax cuts

From 1 July 2026, personal income tax rates will be reduced for all taxpayers, followed by a further cut from 1 July 2027. These changes will result in a maximum saving of $268 in the 2026–27 year and $536 in 2027–28, primarily benefitting low- to middle-income earners.

Increase to Medicare levy thresholds

Low-income earners will benefit from higher Medicare levy thresholds from 1 July 2024. This change reduces the tax burden for eligible individuals and families, providing some cost-of-living relief when lodging tax returns for 2024–25.

$150 energy bill relief

From 1 July 2025, households and small businesses will receive an automatic $150 credit on their energy bills, distributed in quarterly instalments through to the end of the year. This measure continues the government’s energy rebate program.

Expanded ‘Help to Buy’ scheme

The Government has committed an additional $800 million to the ‘Help to Buy’ program. This scheme reduces the deposit required to purchase a home by offering an equity contribution of up to 30% for existing homes and up to 40% for new homes. Income eligibility thresholds have also increased.

Freeze on beer excise and additional support for alcohol producers

The indexation on draught beer excise will be frozen for two years from August 2025. In addition, from 1 July 2026, eligible brewers, distillers and wine producers will receive increased benefits under the Excise Remission Scheme, with the cap raised to $400,000 per financial year.

Boost to healthcare and Medicare

A total of $8.5 billion will be invested in Medicare, including funding for 50 new urgent care clinics and expanded bulk-billed GP services. An additional $1.8 billion has been allocated to reduce the cost of medicines, alongside targeted funding for women’s reproductive health and menopause support.

Funding for ATO compliance

Nearly $1 billion has been allocated to the Australian Taxation Office over the next four years to extend its compliance programs, including those focused on tax avoidance, the shadow economy, and integrity across personal and business tax reporting.

While many of these measures will require further detail and legislative progress, they represent significant areas of change and opportunity. If you’d like tailored advice on how these updates may affect your individual or business circumstances, please don’t hesitate to get in touch with our team.

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