2025-26 Federal Budget Summary

Please note, the below measures have not been legislated and advice should be sought before relying on the contents of this article.

Federal Budget 25-26 – Private Business Owners

Easing Cost Pressures for Small Businesses

The Energy Efficiency Grants for SMEs program is providing $56.7 million in grants of up to $25,000 to over 2,400 businesses for energy upgrades, including appliance replacements and heating system improvements.

Support for Hospitality and Alcohol Producers

The Government will increase support for hospitality venues, brewers, distillers, and wine producers through changes to the alcohol tax settings in Australia, supporting local jobs and regional tourism. The changes include:

• A pause to indexation on draught beer excise and excise equivalent customs duty rates for a two-year period, from August 2025.
• Under this measure, biannual indexation of draught beer excise and excise equivalent customs duty rates will not occur as previously anticipated for August 2025, February 2026, August 2026, and February 2027. Biannual indexation will then recommence from August 2027.
• The Government will also increase support available under the existing Excise remission scheme for manufacturers of alcoholic beverages (the Remission scheme) and Wine Equalisation Tax (WET) Producer rebate. Currently, all eligible brewers and distillers can receive an excise remission under the Remission Scheme up to a cap of $350,000; and all eligible wine producers can currently receive a WET rebate up to a cap of $350,000 under the Producer rebate. This measure will increase the caps for all eligible brewers, distillers, and wine producers to $400,000 per financial year, from 1 July 2026.

Medical and Health Sectors
The Government is committing $8.5 billion in the Budget to strengthen Medicare:

• Bulk Billing Incentives – The previously announced tripling of bulk billing incentives will be extended to all Australians starting from 1 November 2025.
• Bulk Billing Practice Incentive Program – A new initiative will provide additional support to practices that bulk bill 100% of their patients, offering a 12.5% loading on Medicare rebate payments. As a result, a standard consultation that currently receives a $42.85 Medicare rebate could increase to $69.56 for metropolitan practices, and up to $86.91 in remote areas when combined with the expanded bulk billing incentives and the new loading.
• Healthcare Workforce – An additional $617 million will be invested into the healthcare sector, including funding for 400 nursing scholarships and support for training 2,000 new general practitioner trainees annually by 2028.

Competition and Fair-Trading Measures

• The Government will work with states and territories to extend Unfair Trading Practices protections to small businesses.
• $7.1 million will be provided over two years to strengthen the ACCC’s enforcement of the Franchising Code.
• Additional protections from Unfair Contract Terms and Unfair Trading Practices will be extended to franchised businesses, subject to consultation.

Digital and Cyber Security Support

• Over $60 million has been committed since the 2023–24 Budget to support small business digital and cyber security capability.
• Key programs include:

• • Digital Solutions Program
  • Cyber Wardens Program
  • Small Business Cyber Resilience Service
  • Cyber Health Check

• These programs aim to support digital adoption, improve cyber awareness, and assist in cyber incident recovery.

Competition and Retail Sector Reforms

• $2.9 million will support fresh produce suppliers in enforcing their rights under the now-mandatory Food and Grocery Code of Conduct, with significant penalties introduced for breaches by supermarkets.
• $240 million has been allocated to help states and territories streamline planning and zoning rules to make it easier to establish new supermarkets.

Federal Budget 25-26 – Individuals & Households

Energy Bill Relief Extended for Households

To help with ongoing cost-of-living pressures, the Federal Government has announced a further $150 rebate for household energy bills, effective from 1 July 2025. The measure is part of a broader $1.8 billion pre-budget package and has received bipartisan backing.

New Personal Income Tax Cuts

New tax cuts for every Australian taxpayer from 1 July 2026. These tax cuts are in addition to the previously announced tax cuts which have been rolling out since 1 July 2024.

• Taxpayers earning over $45,000 (approximately 80% of taxpayers) will receive an additional $268 tax cut in 2026–27 and $536 from 2027–28, compared to 2024–25 settings.
• From 1 July 2026, the 16 per cent rate will be reduced to 15 per cent.
• From 1 July 2027, the 15 per cent rate will be reduced further to 14 per cent.

Medicare Levy Thresholds Increasing

The Government will increase the Medicare levy low-income thresholds for singles, families, and seniors and pensioners from 1 July 2024 to provide cost of living relief.

• The threshold for singles will be increased from $26,000 to $27,222.
• The family threshold will be increased from $43,846 to $45,907.
• For single seniors and pensioners, the threshold will be increased from $41,089 to $43,020.
• The family threshold for seniors and pensioners will be increased from $57,198 to $59,886.
• The family income thresholds will increase by $4,216 for each dependent child or student, up from $4,027.

First Home Buyers
The Government has announced an expansion of support for first home buyers by broadening access to Labor’s Help to Buy program. Under this scheme, the Commonwealth will contribute up to 30% of the purchase price for an existing home and up to 40% for a new home through an equity stake.

Income eligibility thresholds will be raised from $90,000 to $100,000 for individuals, and from $120,000 to $160,000 for joint applicants and single parents. Additionally, property price caps will be adjusted to reflect the average home prices in each state and territory.

Student and Graduate Debt Relief

• The Government will cut student debts by 20% before indexation is applied on 1 June 2025, reducing total student debt by $16 billion. In total, these reforms will cut around $19 billion in student debt for over 3 million Australians.
• The student loan repayment system is also being revised to make it fairer for graduates.

Superannuation – Prior Year Policies
There were no new major superannuation measures announced in this year’s Federal Budget.
Several policies introduced in previous Budgets remain unlegislated at the time of this publication. If they are not passed before the calling of the next Federal Election, it will be up to the incoming Government to determine whether to proceed with them.

• Additional Tax on High Super Balances – From 1 July 2025, the Government plans to implement an additional 15% tax on superannuation earnings for individuals with balances exceeding $3 million. Legislation for this measure is currently before Parliament but has not yet been passed.
• Superannuation Guarantee Payment Frequency – Another proposed change, set to begin on 1 July 2026, will require employers to pay superannuation guarantee contributions at the same time as salary payments, replacing the current quarterly system. As of the date of this publication, the relevant legislation has not been introduced into Parliament.

Superannuation – Other
As a reminder, although not a new measure, the superannuation guarantee rate is scheduled to rise from 11.5% to 12% on 1 July 2025. This will be the final step in the legislated increases.

Federal Budget 25-26 from an Investment Perspective

Ban on Foreign Investors

There will be a ban on foreign persons (including temporary residents and foreign owned companies) from purchasing established dwellings for two years from 1 April 2025, unless an exception applies. Exceptions to the ban will include:

• Investments that significantly increase housing supply or support the availability of housing on a commercial scale
• Purchases by foreign owned companies to provide housing for workers in certain circumstances.

New Investor Gateway

• From September 2025, a new “Front Door” for investors will streamline investment processes for major transformational projects.
• An Investor Council will guide project facilitation and help attract global and domestic capital into priority sectors.

Investment-wise, key areas to watch for future opportunities based on the budget’s focus include:

Clean Energy and Strategic Industries

• The Government is expanding the Clean Energy Finance Corporation by $2 billion, unlocking $8 billion in additional investment for renewable and low emissions technologies.
• Investments also include $36.9 million to optimise existing grid infrastructure and a $10 million Accelerated Connections Fund to reduce grid bottlenecks.

Hydrogen, Critical Minerals & Advanced Manufacturing

• A legislated $13.7 billion in production tax incentives will support hydrogen and critical minerals sectors.
• The Future Made in Australia Innovation Fund allocates $1.5 billion, including:
  • $750 million for green metals,
  • $500 million for clean energy tech manufacturing,
  • $250 million for low carbon liquid fuels.

Green Metals & Heavy Industry Transition

• $2 billion Green Aluminium Production Credit to support aluminium smelters in transitioning to renewable energy.
• $1 billion Green Iron Investment Fund to accelerate development of a domestic green iron industry.
• Additional support for the Whyalla Steelworks includes immediate financial assistance and long-term decarbonisation plans, in partnership with the South Australian Government.

Conclusion

The 2025–26 Federal Budget outlines a range of measures impacting private business owners, individuals, and investors. For businesses, key items include new funding for energy efficiency upgrades, and increased regulatory oversight in retail and franchising. Changes to excise indexation, digital and cyber security programs, and zoning reforms are also relevant across sectors.

For individuals, the budget includes additional tax cuts in 2026 and 2027, adjustments to Medicare levy thresholds, and a 20% reduction in student debts from June 2025. On the investment side, there is continued focus on energy transition, with significant funding directed toward clean energy, critical minerals, and green manufacturing. The introduction of a national investor gateway and sector-specific incentives may present opportunities in targeted industries, particularly in energy, resources, and infrastructure.