On March 25, 2025, Treasurer Jim Chalmers delivered the Australian Federal Budget for the 2025–26 financial year. This budget, presented on the eve of a federal election, seeks to balance fiscal responsibility with measures aimed at alleviating the cost of living for Australians.​

Fiscal Outlook

The budget projects an underlying cash deficit of $27.6 billion for the 2024–25 financial year, a slight increase from previous forecasts. This deficit is attributed to ongoing global economic challenges and the government’s commitment to supporting households and businesses during uncertain times. ​

Cost-of-Living Relief

Addressing the rising cost of living, the government has introduced several initiatives:​

• Tax Cuts: A $17 billion tax relief package will reduce the tax rate for individuals earning between $18,201 and $45,000 over the next two years. ​
• Energy Bill Relief: Energy bill relief measures have been extended through 2025, providing ongoing support to households and approximately 1 million small businesses. ​
• Healthcare Investments: A record $7.9 billion investment in Medicare aims to strengthen bulk billing, ensuring free GP visits for Australians. ​

Infrastructure and Regional Development

The budget allocates significant funding for infrastructure projects:​

• Early Education Centres: A $1 billion fund has been established to build and expand early education centres, enhancing access to quality childcare and early learning. ​
• Rail Infrastructure: $1 billion is reserved for land acquisition for a future rail line connecting Western Sydney Airport with southwestern suburbs, aiming to improve regional connectivity. ​
• Regional Development Programs: Funding for regional programs like the Growing Regions and Regional Precincts and Partnerships Programs has been maintained, supporting infrastructure and community development in regional areas. ​

Business Support

Small businesses will benefit from measures designed to ease financial pressures and promote growth:​

• Instant Asset Write-Off: The government has extended and increased the instant asset write-off for small businesses, allowing for immediate deductions on eligible asset purchases. ​
• “Buy Australian” Plan: A new $1 billion fund encourages government departments to favor Australian companies in procurement, aiming to stimulate local businesses and protect them from economic disruptions. ​

Indigenous Affairs

Demonstrating a commitment to Indigenous communities, the budget includes:​

• First Nations Investment: $1.3 billion over six years is allocated to support improved outcomes for First Nations Australians, addressing health, education, and economic disparities. ​

Conclusion

The 2025–26 Federal Budget presents a complex mix of fiscal challenges and strategic investments. While aiming to reduce deficits, the government has prioritized measures to support individuals, families, businesses, and regional communities, reflecting a nuanced approach to current economic conditions and future growth.