FEDERAL BUDGET 2025 – SUMMARY

Wish the budget was in summary form? Well, here it is:

TAX CUTS

The widely announced tax cuts have been legislated since 1 July 2024. From 1 July 2026, the 16 per cent rate will be reduced to 15 per cent (see red below). From 1 July 2027, the 15 per cent rate will be reduced further to 14 per cent. The Coalition have suggested they will not support this measure so we have to wait and see whether it will be implemented

MEDICARE LEVY THRESHOLD

From 1 July 2024 (for the current FY) adjustments are being made to the Medicare Levy threshold to ensure that low income earners continue to be exempt from the Medicare Levy:

FOREIGN OWNERSHIP OF PROPERTY

The Government will attempt to ban 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; and
• purchases by foreign‑owned companies to provide housing for workers in certain circumstances

The ban is intended to ensure that “Australians will be able to buy homes that would have otherwise been bought by foreign persons, while encouraging foreign persons to boost Australia’s housing supply”. The devil will be in the detail on this one so draft legislation will need to be reviewed carefully.  

RESTRAINT OF TRADE

The government will ban non-compete clauses for workers earning less under $175,000. They will also seek to ‘close loopholes’ by cracking down on wage fixing and using a ‘no-poach’ agreement to block staff from being hired by competitors.

If you are considering moving jobs, don’t get too excited as this measure is set to start in 2027. A closer look at the draft legislation is needed before we start making presumptions on how this measure will actually work in reality.

COST OF LIVING

According to the Macquarie dictionary, “Cozzie livs” is a “humorous play on cost of living” having been awarded Macquarie Dictionary’s Word of the Year in 2023.

But many people don’t find the cost of living crisis all that funny. A number of measures have been proposed to tackle the issue:

• The previously announced rebates on electricity bills is being extended for a further 6 months, providing a rebate of 75 per quarter for eligible Australian households and small businesses until 31 December 2025 to provide cost-of-living relief
• Further funding is being provided to increase access to bulk billing and expand eligibility for bulk billing incentives
• Many new medicines are being added to the Pharmaceutical Benefits Scheme including the Contraceptive pill Slinda, endometriosis treatment Ryego and increased rebates on long-term contraceptives such as IUDs and birth control implants.
• Wage increases for aged care workers
• One off reduction to student debts by 20% (this one is questionable – it won’t be implemented until after the federal election meaning there is no certainty it will make it into law.

CONSULTANTS

The government has announced it will reduce spending by $720 million by reducing its reliance on consultants, contractors and labour hire. Time will tell what effect that will have on outputs and which consultants it chooses to let go.

SUMMARY

All in all, this budget is all sizzle and no steak, with very few announcements relating to small business relief. Disappointingly, the instant asset write-off has not been extended and will therefore end on 30 June 2025.

Ultimately, the helpful measures for the everyday Australians are dependent on whether the measures can be passed into law and that will likely hinge on the outcome of the upcoming federal election.

But it is not all bad news. Adelaide Zoo’s Giant Pandas Xing Qiu and Yi Lan are set to receive $3.8 million over 5 years, in hopes that they become the next breeding pair. All the best for the happy couple!