Federal Budget 2025–26: What It Means for You and Your Business

Federal Budget 2025–26: What It Means for You and Your Business

The Federal Budget for 2025–26, delivered on 25 March 2025, focuses on providing immediate support to households and businesses, while aiming to ease cost-of-living pressures and aid in economic recovery. While it doesn’t introduce major tax reform, several key measures could directly affect your personal finances or business operations.

1. Personal Income Tax Cuts

From 1 July 2026, the rate on income between $18,201 and $45,000 dropped from 16% to 15%, and a further cut to 14% follows on 1 July 2027. Both are legislated – they were proposals when this post was written.

2. Cost-of-Living Relief

-HELP Debt Reduction: A 20% reduction in HELP student loans will wipe out $16 billion in student debt, easing financial pressure for many young Australians.

-Higher HELP Repayment Threshold: From 2025–26, the income threshold for starting HELP loan repayments will rise from $54,435 to $67,000. This means more income can be earned before repayments kick in.

3. Medicare Levy Threshold Increases

To support low-income Australians, the Medicare levy low-income thresholds are increasing:

-Individuals: from $24,276 to $26,000

-Families: from $40,939 to $43,846, with an additional $4,027 per dependent child or student

-Seniors/Pensioners: from $38,365 to $41,089

This change means more people will pay less or no Medicare levy.

4. Small Business Support

-Disaster Recovery Funding: $693.2 million will be available to help small businesses recover from natural disasters through co-funded initiatives.

-Mental Health & Financial Assistance: Programs such as NewAccess for Small Business Owners and the Small Business Debt Helpline will offer mental health and financial support for business owners.

Conclusion

The 2025–26 Federal Budget introduces practical support for both individuals and small businesses, particularly in the form of tax relief, student loan changes, and disaster recovery assistance. While there are no major structural reforms, the measures aim to address immediate needs and support longer-term stability.

SOURCE: https://www.businessnsw.com/members/member-alerts/federal-budget-2025-2026