Federal Budget 2025

Jim Charmers presided over a federal budget (click here for a summary) that may not have even been handed down if cyclone Alfred didn’t ruin the government’s plans to call an election at that time. Understandably, the budget has been hurriedly constructed and tries to appeal to as large a swathe of voters as possible. There are no ground-breaking policies, but rather minor sweeteners to key voter demographics (families/students/pensioners) ahead of the impending federal election.

Income tax cuts (detailed below), extension of energy bill rebates and enhancements to subsidised childcare have been tabled as an attempt to tackle the ever-rising cost of living, however the quantum of what is proposed could be described as rather insignificant. Other proposals include decreases to the cost medicines on the PBS (non-concession card holders), reductions to student HELP debts and repayment requirements, and a government shared equity ‘help to buy’ scheme/banning of foreign ownership to assist first home buyers.

The areas that have been untouched are:

1. Superannuation: The government has been silent on this topic and has not proposed any amendments to super. The current super contributions limits of $30,000 concessional contributions and $120,000 non-concessional for this and future financial years will remain in place. The controversial division 296 ruling for clients with larger balances (above $3mil) has been forgotten.
2. Aged Care: The current aged care system will undergo a dramatic change from 1 July 2025, and this will increase the amount of capital and associated fees new residents will need to provide to support the funding of their care.
3. Deeming rates & social security: The current deeming rates have been artificially kept low (2.25% maximum rate) and there is no mention of whether rates will increase from 1 July 2025 to reflect the current cash rates (4.10% RBA cash rate). If deeming rates increase this could affect individuals entitlements to the age pension and commonwealth seniors health care card.