Federal Budget 2025: How will it save you money?

The 2025 Federal Budget covered a lot of areas. Here's an overview of key areas that might affect you.

The Federal Budget 2025 has kicked off, with Treasurer Jim Chalmers outlining a focus on: cost of living, health, housing and education.

The Federal Budget 2025 is shortly ahead of a yet-to-be-called federal election. Because of this, the budget sort of becomes part of the election campaign and so we did know a lot of things in advance. But, it's still good to get all the confirmed points in one place.

We were told early on that this year's budget will be in a deficit (which sounds bad, but is actually pretty normal). The reason for the deficit this year is partly down to the fact that Labor are giving out so much financial support.

The budget included a lot of announcements from tax cuts and energy relief to big infrastructure projects and support for workers. But here's what was announced in the 2025 Federal Budget for everyday Aussies battling the cost of living:

Two new tax cuts

The Treasurer announced new tax cuts for 2026 and 2027.

From 1 July 2026, the 16% tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15%.

From 1 July 2027, this tax rate will be reduced 14%.

The government predicts that the average income earner will get a tax cut of $268 in 2026–27 and $536 a year from 2027–28.

Energy rebates

Australians will continue to get support in the way of energy rebates. Last year we had $300 announced, but this year we've got a $150 energy bill rebate coming our way.

Half the cost of last year, it is only for half the time too. Starting from 1 July 2025, $75 will be credited to your energy bill across 2 quarters, not the entire year.

Housing

Crucially, the government is extending the Help to Buy scheme to support Australians buying homes with smaller deposits. This includes committing $800million to lift the property and income thresholds, meaning the scheme will be available to more people.

There is a commitment to building 1.2 million new and 'well-located' homes over the next 5 years.

$1.5billion has also been committed to the Housing Support Program to state, territory and local governments to fund projects around housing and infrastructure.

The government will also put a stop to foreign investors buying existing homes for the next 2 years, ensuring more properties are available for Australian buyers.

Rental crisis

The government is increasing the rates of Commonwealth Rent Assistance by 45%. It is also offering tax concessions to help the construction of new rental properties. It expects this to produce 80,000 new rental homes over the next 10 years, with 8,000 of those being affordable homes.

Childcare subsidies

Assuming Labor wins the election, the party has announced childcare subsidies up to 3 days a week. This will be for families earning under $530,000 a year.

The plan will also remove the current activity test where parents need to prove what they do in order to get the subsidies. This will hopefully increase access for low-income families. This initiative will take place from 1 January 2026, if Labor wins the election.

Student loan discounts

From 1 June 2025, all Higher Education Loan Program (HELP) and student loan balances will be reduced by 20%. $16billion will be removed from loan balances across 3 million Australians. This was an election promise made in November 2024.

The government will also increase the amount people have to earn before they are expected to repay their loans. The income threshold will rise from $54,435 to $67,000 for 2025-26.

Medicare levies

The government will increase the Medicare levy low‑income thresholds by 4.7% for singles, families, and seniors and pensioners from 1 July 2024. That means you'll see the difference when you're filling out your tax return at the end of this financial year.

Cost of medicine

The Treasurer has confirmed the government will cut the maximum cost of medicines on the Pharmaceutical Benefits Scheme (PBS) for everyone with a Medicare card and no concession card. Starting on 1 January 2026, the maximum co-payment for scripts will be lowered from $31.60 to $25.00 per script. It will remain frozen at $7.70 for pensioners.

Women's health is also getting a $1.8billion boost. Investment will be made to oral contraceptives and treatment for endometriosis, menopause, lymphoma, and treatment‑resistant major depression.

Support for Australian businesses

Instead of retaliating against the US with tariffs, the government has committed to supporting Australian businesses through the Buy Australian Campaign. The budget has provided $20million to support Australian producers by encouraging Australians to buy Australian-made products.