That's $25 billion in new spending before the next election
A fresh federal budget is on the table, one that delivers broad tax cuts, targeted cost-of-living relief, and select investments across health, education, and infrastructure—with $25 billion in new spending.
Australians earning between $18,201 and $45,000 are set to see their income tax rate drop to 14% by July 2027, building on previously announced changes. According to Treasury estimates, the combined measures will deliver an average tax saving of $2,548 per person by the 2027–28 financial year.
In addition to tax relief, the government is expanding its energy bill support to ease cost-of-living pressures. Starting July, households and small businesses will receive $150 in automatic quarterly credits as part of a broader $1.8 billion extension of the energy rebate scheme.
Health spending forms another major component of the budget. $8.5 billion has been allocated to strengthen Medicare, with a goal to expand access to bulk-billed services by 2030. A separate $689 million commitment will lower the maximum price of many medicines on the Pharmaceutical Benefits Scheme (PBS) from $31.60 to $25.
“We are strengthening it because Australians need us to, not weakening it because American multinationals want us to,” Treasurer Jim Chalmers said in his budget speech. The Medicare levy threshold for low-income earners will also be raised, alongside new funding for women’s health services, including support for pelvic pain and menopause care.
For families with young children, the government is moving toward broader access to early childhood education. From January 2026, all families—regardless of employment or study status—will be eligible for at least 72 hours of subsidised child care every two weeks.
Housing policy received a mix of modest updates and tighter restrictions. A two-year ban on foreign nationals purchasing established homes will take effect from April 2025, a move aimed at freeing up housing stock for local buyers. Other housing measures include a $54 million investment in modular and prefabricated home manufacturing and an expansion of the Help to Buy scheme from $5.5 billion to $6.3 billion.
Total housing commitments now stand at $33 billion, but analysts note the budget stops short of tackling broader affordability issues in a significant way.
Several large-scale transport projects also feature in the budget, including $7.2 billion for Queensland’s Bruce Highway, $1 billion for Sydney’s Southwest rail link, and $2 billion for station upgrades connected to Melbourne’s future airport rail.
