Last night, the Government delivered the Federal Budget for 2025-26.  While there were no new measures or surprises in superannuation, it’s important to note that the previously announced Payday super reforms remain on track to start from 1 July 2026.  

We’ve summarised the Budget highlights below. These announcements are proposals only. You can also read all the details on the Budget website.

Treasurer Jim Chalmers outlined 5 key priorities for this budget, to rebuild living standards:

‘Helping with the cost of living, strengthening Medicare, building more homes, investing in every stage of education, and making our economy stronger, more productive and more resilient.’*

Personal income tax cuts 

The big news from this Budget was the announcement of a tax cut for all Australians, with the lowest income tax rate being reduced from 16% to 15% from 1 July 2026 and reduced further to 14% from 1 July 2027. A worker on average earnings of $79,000 will get a new tax cut of $268 in 2026–27 and $536 per year from 2027–28. The Medicare levy low income threshold will also be lifted so more Australians remain exempt from the levy or pay a reduced rate. 

Cost of living measures

Cost of living relief was once again a key focus of this year’s budget, with several initiatives announced, including: 

Housing 

The Government’s Help to Buy scheme will be extended to allow homebuyers to co-buy a home with the Government, reducing the deposit and mortgage size needed to enter the property market. The property price caps will be increased and income caps will be increased to $100,000 for individuals and to $160,000 for couples. Foreign investors will also be banned from buying established homes for two years from next month. To tackle the housing shortage, the Government is investing $54 million in this Budget to accelerate the uptake of modern methods of construction and aims to build 1.2 million new houses by the end of this decade (through The National Housing Accord).

Healthcare - Enhancing Medicare and cheaper medications

Thanks to the previously announced $8.4 billion investment in Medicare, there will be more bulk-billed GP visits. Also, announcements in relation to cheaper medications on the Pharmaceutical Benefits Scheme (PBS). From 1 January 2026, the maximum co-payment will be reduced from $31.60 to $25 per PBS script. The cost of a script for concession card holders will remain unchanged at $7.70. Along with these changes, the Government has also committed $792.9 million for women's health, including cheaper, easier access to contraceptives and menopause health assessments, and support for more endometriosis and pelvic pain clinics. 

Electricity bill relief

From 1 July households will receive an additional $150 in energy rebates this year, which will be applied to their electricity bills each quarter until the end of 2025 so, every household will receive two $75 rebates ($150 in total). This is an extension of the previous energy rebates and is aimed at helping to reduce cost of living pressure on households.

Childcare subsidies 

As previously announced before the Budget, starting from January 2026, parents will be guaranteed a minimum of three days of subsidised childcare regardless of how much they work or study — provided they don't earn more than $533,280 The activity test for early education support will be scrapped. More childcare centres will be built, with the Government committing $1 billion to fund 160 new or expanded centres. 

Education and Student debt reductions

As previously announced before the Budget, to ease the cost of living for young people, the Government confirmed it would cut HECS-HELP debts by 20% as well as previously announcing that they would reduce the repayment amounts per year. They’ve also promised to create 100,000 fee-free TAFE places every year, if they are re-elected. 

These measures are aimed at supporting Australians to rebuild their living standards and reduce pressure on households. 

Other announcements

• In a bid to make our economy more competitive, the Government has announced a ban on non-compete clauses in employment contracts. This affects people earning up to $175,000, who may decide to move to a competitor or start their own business in the same industry. Typically, these clauses prevent an employee from starting a competing business within six months of leaving, or within a certain geographical distance, from their most recent employer.  
• Wage increases for aged care and child care workers with an investment of $2.6 billion for aged care nurses and, as previously announced before the Budget, $3.6 billion for childcare workers. 
• $17.1 billion invested in major road and rail projects over the next decade. 
• $20 million will be invested to support buying Australian-made products. 
• Natural disaster support - Ex-Cyclone Alfred recovery - with an extra $1.2 billion going towards social security costs and recovery support.

Super changes coming this 1 July

While not budget announcements, here are few super-related changes coming from 1 July:

• The Super Guarantee (SG) rate will be increasing to 12% from 1 July 2025,  
• Paid parental leave - Super will be paid on Government-funded Parental Leave Pay for the first time. This will be administered by the ATO for eligible parents who have their baby (or adopt) on or after 1 July 2025.  
• Payday super - as previously announced, from 1 July 2026 and subject to legislation, your employer will need to pay your super at the same time as your salary. E.g. if you get paid fortnightly your super will also be paid fortnightly instead of quarterly. You can check your super payments have been made by logging into Member Online. This is subject to legislation.

With an election looming, the measures outlined in this Federal Budget are dependent on Labor being re-elected and subject to legislation. All the above announcements could change following the Federal election.

We’re here for you

We’ll keep you updated on all super and financial matters. To learn more, check out our Education hub. 


 *2025–26 Budget Speech, Parliament House, Canberra | Treasury Ministers.
All information, rates and/or fees are current at the time of production and are subject to change. Changes to government legislation and superannuation rules made after this time may affect the accuracy of the information provided. You may wish to obtain professional advice before acting on any of the information contained in this document.