Federal Budget 2025–26 | Key Changes Every Client Should Know
At Ipsum Advisors, we know that Budget updates can feel overwhelming, especially when they’re filled with jargon and fine print. So, we’ve cut through the noise and pulled together the changes that matter most to you — whether you’re running a business, managing your household budget, or planning your financial future.
Here’s what you need to know from this year’s Federal Budget, plus a few other key updates.
Tax Cuts for Individuals
From 1 July 2026, the tax rate for income between $18,201 and $45,000 will drop to 15%, then to 14% the following year. That’s a welcome win for low- and middle-income earners — and for the average Australian worker, it means saving up to $536 a year from 2027–28.
The Medicare Levy low-income threshold is also increasing, which means over 1 million Australians will pay less or no levy at all.
Business Updates & Small Business Wins
- Energy bill relief will be extended through to the end of 2025, providing welcome support to around 1 million small businesses.
- Cyber security support, energy efficiency grants, and protections against unfair trading practices are also in place to level the playing field.
- A ban on non-compete clauses for low- and middle-income workers is on the horizon, potentially boosting wages and career mobility.
ATO & Compliance Changes
There’s been a notable increase in funding for the ATO to enforce taxpayer compliance. If you’re a business owner, now’s a good time to ensure your systems and documentation are in order — especially as more digital record-keeping and real-time reporting requirements roll out.
HELP Debt Reductions
A major highlight: 20% of HELP debt will be wiped for eligible Australians, saving many graduates thousands. This is in addition to changes to repayment thresholds and indexation calculations — delivering meaningful cost-of-living relief to over 3 million people.
Help to Buy & Housing Reforms
- The Help to Buy Scheme is being expanded to support more Australians into homeownership with lower deposits and smaller mortgages.
- A ban on foreign buyers purchasing established dwellings for two years begins from 1 April 2025.
- An extra $10,000 is on offer for apprentices in housing construction, helping boost the industry and reduce workforce shortages.
Additional Tax Updates to Be Aware Of
Some important tax updates have recently passed — separate from the Budget itself — that may impact your tax strategy in the year ahead:
- $20K Instant Asset Write-Off Extended
This measure has now officially passed, allowing eligible businesses to immediately deduct assets costing less than $20,000 until 30 June 2025. - No More Deductions for ATO Interest Charges
From 1 July 2025, general interest charges (GIC) and shortfall interest charges (SIC) will no longer be deductible. This makes staying compliant and up to date more important than ever.
Division 296 Superannuation Tax Bill Has Lapsed
This proposed additional tax for individuals with super balances over $3 million has not passed. If Labor wins the next election, they’ll need to reintroduce the legislation and restart the process. If the Coalition wins, it’s unlikely to go ahead.
What Now?
This year’s budget brings a blend of short-term support and long-term structural change. At Ipsum Advisors, our job is to help you make sense of what these shifts mean for your specific circumstances.
Whether it’s rethinking your business tax strategy, understanding what the compliance changes mean for your operations, or leveraging new opportunities — let’s talk.
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Ready when you are: www.ipsumadvisors.com.au
DISCLAIMER:
This summary has been prepared by Ipsum Advisors for the benefit of our clients and community. It is a general overview only and should not be considered personalised financial advice. For a full and detailed view of the 2025–26 Federal Budget, please visit the official Budget website: https://budget.gov.au