Key Takeaways from the 2025-26 Federal Budget

Treasurer Jim Chalmers handed down the 2025-26 Federal Budget last night. In this wrap, find out what’s key from the Budget papers as all eyes are on a soon to be called election. 

Treasurer Jim Chalmers handed down the 2025-26 Federal Budget last night, including important measures around providing cost-of-living relief and boosting Australia’s investment into disaster resilience.

In this wrap, find out what’s key from the Budget papers as all eyes are on a soon to be called election.

A Surprise Tax Cut and Other Cost of Living Relief

Perhaps the biggest surprise from the Budget papers was a tax cut proposal. The lowest tax rate threshold will be reduced from 16% to 15% in 2026, and then again to 14% from 2027. The 1% tax cut in both years means that all taxpayers will at least get $268 next year and $538 in the following financial year if the measures are passed. The federal government has already introduced these new measures in parliament as of this morning.

Energy bill rebates of $75 per quarter will continue to be provided for eligible Australian households and small businesses until 31 December 2025 to help put downward pressure on inflation and energy prices.

Investing in Disaster Resilience

The 2025–26 Budget includes a provision of $1.2 billion over the forward estimates to accommodate additional expenditure on disaster response payments including those following Ex Tropical Cyclone Alfred earlier this month.

The federal government will provide $28.8 million over two years to improve Australia’s resilience to natural hazards and preparedness to respond to disasters. Funding includes:

• $17.7 million in 2025–26 for the Bushfire Community Recovery and Resilience Program to support bushfire resilience activities in rural and regional Australia.
• $5.4 million in 2025–26 to support the National Emergency Management Agency’s (NEMA) continued engagement with the states and territories on a national high speed and high-capacity mobile broadband emergency response capability.

In New South Wales, there will be infrastructure investment of $580 million for upgrades to Townson Road, Burdekin Road and Garfield Road West to support housing growth and flood resilience.

Coalition Response

In a media statement, Shadow Treasurer Angus Taylor termed last night’s Budget as one that has an outlook for the “next five weeks” instead of having a long-term view.

Calling the proposed tax changes a “cruel hoax”, he stated that the Coalition would not support these measures, terming them an “election bribe”.

Mr Taylor also noted that the measures outlined by the current government around cost-of-living relief were inefficient, stating that Australian households are paying more for power despite an energy rebate. Spending on the other hand has increased by $425 billion, meanwhile productivity has reduced by 6%.

You can view the full Budget papers at the Australian Federal Budget website.