| Appropriation Bill (No. 1) 2025-2026 | |
|---|---|
| Submitted to | House of Representatives |
| Presented | 25 March 2025 |
| Parliament | 47th Parliament of Australia |
| Government | Albanese government |
| Party | Australian Labor Party |
| Treasurer | Jim Chalmers |
| Total revenue | A$750.5 billion [1] |
| Total expenditures | A$785.7 billion [1] |
| Tax cuts | A$536 on average [1] |
| Deficit | A$42.1 billion [1] |
| Debt | Gross 35.5% of GDP (A$1,022.0 billion), Net 21.5% of GDP (A$620.3 billion) [1] |
| Website | budget |
‹ 2024 2026› | |
The 2025 Australian federal budget was presented on 25 March 2025 by Treasurer Jim Chalmers. [2] The budget dictated how the Australian Government would allocate an estimated A$785.7 billion across the various departments of the federal government and to the state and territory governments. [1] [3] It was the fourth federal budget handed down by the Labor Party since their victory in 2022 and the last to be handed down before the 2025 federal election in May.
Prior to the budget speech by the treasurer, certain policies were announced, those including: a return to deficits, further power bill relief worth $150 for every bill payer, a boost to funding for Medicare bulk-billing services worth $8.5 billion, funding for additional Medicare urgent-care clinics, cheaper medicines through the Pharmaceutical Benefits Scheme (PBS) with this policy measure worth $689 million, a cut to HECS-HELP debts for students worth $500 million, creating a permanent free TAFE system, the government will spend $9.2 billion on social and affordable housing, an expansion of the government's help to buy scheme — in this scheme the government will part own your home with the option to buy back that equity — with the changes to be worth $800 million and the total policy measure to cost $6.3 billion, the activity test requirement for childcare to be abolished, $7.2 billion to go towards upgrading the Bruce Highway in Queensland, $2 billion for green aluminium, 2.4 billion on a support package for the Whyalla Steelworks that entered voluntary administration in February, a $1 billion boost to defence spending, $45 billion for spy agencies, $272 million on Australian-made radar systems, $650 million for long-range missiles, $262 million for the infrastructure needed to support the development of the AUKUS nuclear submarines, a freeze to the draught beer excise for two years from August which will lose the budget about $200 million in tax revenue, $2.9 million for a yet-to-be announced response for the ACCC's report into the supermarket sector. [4]
The 2025–26 budget was moved from May to March due to the imminence of the 2025 Australian federal election. There was speculation the election could have been held in April but that could not come to fruition due to the impacts of Cyclone Alfred. [5] [6] [7]
The shadow treasurer of the opposition Coalition, Angus Taylor, stated that the Liberal and National parties will not support the tax cuts put forward in the budget measures. [8]
In the opposition's budget reply held during the second reading debate of the appropriations bill revealed that the opposition plans to spend introduce a national gas plan to lower bills by creating a domestic reserve supply of gas which Peter Dutton said would lower prices by 10–20%, the Coalition would also reduce the fuel excise from 50 cents to 25 cents, the Coalition also reaffirmed its plans to cut immigration numbers, the Coalition would increase the amount that small businesses can claim on tax write-offs from $20,000 to $30,000 and that the Coalition would implement a previously announced policy that would allow small businesses making up to $10,000 to claim up to $20,000 on meal expenses, the Coalition said they would cut roles in the public sector, the Coalition will invest $9 billion in Medicare, they will also cap medicines at $25 following the government's announcement, the Coalition also plans to invest $400 million in mental health services. [9]
Senator for the Australian Capital Territory (ACT) David Pocock stated that the budget fails to deliver adequate funding for services and infrastructure for the ACT. [10]
Senator for Tasmania Jacqui Lambie stated that the tax cuts should not be going to politicians and wealthy people, this follows her criticism that previous cost-of-living relief such as power bill subsidies should be means-tested. [11]
The Greens have proposed taxing profits of large corporations to pay for their plans to put dental care into Medicare, mental health care into Medicare, cap rent increases, lower mortgages and take strong climate action. [12]
Further to the Greens' announcements regarding the budget, they have announced that they will spend at least 1% of the budget on environmental measures, which would see the government spend an additional $17 billion. [13]
On 26 March 2025, the tax cuts proposed in the budget passed both chambers of parliament. The Coalition has vowed to repeal these tax cuts if elected to office at the May election. [14]
EY's chief economist Charelle Murphy, and senior economists Paula Gadsby and Nicholas Hordern stated that they were disappointed not to see substantial funding for innovative practices in business or for encouraging competitive practices, but noted that there were cost-of-living relief measures at the expense of fiscal repair and business assistance. [15]
Independent economist Saul Eslake stated that there are challenges to raising sufficient revenue but praised certain reforms such as the decision to ban the use of non-compete clauses. He also criticised the outsized distribution of the GST to Western Australia. [16]
CPA Australia stated that the budget "lacks ambition and a thorough understanding of what business needs." Chief executive officer Chris Freeland further encouraged the government to cut red tape. He also said that the instant asset write-off should have been made permanent. [17]
The budget will:
It was projected that the budget would result in a net deficit after three years of surpluses, with a predicted loss of A$42.1 billion. [18]
The budget includes total government spending estimated to total A$785.7 billion. [18]
The 2025-26 Budget Paper 1 provides a high-level overview of government spending and revenue projected from the budget. [18]
| Major category | Spending | Percentage of government spending |
|---|---|---|
| Social security and welfare | A$290.9 billion | 37.0% |
| Health | A$124.8 billion | 15.9% |
| General purpose inter-governmental transactions | A$99.9 billion | 12.7% |
| Other | A$149.7 billion | 19.1% |
| Defence | A$51.4 billion | 6.6% |
| Education | A$54.0 billion | 6.9% |
| General public services | A$31.4 billion | 4.0% |
| Interest | A$23.9 billion | 3.0% |
| Transport and communication | A$16.5 billion | 2.1% |
| Fuel and energy | A$19.2 billion | 2.4% |
| Major category | Revenue | Percent of government revenue |
|---|---|---|
| Individuals and withholding tax | A$335.6 billion | 47.1% |
| Company tax | A$141 billion | 19.9% |
| Goods and services tax | A$92 billion | 12.9% |
| Non-taxation revenue | A$52.6 billion | 7.4% |
| Excise and customs duty | A$47.28 billion | 6.6% |
| Other taxes | A$23 billion | 3.2% |
| Superannuation fund taxes | A$19.8 billion | 2.8% |
Tax cuts revealed in the federal budget have passed the Senate in a late-night sitting, with the support of the Greens and the crossbench, but not Coalition senators.
