Budget Update
Federal Election 2025
During the Federal Election campaign, the Government made a number of election promises, which may impact your finances.
During the Federal Election campaign, the Government made a number of election promises, which may impact your finances. There were also a number of support measures proposed in the recent Federal Budget. What could this mean for you?
These announcements are proposals only and may or may not be made law. The information below, including the policy details and proposed start dates, is based on the information announced as at 5 May 2025. You should speak to your financial adviser to discuss how these proposals could apply to you.
Election Promises
Taxation
$1,000 instant tax deduction for work-related expenses
Proposed from 1 July 2026.
What’s proposed?
Taxpayers with eligible work-related expenses may be able to claim a deduction of up to $1,000 without needing individual receipts. Claims over this limit will still be allowed with evidence.
Who could benefit?
The deduction applies to people with ‘labour income’, excluding income from business or investments.
$20,000 small business instant asset write-off extension
Proposed from 1 July 2025 to 30 June 2026.
What’s proposed?
The $20,000 threshold is proposed to be extended by 12 months. Businesses can claim assets under $20,000 as a deduction or pool more expensive assets with 15% first-year and 30% ongoing depreciation.
Who could benefit?
Small businesses with under $10 million annual turnover that install and use eligible assets before 30 June 2026.
Help for Home Buyers
Expanded ‘Help to Buy’ Scheme
Proposed start: To be confirmed.
What’s proposed?
The scheme will allow more home buyers to qualify by lifting income and property price caps. The scheme allows a deposit as low as 2%, with the Government contributing:
Up to 30% for existing homes
Up to 40% for new homes
It is legislated federally, but still requires approval from each state and territory.
Who could benefit?
Singles earning up to $100,000 (up from $90,000)
Couples/single parents earning up to $160,000 (up from $120,000)
Applicants must meet eligibility conditions and repay the Government's contribution upon sale or significant life change.
Previously Announced Measures
Cost of Living Support
Energy bill relief extended
From July 2025.
Two $75 quarterly credits will be applied automatically to electricity bills between 1 July and 31 December 2025.
All Australian households and eligible small businesses qualify.
Lower PBS medicine cap
From January 2026.
PBS scripts capped at $25 (down from $31.60).
Pensioners and concession cardholders will continue to pay $7.70 per script until January 2030.
Student Loans
20% loan reduction
Effective from 1 June 2025.
HELP and other student loans will be reduced by 20% before indexation.
This applies to loans including HELP, VET Student Loans, Apprenticeship Support Loans, and others.
Important:
If you make voluntary repayments before 1 June, your indexed balance will be lower — but the 20% reduction applies to the balance as at 1 June. Compare outcomes before repaying early.
Example:
Scenario | Voluntary Repayment | 1 June Balance (Post 20% Cut + Indexation) | Final Balance |
|---|---|---|---|
Repay after 1 June | $0 | $24,768 | $19,768 |
Repay before 1 June | $5,000 | $20,640 | $20,640 |
Reduced student loan repayment obligations
Proposed from 1 July 2025.
Repayment threshold to increase from $56,156 to $67,000
Repayments will apply only to income above the threshold, not total income
Applies to the same types of loans eligible for the 20% debt reduction.
Expanded ‘First Home Guarantee’ Program
Start date: To be confirmed.
What’s proposed?
Removes income limits, price caps, and participant caps
Enables first home purchase with just a 5% deposit and no Lenders Mortgage Insurance
The Government guarantees the remaining 15%
Who could benefit?
More first home buyers may now qualify — but a smaller deposit can mean more interest paid over the life of the loan.
Superannuation
Higher taxes on balances over $3 million
Proposed from 1 July 2025.
Originally announced in 2023, the legislation lapsed during the election and must now be reintroduced.
What’s proposed?
From 1 July 2025, individuals with over $3 million in super (across accumulation and retirement phases) will be taxed an extra 15% on part of their investment earnings. This is in addition to current tax settings:
Accumulation phase: taxed at up to 15%
Retirement phase: generally tax-free
The new Division 296 tax applies from FY25–26, payable in FY27.
No additional tax is payable if the total super balance is under $3 million at the end of the financial year.
Where to From Here?
These changes are not yet law. Parliament must pass enabling legislation. Details and timelines may change.
You should speak to a financial adviser to understand how these proposals could affect your financial situation.
Source: MLC