The 2025–26 Budget has landed, and while it brings some familiar policies, there are also a few key updates worth your attention, particularly if you’re a small business owner, investor, or family household.
While there’s no shortage of headline figures, the real value lies in what these changes mean for your bottom line.
Personal Income Tax Cuts – Modest But Welcome
From 1 July 2026, personal income tax cuts will start rolling out, reducing the tax rate for incomes between $18,201–$45,000 from 16% to 15%. This drops again to 14% in 2027–28. The savings? Up to $268 in the 2026–27 year, and $536 the year after. Not huge, but better than nothing.
Additionally, the Medicare levy thresholds will rise from 1 July 2024, meaning more low-income earners will pay less tax.
Small Business Support – Still On the Radar
The much-discussed $20,000 instant asset write-off for 2024–25 remains in limbo, still waiting to pass through Parliament. While this and other measures haven’t been locked in yet, they remain in the Budget pipeline for now.
One confirmed update is the extension of the ‘Help to Buy’ scheme, increasing eligibility thresholds and reducing deposit sizes for first-home buyers through government co-ownership.
Energy Bill Relief – More Credits Coming
Households and small businesses can expect an extra $150 in energy credits spread across the second half of 2025. It’s a continuation of previous support but adds up to a bit more breathing room during rising utility costs.
Business Compliance – The ATO Is Coming
The ATO will receive nearly $1 billion in new funding to boost tax compliance programs from 1 July 2025. This includes targeting shadow economy activity, tax avoidance schemes, and personal income tax irregularities. For businesses, this means keeping clean records and staying on top of your obligations has never been more important.
Employment & Wages – A Mixed Bag
The government is aiming to ban non-compete clauses for lower and middle-income workers by 2027, alongside increased scrutiny of wage-fixing and no-poach agreements. While these aren’t financial changes, they could reshape employment arrangements for many businesses.
Wages are forecast to grow by 3–3.25% annually through to 2026, and unemployment is expected to remain low, peaking at around 4.25%.
Economic Snapshot
Australia’s economic growth is expected to remain modest at 2.25% for 2025–26. Inflation is moderating (RBA data)—expected at 2.5% by mid-2025—and wage growth is gradually outpacing it, which is a good sign for households.
The Budget forecasts a deficit of $42.1 billion for 2025–26, with national debt rising to 21.5% of GDP.
What Should You Do Now?
It’s important to assess how these changes, especially around tax, energy credits, and ATO compliance impact your finances. Whether you’re a business owner preparing for end-of-year reporting or a family looking to improve your tax position, there may be opportunities to act.
If you’re unsure how the Budget updates apply to your personal or business situation, our team at Paris Financial is here to help.
Download the full 2025–26 Budget White Paper
For a deeper dive into all Budget announcements, download the full report here:
