The 2025 Federal Budget, introduced by Treasurer Jim Chalmers, aims to address cost-of-living pressures, strengthen Medicare, and stimulate the housing market. A central feature is the $17.1 billion income tax relief package, set to commence in July 2025. This initiative will reduce the tax rate for incomes between $18,201 and $45,000 from 16% to 15% in 2026–27, and further to 14% in 2027–28, resulting in annual savings of up to $536 for the average taxpayer by 2027.
While these tax cuts have been welcomed by many, some business leaders and economic analysts have expressed concerns regarding the budget's broader vision. The Australian Chamber of Commerce and Industry (ACCI) criticized the budget for lacking a coherent strategy to alleviate pressures on small businesses, describing it as an assortment of unrelated announcements. ACCI CEO Andrew McKellar emphasized that the projected return to structural deficits, reaching 27% of GDP, could hinder Australia's capacity to respond to future economic challenges.
Conversely, economist Chris Richardson highlighted the budget's move to ban non-compete clauses, suggesting that this change could significantly benefit Australian workers and families by enhancing job mobility and potentially increasing wages. The Australian Council of Trade Unions (ACTU) supported this perspective, estimating that the ban could lead to wage increases of up to 4%, equating to approximately $2,500 annually for affected workers.
In addition to tax reforms, the budget introduces a $150 energy bill rebate for all Australian households and small businesses, aiming to mitigate rising energy costs. This measure has been positively received by the Clean Energy Council, acknowledging its role in providing short-term relief amid escalating power expenses.
How ActOn Wealth Can Assist
Navigating the implications of the Federal Budget on personal and business finances can be complex. At ActOn Wealth, we are committed to helping you understand and leverage these changes effectively. Our services include:
Personalized Tax Planning: Tailoring strategies to maximize your benefits from the new tax cuts. news
Business Advisory Services: Assisting small businesses in adapting to policy shifts and identifying opportunities within the new fiscal landscape.
Energy Cost Management: Providing guidance on utilizing energy rebates and implementing measures to reduce ongoing energy expenses.
Contact ActOn Wealth today to ensure you're well-prepared to make the most of the 2025 Federal Budget's provisions.
