From personal and business tax to banking, infrastructure, health, climate change, and more, the Federal Budget has implications for every corner of the Australian economy and our position on the global stage.
Here, KPMG’s team of specialists provide unrivalled analysis following the announcement, including insights and implications across industries and businesses, with your next steps interpreted.
Get in touch to understand how we can help your organisation navigate the 2025 budget outcomes.
Federal Budget – by topic
Select a topic below to view KPMG's in-depth analysis.
- Executive summary
- Economic analysis
- Demographics
- Individuals
- Multinational tax
- Mid-market tax
- Business support
- Skills & workforce
- Climate & energy
- Transport & infrastructure
- Social housing & real estate
- Health, ageing & human services
- Defence & Defence Industry
- National security & cyber
- Technology & AI
"This 2025-26 Budget has been a balancing act for the government – trying to appeal to voters before an election through personal income tax cuts and cost of living relief, while also demonstrating fiscal responsibility. While the government has committed to important new measures to provide cost of living relief, it would have been welcome to see a stronger focus on productivity and incentivising business investment."
The Budget shows an expected surplus in the underlying cash balance for 2023-24 of $9.3 billion, a $10.4 billion positive turnaround from the 2023-24 mid-year forecast. Higher commodity prices and personal income tax receipts contributed heavily to the outcome.
Federal Government net debt is expected to remain reasonably stable as a percentage of GDP at between 20 and 22 percent over the forward estimates.
Inflation is forecast by Treasury to moderate to below 3 percent per annum for 2024-25 and the remainder of the forward estimates period. Contributing to this outcome is the extension of the Energy Bill Relief Fund, providing $3.5 billion in support through to 2025-26.
The Future Made in Australia initiative emphasises clean energy and critical minerals and includes more than $13 billion over the period to 2034 (weighted towards the years beyond the current inflation challenge) to fund tax incentives for their production.
The Budget contains additional funding for social and affordable housing infrastructure over the next decade. This should support productivity, including where it enables workers to live closer to their workplace and to other facilities. The increase to Commonwealth Rent Assistance is a sensible complement to these measures.
We also welcome the introduction of superannuation contributions on government-paid parental leave from 1 July 2025, promoting improved gender equality in retirement.
The funding for the development of policies and capabilities to support safe and responsible adoption of Artificial Intelligence technology is also a welcome announcement.
Overall, the Budget measures on energy and housing affordability, combined with the already legislated personal income tax cuts from 1 July 2024, may give households more confidence that cost-of-living pressures will abate. As regards to the productivity challenge, the success of the Future Made in Australia initiative requires education, training, migration, industrial and fiscal policy to all combine constructively. If Australia can achieve this, then the prize may be significant.
The Treasurer has closely aligned this year's Budget deficit with the MYEFO estimate, reaching a headline cash balance of -$27.6 billion. Furthermore, the Treasurer has successfully reduced the projected deficits by $1.2 billion for the underlying cash balance and $5.9 billion for the headline cash balance.
However, despite these reductions, it appears that none of the savings are being transferred to the nation's balance sheet, with gross debt expected to remain at $1.16 trillion by the end of 2027-28, in alignment with MYEFO estimates. Additionally, overall net debt is projected to increase by over $210 billion over the forward estimate period.
Considering this economic context, the provision of tax cuts and widespread cost-of-living relief for all taxpayers and households over the upcoming years was surprising. It is important to note that these initiatives are being financed through debt, rather than windfall gains from rising terms of trade or above-average productivity. This household expenditure is compounded by a continued increase in public sector spending, elevating the role of the government sector in the economy to unprecedented levels.
These factors indicate that this budget is not focused on initiating the reforms required to secure our national finances for the future. Instead, it appears to be an election-focused budget. While current deficits and debt levels may allow this approach for a few years, the policy challenges facing the nation persist and will inevitably need to be addressed.
"This Budget is politically savvy, though economic concerns persist. The Budget serves as a launch pad for the upcoming election; sweetening existing cost-of-living relief measures, but doing so at the taxpayers’ expense."
* Excluding Youth Allowance (student and apprentice)
Economic outlook
- Unemployment rate of 4.25% in 2025-26 reflects a strong labour market for job seekers.
- Cost of living pressures are easing, with growth in CPI expected to fall to 3% in 2025-26.
Budget outlook
- Energy bill rebates.
- Increased access to bulk billing.
Economic outlook
- Cost of living pressures are easing, with growth in CPI expected to fall to 3% in 2025-26.
Budget outlook
- Increased access to bulk billing.
- Cuts to cost of medicines on PBS.
- Energy bill rebates.
Economic outlook
- 3.25% increase in Wage Price Index in 2025-26 will boost wages.
- Cost of living pressures are easing, with growth in CPI expected to fall to 3% in 2025-26.
Budget outlook
- Tax cuts.
- Energy bill rebates.
- Increase in the maximum rates of Commonwealth Rent Assistance.
- Helping to increase supply via $1.5 billion for infrastructure, and more social housing.
In 2024:
Economic outlook
- 3.25% increase in Wage Price Index in 2025-26 will boost wages.
- Cost of living pressures are easing, with growth in CPI expected to fall to 3% in 2025-26.
Budget outlook
- Tax cuts.
- Energy bill rebates.
- $3 billion in incentive payments under the New Homes Bonus to boost housing supply.
- Expanding the Help to Buy program for future first home buyers.
References
- Australian Bureau of Statistics (ABS), Census of Population & Housing, 2021
- Department of Social Services, Benefit and Payment Recipient Demographics, February 2024
- ABS, Consumer Price Index, December 2024
- SQM Research, National Residential Vacancy Rate, February 2024
- ABS Lending indicators, December 2024
Personal income tax rates
The Budget includes a reduction to personal income tax rates.
From 1 July 2026, the 16 percent tax rate will drop to 15 percent, followed by a drop to 14 percent from 1 July 2027.
As a result, Australian taxpayers may receive an extra tax cut of up to $268 for 2026-27 and up to $536 every year from 2027-28 onwards.
| Thresholds ($) | Tax Rates 2024-25 and 2025-26 | Tax Rates in 2026-27 | Tax Rates in 2027-28 |
|---|---|---|---|
| Up to $18,200 | 0 | 0 | 0 |
| $18,201 - $45,000 | 16% | 15% | 14% |
| $45,001 - $135,000 | 30% | 30% | 30% |
| $135,001 - $190,000 | 37% | 37% | 37% |
| From $190,000 | 45% | 45% | 45% |
Whilst not referenced in the Budget, we expect the government may need to give consideration to other measures such as the low income tax super offset (LISTO) given that the marginal tax rate for individuals earning up to $45,000 is now intended to drop below the 15 percent tax rate that would otherwise apply to these individuals’ contributions into superannuation.
Medicare levy threshold changes
Consistent with previous years, to reflect the increase in inflation the government will increase the Medicare levy low-income thresholds from 1 July 2024 by 4.7 percent.
| Taxpayer | 2023-24 Threshold | 2024-25 Threshold |
|---|---|---|
| Singles | $26,000 | $27,222 |
| Families | $43,846 (plus $4,027 for each dependent child) | $45,907 (plus $4,216 for each dependent child) |
| Single Seniors and Pensioners | $41,089 | $43,020 |
| Families (Senior and Pensioner) | $57,198 (plus $4,027 for each dependent child) | $59,886 (plus $4,216 for each dependent child) |
Changes to HELP and student loan repayments
The government has committed to reducing HELP or student loan debt by applying a one-off 20 percent reduction before indexation is next applied on 1 June 2025.
The government will also increase the minimum repayment threshold for HELP and student loan debts from $54,435 in 2024-25 to $67,000 in 2025-26.
HELP repayments will now be calculated only on the income above the new $67,000 threshold, rather than repayments being based on total annual income.
Energy bill relief
The government will continue its energy bill relief measures that were due to expire on 30 June 2025 for an additional two quarters, resulting in two additional quarterly $75 energy bill rebates through to 31 December 2025.
Extension of the Personal Income Tax Compliance Program
The government’s ongoing focus on addressing non-compliance by individual taxpayers continues to be a feature of the allocation of ATO funding in the Budget.
The Personal Income Tax Compliance Program has been allocated $75.7 million over the next four years from 1 July 2025 to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance.
Restricting foreign ownership of housing
Foreign persons (including temporary residents) will not be able to purchase established dwellings for two years from 1 April 2025. The ATO will be provided funding to enforce the ban.
"Additional personal income tax cuts headline the list of measures that aim to provide modest cost of living relief for individuals."
Deferred start date of the foreign resident capital gains tax measure
The government will defer the start date of the previously announced measure to broaden foreign resident capital gains taxation (announced in the 2024-25 Budget), from 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after the Act receives Royal Assent.
The measure is aimed at expanding the foreign resident capital gains tax (CGT) regime to:
- Clarify and broaden the types of assets that foreign residents are subject to CGT on;
- Amend the point-in-time principal asset test to a 365-day testing period; and
- Require foreign residents disposing of shares and other membership interests exceeding $20 million in value to notify the ATO, prior to the transaction being executed.
While the government released a consultation paper on this measure in July 2024, there has been no draft legislation released.
Deferred start date of the extended clean building managed investment trust withholding concession
The government will defer the start date of the previously announced extension of the clean building managed investment trust (MIT) withholding tax concession to data centres and warehouses that meet the relevant energy efficiency standard (announced in the 2023-24 Budget). The amended start date will be the first 1 January, 1 April, 1 July or 1 October after the Act receives Royal Assent.
Clarifying access to concessional MIT rates
Consistent with the Assistant Treasurer’s media release on 13 March 2025, the government will amend tax laws to ensure legitimate investors can continue to access concessional withholding tax rates in Australia that are available to MITs.
The announcement provides welcome clarity on the application of the ATO’s strengthened guidelines to prevent misuse of the MIT regime set out in Taxpayer Alert 2025/1 (TA 2025/1) which was released on 7 March 2025.
The proposed measure will apply to fund payments from 13 March 2025 to make clear that trusts ultimately owned by a single widely held investor are able to access the MIT concessions. The measure aims to "complement" TA 2025/1 which is focused on preventing taxpayers from engaging in non-commercial restructures to inappropriately access MIT withholding tax benefits. The amendments will not affect the ATO's power to act using Part IVA where 'captive MITs' involve other characteristics of the kind set out in TA 2025/1.
Strengthening tax integrity
The government will continue to fund the ATO’s focus on tax integrity by providing $999 million over four years to extend and expand tax compliance activities. The majority of this funding will go to the ATO’s Tax Avoidance Taskforce to scrutinise multinationals and large taxpayers.
Extension of additional tariff
The additional 35 percent tariff on imported goods that are the produce or manufacture of Russia or Belarus, will be extended to 24 October 2027.
Other previously announced measures not in the Budget
There are no further developments in relation to a number of previously announced but unenacted measures, including:
- The significant expansion of the general anti-avoidance rule to schemes that access a lower withholding tax rate or have a dominant purpose of obtaining a foreign tax benefit (announced in the 2023-24 Budget).
- New penalties for mischaracterised or undervalued royalty payments to which withholding tax would otherwise apply (announced in the 2024-25 Budget), and mischaracterised or undervalued dividends or interest payments (announced in 2024-25 MYEFO).
"With an emphasis on cost of living and other pre-election priorities, unsurprisingly, multinational tax measures are not the focus of this Budget."
David Sofrà
National Leader, Workforce & Innovation | Chief Technology Officer, Tax & Legal
KPMG Australia
The ATO will receive additional funding for tax compliance activities. Focus areas will include shadow economy behaviour; non-compliance by individual taxpayers; and ensuring wealthy groups and medium and large businesses make timely payments of tax and superannuation liabilities. This, combined with increased funding targeting multinationals and larger taxpayers, shows that ATO compliance programs are expected to increase over time. As a result, businesses need to ensure that they have appropriate governance in place to meet their tax obligations.
The newly announced personal income tax cuts, whilst modest in nature and deferred in timing, when taken in conjunction with other cost of living relief measures will go some way towards boosting demand in the economy to benefit businesses, including those in the mid-market.
The measures addressing anti-competitive arrangements will provide both challenges and opportunities in a tight talent market for businesses, freeing up movement of labour, but requiring employers to revisit their employment terms. This is intended to boost productivity and reduce inflation.
The Budget provides welcome support for hospitality venues, brewers, distillers and wine producers in the form of a two year pause to the indexation on draught beer excise and excise equivalent customs duty rates from August 2025. Measures also include increases to the caps applying to excise remissions and rebates for brewers, distillers and wine producers from the current $350,000 to $400,000 per annum from 1 July 2026.
No reforms to the taxation of family trusts were announced despite various recent significant court cases creating uncertainty in this space.
There were no significant changes announced with respect to superannuation. However, given Payday Super is proposed to commence on 1 July 2026, this reform will require consideration and planning of business cashflows and processes.
The race will be on to pass measures such as Payday Super, instant asset write-off extension, non-deductibility of ATO interest charges and superannuation reforms before the impending federal election.
"A mixture of modest future tax cuts and cost-of-living relief measures will be welcomed by mid-market businesses, although there remains considerable opportunity to reform the business tax system to turbocharge this sector and remove impediments to growth."
Robyn Langsford
Global Lead, KPMG Private Enterprise Family Business | Partner in Charge, Family Business & Private Client
KPMG Australia
The Budget re-emphasised the government's commitment to fostering a sustainable future through its "Future Made in Australia" initiative announced in the previous Budget, albeit with a refocus on industries with a higher level of maturity and well-established production base in Australia, such as aluminium and iron ore. These investments, along with the establishment of a new Front Door for investors with major transformational proposals, signal the government's focus on transitioning heavy industries to low carbon production and supporting private sector investment in value-adding resources, to maintain Australia’s competitive edge in global markets.
There is a key focus in this Budget to strengthen the Food & Grocery Code of Conduct, as well as the development of a National Food Security Strategy and some measures to continue to support export and trade efforts across agricultural and regional communities.
"This Budget contains few new measures and instead refocuses existing programs in favour of production, regions and small business."
Mathew Herring
Partner in Charge, R&D Incentives and Grants | Co-Lead, Renewables & Cleantech
KPMG Australia
Higher Education
Funding for new university places and University Accord initiatives continues as previously announced. There is little substantive new funding, with the largest key initiative being changes to student loan debts and repayment arrangements.
Early childhood, schools and skills
Education announcements largely build on already released National Partnership Agreement funding (or their equivalents), with top-up funds for immediate out-years, and ongoing funding dependent on future Commonwealth-State negotiations.
For example, further universal preschool funding beyond the current two-year commitment is dependent on a new National Partnership Agreement being agreed between the Commonwealth and States and Territories. At this stage, there is no funding for or mention of addressing recent reporting relating to early childhood quality issues.
This is also largely the case for the National Skills Agreement and associated funding.
Significant new investment over four years has been tied to new initiatives such as reform outcomes including the introduction of Year 1 phonics.
Migration
This was a holding budget for immigration with the government having released its Migration Strategy in December 2023, and the subsequent introduction of multiple immigration reforms in the twelve months up to December 2024.
Workforce
The government plans to ban non-compete clauses for low and middle-income employees (currently earning less than $175,000), aiming to boost wages and worker mobility. These clauses, which restrict workers from moving to competing employers or starting competing businesses, are found to significantly suppress wages and reduce worker mobility, especially for lower-paid workers.
"This is a holding budget in migration, early childhood, schools and skills pending the renegotiation of national partnership agreements. The most significant measure in higher education is the reduction of student debt."
Energy bill relief
The government prioritises cost of living support with $1.8 billion to provide $75 rebates per quarter to the end of 2025 for eligible households and small businesses.
Renewable energy and green metals
The government is providing $2 billion to re-capitalise the CEFC for the first time since it was established in 2012.
Continuing the government’s Future Made in Australia agenda, $3.2 billion will be invested in Australia’s metal industry. This includes:
- $2 billion over 19 years from 2024–25 for Green Aluminium Production Credits to transition to renewable energy.
- $1 billion over seven years from 2024–25 for the Green Iron Investment Fund, with up to $500 million to transform the Whyalla Steelworks.
Announced in last year’s budget, targeted consultation on the $1.5 billion Future Made in Australia Innovation Fund has commenced, which includes $750 million for green metals, $500 million for Clean Energy Technology Manufacturing and $250 million for low carbon fuels.
Climate resilience and disaster response
The budget includes measures to support climate resilience and respond to disasters:
- $1.2 billion has been provisioned to meet the costs associated with recent natural disasters, including ex-Tropical Cyclone Alfred and Far North Queensland floods.
- $28.8 million will be allocated over two years to boost Australia's resilience to natural hazards and disaster response, and $354 million over four years for projects that support flood resilience.
Protecting our environment
An additional $212 million over four years is allocated to protect Australia's natural environment, supporting the government’s goal to protect 30 percent of the nation’s land and waters by 2030.
"The budget prioritises cost-of-living measures through energy bill relief, and adopts a no surprises approach that seeks to deliver on its existing climate and energy policy agenda."
New Infrastructure commitments
- QLD $7.2 billion for Bruce Highway Upgrades
- VIC $3.0 billion, including:
- Sunshine Station ($2 billion)
- Road Blitz ($1 billion)
- NSW $2.8 billion, including:
- Terrigal Drive Upgrades ($115 million)
- South West Sydney Corridor ($1 billion)
- Townson, Burdekin and Garfield Road Upgrades ($580 million)
- Fifteenth Avenue Upgrade ($500 million)
- ACT $20.0 million for Monaro Highway Upgrade Planning
- TAS $280.0 million, including:
- Arthur Highway Upgrades ($200.0 million)
- Southern Outlet Transit Lane Extension ($80 million)
- SA $125.0 million for Curtis Road Level Crossing Removal
- WA $350.0 million for Kwinana Freeway Upgrade
- NT $200.0 million for Stuart Highway Duplication
Existing Infrastructure Investments
- QLD $200.0 million for Rockhampton Ring Road
- NSW $50 million for Homebush Bay Drive
- ACT $30.0 million for Monaro Highway Upgrade
- VIC $1.1 billion for Western Freeway
"The Budget provides further investment in critically needed road and rail projects to further enhance productivity and create jobs in each of the states and territories."
The Budget is focused on delivering against the government’s commitment to reduce cost as a barrier to healthcare. This includes continued investments for initiatives aimed at strengthening Medicare.
The government is committing $8.4 billion to increase access to bulk billing. The majority of this funding, $7.9 billion over four years from 2025–26, focuses on expanding eligibility for bulk billing incentives.
The government is continuing its investment to reduce pressure on hospitals and emergency departments, with an additional $657.9 million allocated to fund 50 new urgent care clinics.
Pharmaceutical Benefits Scheme initiatives are being funded to reduce out-of-pocket costs for patients. $784.6 million is committed to cap the co-payment on medications at $25. A further $1.8 billion will fund new and amended listings, including for cancer and women’s health.
The government is investing in the sustainability of the national health system, with a one-off $1.8 billion injection into public hospitals through the National Health Reform Agreement, and a further $662.6 million over five years to strengthen and support Australia’s health workforce.
The government is committing ongoing support to the aged care workforce through allocating $2.5 billion over five years to meet the increased wage costs of aged care nurses across all aged care programs, which will be delivered through increases that will flow through program indexation. Additionally, there is an ongoing commitment to implementation of aged care reforms, with $291.6 million committed over five years.
In response to the Australian Law Reform Commission’s Inquiry into the Justice System's Response to Sexual Violence, $21.4 million has been committed over three years. These funds focus on extending pilots delivering specialist trauma-informed sexual assault legal services, extending the lived experience Advisory Group, and research to understand reasons for withdrawal of complaints and support provided during investigations.
The government is demonstrating an ongoing commitment to support people with disability and safeguard the National Disability Insurance Scheme (NDIS) through an additional $175.4 million over five years. This includes, $24.4 million dedicated to detecting and responding to fraud, addressing non-compliant payments and the NDIS Appeals Program.
To support inclusion and build the capacity of people with disability and their families, an additional $423.8 million is being committed, largely building on existing budget and resourcing from 2022-23 Budget measures. Within this, $17.1 million is committed over four years to establish the Accessible Australia initiative to increase accessibility to community spaces.
"This year’s Budget reflects the government’s commitment to tackling the impact of cost of living on health, including a range of important initiatives aimed at easing cost pressures to ensure consumers can access care when they need it."
The Budget has confirmed a $50.3 billion increase in funding to the Department to be realised over the next decade, which is aligned to the third epoch within the National Defence Strategy. A total appropriation of $1.79 billion has been carried forward to FY26 into the forward estimate period.
The government has allocated $61.7 million for continued regulatory, safety and policy advice in support of the acquisition of the nuclear-powered submarine capability, distributed across multiple departments and agencies. This includes $11.1 million towards the development of non-proliferation and safeguard arrangements with the International Atomic Energy Agency and diplomatic support through DFA.
The government has extended the uplift program for the Department of Veterans’ Affairs (DVA) systems that processes Veteran claims. This Budget extends that program by $47.6 million. Veterans and their families will benefit from the $11.9 million of services, with $1 million to extend the Volunteer Training in Suicide Recognition and Intervention program for an additional year.
"The Budget held no surprise announcements for Defence with submarine and veterans called out specifically. Overall Defence funding will rise to 2.3 percent of GDP by the early 2030s."
Rebecca Sinclair
Partner, Project & Program Delivery, Deal Advisory Infrastructure & Futures, Lead Partner, Defence & Space
KPMG Australia
Without Ex-Tropical Cyclone Alfred, it is unlikely this Budget would have come to fruition. Consequently, the cyclone has been a central focus of both the Budget and the Treasurer's speech. The government is confronting this fiscal reality by highlighting their record spending on natural disaster recovery this financial year. This includes targeted measures for emergency services agencies and a sensible provision of $1.2 billion over the forward estimates to cover future disaster response payments.
The Pacific region continues to be a priority for the government, with $164.6 million over four years to support growth in the Royal Solomon Islands Police Force (funding for this measure has already been provided ). This investment will assist in building Solomon Islands’ ability to meet its security needs and, importantly, attempt to re-assert Australia’s position as the security partner of choice in our near region.
The Australian Federal Police (AFP) and a number of state, territory and other federal agencies will receive a share of $156.7 million over two years to counter the illicit tobacco trade. The AFP will also receive $38.2 million over four years to fit out and sustain shared Commonwealth facilities at Western Sydney International (Nancy-Bird Walton) Airport.
While this is the first Budget in recent memory with no new money for cyber security, the government has committed $44.6 million over four years to implement the recommendations of the 2024 Independent Intelligence Review.
Funding is aimed at increasing the capacity of the Office of National Intelligence to support initial implementation of key priorities, such as a new assessment function and transformation of classification and information systems. It also includes $14.8 million over four years to enhance the National Intelligence Academy to improve the capability and connectivity of the National Intelligence Community through the delivery of training on intelligence skills.
As announced by the Foreign Minister late last year, Australia has reopened the Embassy in Kyiv, with funding included in the Budget to return diplomatic and consular services. Funding for this measure has already been provided.
The importance of India as an economic partner has been highlighted through the announcement of $20 million to support increased engagement.
The Budget also includes $28.3 million over four years to establish a Commonwealth Parole Board for federal offenders subject to a Commonwealth Parole Order.
"In a cost of living Budget, national security remains a priority. We are seeing funding to support border security, to reaffirm Australia’s unequivocal commitment to Ukraine, and to Solomon Islands Police to bolster our strategic position in the region. At home, we see funding for community safety and social cohesion, strengthening the justice system and building Australia’s resilience to natural hazards, including for impacts of Ex-Tropical Cyclone Alfred."
The government is erring on the side of caution when it comes to investing in digital transformation.
The Budget does not include any new funding for investment in important emerging technology fields, such as Artificial Intelligence and Quantum technologies and unlike previous years this Budget sees decreased government spending on digital transformation initiatives.
Budget measures focus on delivering technology to support the government’s legislative and regulatory reform agenda and providing ongoing funding for previously announced programs.
The government is continuing its investment to enhance health and aged care government systems. In addition to the measures announced to continue the implementation of the Single Assessment System and the staged digital implementation of the Aged Care Act, $15.6 million is also allocated to continue initiatives under the Health Delivery Transformation Program.
There is also an ongoing focus on investment to mitigate fraud risk. There is funding for the National Disability Insurance Agency (NDIA) to implement fraud detection technologies and to improve its ability to detect and respond to fraud and non-compliant payments.
The government also re-affirms its commitment to other digital transformations, including $207 million for the second tranche of stabilising and uplifting ASIC’s business registers , and $228.7 million to continue modernising My Health Record and support digital reform. It also includes $5.3 million to continue oversight of the Digital ID and Identity Verification Service programs.
"This Budget sees limited large-scale technology investment, with government spending focused on progressing in-flight digital transformation programs and enhancements to improve the resilience and user experience of health, human services and regulatory systems."
Download: Federal Budget 2025 analysis
Listen: Federal Budget 2025 – tax implications for business
KPMG Corporate Tax Partner Gabby Burcul and Enterprise Tax Partner Clive Bird discuss the measures announced in the Federal Government’s 2025 Budget, and in particular, what they mean for business.
Watch: KPMG Federal Budget 2025 broadcast
Register to watch our recent analysis of the Federal Budget 2025.
FAQs: Federal Budget 2025
Treasurer Jim Chalmers delivered the 2025 Federal Budget on 25 March 2025.
Superannuation was not a key focus of this Budget. The Budget did report that since MYEFO, superannuation tax receipts were revised up by $9.7 billion over the five years from 2024–25 to 2028–29. The Australia Tax Office continues to work with employers to action unpaid superannuation.
Net Overseas Migration (NOM) is forecast to be 225,000 in 2027–28 and 2028–29. This represents a reduction in NOM from 435,000 (2023-24), 335,000 (2024-25) and 260,000 (2025-26).
The government has committed $2.5 billion over five years to meet the cost of the Fair Work Commission’s decision to increase the wages of aged care nurses across all aged care programs.
The government has committed an additional $175.4 million over five years to the NDIS. This includes $24.4 million dedicated to detecting and responding to fraud, addressing non-compliant payments and the NDIS Appeals Program. It comes after the government passed legislation last year to curb the growth of the NDIS, which the 2024-25 Budget said would save $144 billion over four years.
The government plans to ban non-compete clauses for low and middle-income employees (currently earning less than $175,000), aiming to boost wages and worker mobility. It means that employers would no longer be able to restrict relevant workers from moving to competing employers or starting competing businesses.
The government’s new tax cuts will be phased over two years. They have said this will ensure the fiscal settings are consistent with inflation remaining sustainably in the Reserve Bank of Australia’s target bank.
Budget measures intended to boost productivity include the changes to non-compete clauses, investment in road and rail infrastructure and continued focus on skilling Australians to support the transition to the clean economy. Productivity remains a focus of the government and achieving further gains will be key to the nation’s prosperity.
The 2025 Budget contains few new measures related to industry and manufacturing and instead refocuses existing programs in favour of production, regions and small businesses. For more information, read KPMG’s Federal Budget 2025 analysis of business support measures.
The Treasurer has closely aligned this year's Budget deficit with the MYEFO estimate, reaching a headline cash balance of -$27.6 billion. Furthermore, the Treasurer has successfully reduced the projected deficits by $1.2 billion for the underlying cash balance and $5.9 billion for the headline cash balance. Going forward, reforms will likely be required to address the pressures that are adding to Budget deficits. For more information, read KPMG’s Federal Budget 2025 economic analysis.
The budget implements the government’s energy and climate policies including its flagship Future Made in Australia agenda, including in green metals and hydrogen. For more information, read KPMG’s Federal Budget 2025 analysis of climate and energy measures.
This Budget sees limited large-scale technology investment, with government spending focused on progressing in-flight digital transformation programs and enhancements to improve the resilience and user experience of health, human services and regulatory systems. For more information, read KPMG’s Federal Budget 2025 analysis of technology and AI measures.
The Budget does not contain structural tax reform. There appears to be limited appetite for structural tax reform amongst the major parties, though there could be further announcements during the 2025 Federal Election campaign.
Meet KPMG’s Federal Budget 2025 team
- Item 1
- Item 2
- Item 3
What’s in the budget?
The government is increasing the income thresholds and price caps for its Help to Buy program for first homeowners. The previously announced scheme will look to support up to 10,000 individual and families every four years.
The government will ban foreign persons (including temporary residents and foreign-owned companies) from purchasing established dwellings for two years from 1 April 2025, unless an exemption applies. Exceptions include:
The enhanced compliance approach by the ATO and Treasury to target land banking will ensure foreign investors comply with requirements to put vacant land to use for residential and commercial developments within reasonable timeframes.
What does it mean for your business?
"This Budget continues the government's renewed focus on improving housing supply with a focus on expanding the Help to Buy shared equity scheme."
Josh Cardwell
Partner, Real Estate Tax Leader
KPMG Australia
Dan Jefferson
Partner, Health, Ageing & Human Services, Consulting
KPMG Australia
Paul Morris
Partner, Commercial Advisory & Transactions
KPMG Australia
Jessica Davis
National Sector Lead, Property
KPMG Australia