Federal budget 2025 – what’s in it for you
I have been analysing and explaining benefits and drawbacks of federal budgets on this channel since 2020, therefore this is 5th budget we are talking about.
Let’s go over recommendations that are impacting pre-and post- retirement and you can be the judge of how beneficial the budget is for you.
Here are changes introduced in the new Budget 2025
TAX
- Reduction of the lowest Marginal Tax Rate – people earning up to $45,000 will have their tax rate reduced from current 16% down to 15% in 2026/27 and 14% in 2027/28 as per table:
How much tax will that save you?
As you can see per table listed, hardly life changing, if this is how our government assist with the rising cost of living, well…. I think they live on another planet, because my cost of living and all of our clients are rising much more that the amounts listed in the table.
I am still waiting when the tax-free threshold will be increased, as this would be the best way to really support and provide a proper benefit to the low-income earners, especially in combination with updating the low-income tax-offset.
Considering the recommended tax rates reductions, please be aware what types of super contributions are beneficial to be made from now on.
COST OF LIVING
- Energy bill relief extended for six months: All Australian households and eligible small businesses will receive an additional energy rebate of $150. The rebate will be automatically applied to electricity bills between 1 July and 31 December 2025, in two quarterly instalments of $75.
- Cheaper medicines: The maximum cost of Pharmaceutical Benefits Scheme (PBS) medicines will decrease from current $31.60 to $25 per script from 1 January 2026. Pensioners and Commonwealth concession cardholders will still only pay the subsidised rate of $7.70 per PBS script until 1 January 2030.
- Medicare bulk billing incentives: Incentive payments will be introduced to expand bulk billing to all Australians from 1 November 2025.It is expected that Nine out of 10 GP visits are to be bulk billed by 2030.
SOCIAL SECURITY
- No mentioning of further freezing of deeming rates – this could be a worry for some retirees. As a reminder, deeming rates have been frozen since 1st July 2022, originally for 2-year period, but with further extension for the current financial year, therefore until 30th June 2025.
Current deeming rates are as per table:
For now, there is no news what will happen to those rates from 1st July 2025.
That’s it, this is all the government could come up with for the benefit of retirees and those that are preparing for retirement.
In all honesty, this budget is the biggest waste of time I have ever seen.
One can tell very easily that it was put together in a hurry, to gain votes, rather than any actual benefit for Australians.
Let me know what your opinion of this budget is and where is your benefit coming from.
By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement
