Federal Budget 2025 Analysis
Below is our analysis and coverage of the 2025 federal budget, originally published in our newsletter, The Cave. Sign up to get fresh insights every week.
If you'd like to know more about what all this means for you, how to prepare for the next parliamentary term, and potentially another budget later this year, get in touch.
A budget for all Australians. And pandas.
If you've ever received a comms brief, you’ve almost certainly seen one where the target audience is - *gestures at the nation* - all Aussies. It’s a big ask.
But with a budget of $785.7B, and an accompanying economy of approximately $3 trillion, it might be doable. And the man with the best haircut in politics, Treasurer, the Hon Dr Jim Chalmers MP, has certainly had a go. The Oprah of #AusPol has something for everyone.
It’s the budget that wasn’t supposed to happen, and Chalmers’ fourth budget in just three years (the last person to hand down a 4-in-3 Budget was Ben Chifley following WWII, in preparation for the inevitable Good Weekend Quiz question).
Unless a Trump adviser has added someone in the Department of Defence to a Signal group chat while we’ve been fixated on Parliament House, we aren’t at war. But Chalmers maintains a fourth term budget is necessary to “put the economy front and centre, on the eve of an election, and bring our policies and plans together”.
The cost of…winning an election
Unsurprisingly, these policies and plans are heavily focused on the cost of living, which the latest Ipsos issues poll has Australians (65%) continuing to rate as the most pressing issue they face.
Jim and Albo couldn't take the traditional pre-election budget path of spending their way to glory, because they would shoulder the blame for fueling the black winds of inflation and face greater scrutiny over spending from the Opposition.
As such, Chalmers tiptoed a delicate tightrope, avoiding cash handouts while delivering $14.6B worth of cost-of-living relief to household budgets in the form of two new rounds of tax cuts starting in 2026 (justified by the $1B for the ATO to boost its tax compliance procedures); energy bill relief to the tune of $150 off your power bill; cheaper healthcare; and another $19B of student debt relief.
More broadly, the government had two jobs to do tonight - cement themselves as responsible economic managers and reassure everyone that things will get better, fast.
Apparently Venus is in Retrograde & the Economy is Looking Up
The economic headwinds look to be playing ball, with economic growth lifting slightly, inflation falling faster than expected (and set to be in the RBA’s sweet spot six months earlier than expected), and unemployment remaining at close to record lows.
But that pesky overall deficit result leaves the door wide open for political attacks from the Opposition that Labor has failed to curb spending enough.
Whoever wins in May, trade wars, population growth and an ageing population will surely mean more government spending is on the horizon.
Here’s your topline talking points:
Black has turned red 📉, with previous surpluses becoming a $42.1B deficit. That is approximately 8.1 billion coffees, or enough for a coffee a day for 22.18 million years (or probably around 7 million years with the current rate of inflation).
Coming soon 👀…Labor’s got a little up its sleeve to play with during the election, with $457.3M in decisions undertaken but not yet announced between both payments and receipts measures.
Pandering to Pandas 🐼: by far the most entertaining spend for the night goes to $7.6M over the next decade to support the Giant Pandas at Adelaide Zoo (insiders tell us this is not enough for the top shelf bamboo required to avoid some hangry pandas).
Sausages incoming 🌭
With attention now turning to an election (The Cave’s money is on a 3rd May sausage sizzle), hopefully we haven’t gone to all this effort and missed MAFS for, as Shadow Treasurer Angus Taylor put it a budget for, “the next five weeks, not the next five years”.
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(Almost) everyone's a winner
This is usually the most telling section of the budget - whose vote or influence is the government trying to court?
This year the budget is less about winners and losers, and more about everyone getting a participation award.
You could count yourself not lucky per se, but counted if you…pay income taxes, hold a Medicare card, have children, are currently getting an education or have student debt, are a woman, buy medicine, are a first home buyer, pay for electricity, have elderly loved ones, or are a panda. You get the idea.
Losers - or rather the largely ignored - include corporates, small business, foreign investors in Australian property, welfare recipients, the manufacturing sector (except in the booze and metals space), technology, AI, and innovation (which is mentioned once in the entirety of Budget Paper 2), people impacted by chronic disease, and the 42.9% of Australians who will experience mental ill health.
In a pretty beige budget, the measures for these sectors and groups range from lacklustre to non-existent.
Dive deep on departmental dollars
FOR A FULL DEEP DIVE 🤑🤿 INTO FUNDING MEASURES OVER $20M, CLICK HERE.
Cost of Living
Providing new tax cuts for every Australian taxpayer ($17.1B over five years).
Increasing access to bulk billing ($8.4B over five years from 2024–25 and $2.5B per year ongoing).
Continuing energy bill rebates of $75 per quarter for eligible Australian households and small businesses ($1.8B over two years).
Lowering the Pharmaceutical Benefits Scheme (PBS) general patient co‑payment from $31.60 to $25.00 ($784.6M over four years from 2025–26 and $236.4M per year ongoing).
Increasing support for housing, including increasing the supply and adoption of pre-fabricated and modular housing construction ($58.8M over five years).
Supporting the states and territories to scale up existing projects for prefabricated and modular housing construction ($49.3M over two years).
Funding the ACCC to crack down on misleading and deceptive pricing practices and unconscionable conduct in the supermarket and retail sector ($38.8M).
Funding to assist fresh produce suppliers to understand and enforce their rights under the Food and Grocery Code to achieve more favourable commercial outcomes when negotiating with large grocery businesses ($2.9M over three years).
Cutting student loan debt for 3M Australians ($19B in savings).
Treasury and Finance
Energy bill rebates of $75 per quarter for eligible Australian households and small businesses ($1.8B over two years).
Extending and expanding the ATO’s tax compliance activities, including funding for the Tax Avoidance Taskforce, the Shadow Economy Compliance Program, the Personal Income Tax Compliance Program and the Tax Integrity Program ($999.0M over four years).
Extending the operation of the National Anti‑Scam Centre within the ACCC ($6.7M in 2025–26).
Health and Aged Care
Continuing the delivery of aged care reforms and the implementation of recommendations from the Royal Commission into Aged Care Quality and Safety ($291.6B over five years; and an additional $12.7M in 2029–30).
Extending the 2020–2025 Addendum to the National Health Reform Agreement to 30 June 2026 ($33.9B in 2025–26).
Increased access to bulk billing ($8.4B over five years; and $2.5B per year ongoing), including expanding eligibility for bulk billing incentives; introducing new and amending existing items on the MBS; and continuing to modernise My Health Record and support the digital health reform agenda.
Funding residential aged care, the Home Care Packages program and the Support at Home program ($2.5B over five years; and an additional $6.1B from 2029–30 to 2034–35).
Meeting the cost of the Fair Work Commission’s decision for aged care nurses with funding to other aged care programs including residential aged care ($2.5B over five years; and an additional $6.1B from 2029–30 to 2034–35).
New and amended listings on the Pharmaceutical Benefits Scheme (PBS), Repatriation Pharmaceutical Benefits Scheme, Stoma Appliance Scheme and Take Home Naloxone program ($1.8B over five years).
Continuing to strengthen and support Australia’s health workforce ($662.6M over five years from 2024–25; and $230.9M per year ongoing).
Employment and Workplace Relations
Delivering increased support for apprentices. Funding includes $626.9M to reframe the New Energy Apprenticeships Program as the Key Apprenticeship Program, and $77.8M to extend the current interim Australian Apprenticeship Incentive System program settings ($722.8M over four years).
Delivering the second tranche of stabilisation and uplifting of the ASIC business registers ($207.0M over two years).
Industry, Science and Resources
Investing in the future of Australia’s metals industry ($3.2B over 19 years), including Green Aluminium Production Credits to provide production based grants to support Australian aluminium smelters switching to renewable electricity before 2036; Green Iron Investment Fund to fund green iron projects through capital grants to support producers to establish or transition into low emissions facilities in Australia; immediate on the ground support to stabilise the Whyalla Steelworks during administration.
Climate Change, Energy, Environment and Water
Recapitalising the Clean Energy Finance Corporation to invest in renewable energy, energy efficiency and low emissions technologies ($2.0B).
Protecting more of Australia’s natural environment, including funding for Saving Australia’s Bushland program; additional funding for the Cairns Water Security Project in Queensland to secure long‑term water security for Cairns; and renewing lease arrangements with the Traditional Owners of the jointly managed Booderee, Kakadu, and Uluṟu‑Kata Tjuṯa National Parks ($212.0M over four years from 2025–26; and an additional $50.0M in 2029–30).
Home Affairs
Funding additional disaster response payments following Ex‑Tropical Cyclone Alfred ($1.2B provision over four years) .
Supporting additional social cohesion in Australia ($178.4M over five years from 2024–25 and $1.2M per year ongoing).
Strengthening Australia’s border security ($84.5M over four years), including addressing border and biosecurity threats from illegal fishing activities in Australia’s northern waters ($74.9M in 2025–26).
Social Services
Supporting inclusion and building the capacity of people with disability and their families ($423.8M over five years from 2024–25 and $150.0M per year ongoing), including
Redesigning the Information, Linkages and Capacity Building program to provide general supports for people with disability and their families, carers and kin ($364.5M over five years from 2024–25 and $150.0M per year ongoing).
Delivering the National Autism Strategy and implement the Strategy’s First Action Plan ($42.2M over five years from 2024–25 and an additional $0.1M from 2029–30 to 2031–32).
Safeguarding the integrity of the NDIS and support people with disability ($175.4M over four years from 2025–26 and $43.8M per year ongoing), including continuing the enhancements to the NDIA’s fraud detecting information technology systems ($151.0M over four years from 2025–26 and $43.8M per year ongoing).
Defence and Veterans’ Affairs
Support the delivery of Government priorities in the Attorney‑General’s portfolio ($194.5M over five years).
Continuing to provide regulatory, safety and policy advice in support of Australia’s acquisition of a conventionally‑armed, nuclear‑powered submarine capability ($61.7M in 2025–26).
Foreign Affairs and Trade
Supporting growth in the Royal Solomon Islands Police Force and building Solomon Islands’ ability to meet its security needs ($164.6M over four years from 2024–25).
Funding for the Australian Embassy in Kyiv, returning diplomatic and consular services to Ukraine ($36.0M over five years from 2024–25 (and $7.8M per year ongoing).
Increased support for economic engagement with India ($20.0M over four years from 2025–26), including establishing an Australia‑India Trade and Investment Accelerator Fund to support cooperative projects targeted at reducing technical and regulatory barriers to trade ($16M in 2025-26).
Agriculture, Fisheries and Forestry
Funding to support priorities in the Agriculture, Fisheries and Forestry portfolio ($45.2M over three years from 2025–26), including sponsoring agricultural trade events ($23.8M over three years).
Infrastructure, Transport, Regional Development, Communications and the Arts
Funding road and rail infrastructure priorities to support productivity and jobs ($17.1B over ten years). Funding includes
New Infrastructure Investment Program projects across Australia.
Existing Infrastructure Investment Program projects or corridors, including the Western Freeway in Victoria; the Rockhampton Ring Road in Queensland; Homebush Bay Drive in New South Wales; and the Monaro Highway Upgrade in the Australian Capital Territory.
Upgrading the remaining 622,000 NBN premises on the national fibre‑to‑the‑node (FTTN) network ($3.0B over seven years).
Education
Funding to jurisdictions which have signed Better and Fairer Schools Agreement (Full and Fair Funding 2025–2034) Bilateral Agreements, including New South Wales, South Australia, Tasmania and the Australian Capital Territory ($407.5M over four years from 2025–26; and $7.2B from 2029–30 to 2035–36).
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