The 2025-26 budget was handed down this week. It was a budget that many thoughts would not be delivered with an election looming so close, however it has been pointed out that many of Labor’s election promises are now being delivered in the form of the budget.
An Overview
The usual budget issues were addressed and as usual there were winners and losers in this budget. Cost of living remained a high priority and was addressed in the form of income tax cuts, energy bill rebates, an increase in the Medicare levy threshold, a reduction to the cost of PBS listed medications and an increase in bulk billing rates.
The Main Points
Housing Market – Foreigners including temporary residents will be banned from buying existing homes in Australia for two years.
Taxpayers – Taxpayers will receive income tax cuts from 1 July 2025 which could mean an additional $268 in their pocket.
Electricity – Rebates on electricity bills will be extended by six months, providing another $150 to households and small businesses.
Student Debts – A one-off 20% reduction to student debts could see $5,520 wiped from the average higher education loan, however this reduction is contingent on Labor winning the election.
Australian Products – A $20 million dollar investment in initiatives to encourage consumers to buy Australian-made products. This is mainly in response to Donald Trump’s tariff campaign.
Childcare – Three days of subsidised childcare will be made available to families from January 2026. This was an election promise but was passed through legislation in February.
Disaster Recovery – The government will contribute another $1.2 million dollars to Cyclone Alfred recovery.
Major Roads – $17.1 million dollars will be rolled in to major construction projects over the next 10 years.
First Home Buyers – The Help to Buy scheme will be expanded to enable more people to co-purchase a home with the federal government.
Health – Incentive payments to GPs will be tripled so they can bulk bill more patients. $664 million will also be spent to build another 50 urgent care clinics by the middle of next year.
Pharmaceutical Benefits Scheme – The government will fund a further reduction in the price of PBS listed medications.
What the Budget Means for Migration
As with any budget announcement, migration was addressed. While migration contributes greatly to Australia’s economy, many feel very little was said about migration with many curious to hear Australia’s 2025-26 migration strategy.
What was mentioned was Treasury’s forecast that overseas net migration (temporary migrants) will drop by 75,000 in the next financial year. It’s forecasted to drop from 335,000 this year to 265,000 next year followed by 225,000 the year after. International students make up a large proportion of this number and it seems they may be a target when it comes to reducing net migration. The Labor Party introduced a range of measures to limit the number of international students entering Australia but were prevented from legislating a hard cap.
Foreigners including temporary migrants will be banned from buying existing houses in Australia for two years from April 2025. This will result in a loss of foreign investment application fees which could cost the government $90 million dollars over five years.
What the Opposition Has to Say
The coalition has dubbed this budget as not only a budget for the next five weeks but also an election bribe.
In response to the Labor budget, Liberal leader, Peter Dutton announced the following:
– The introduction of a National Gas Plan that would prioritise domestic supply of gas and drive down energy bills
– Cuts to fuel excise from about 50 cents to 25 cents per litre
– A $5 billion investment in essential infrastructure to create 500,000 new homes
– Increasing asset write-offs for small businesses to $30,000
– Cuts to public servants excluding frontline delivery roles
– A $9 billion investment in health which includes the Labor party’s promise to deliver cheaper PBS listed medications
– A $400 million commitment towards youth mental health
In addition, where migration is concerned, Dutton confirmed that if elected, he will cut the permanent migration program by 25 percent. Permanent migration levels currently sit at 185,000; under this plan approximately 46,000 places will be cut.
He also supports Labor’s plan to ban foreign investors and temporary residents from purchasing existing Australian homes for a period of two years. He believes these measures will free up housing and assist Australians to enter the property market.
There will also be stricter caps on international student numbers in an effort to relieve stress on the rental market.
An Australian federal election has been called for Saturday 3 May 2025.
If you would like to learn more about any aspect of migration, contact the experienced team of registered migration agents at Visa Solutions Australia. Book a consultation.
