Australian Federal Budget 2025-26: Marsh McLennan analysis

Expert analysis and key insights from the Marsh McLennan group of companies on how the Australian Federal Budget 2025-26 will impact businesses.
 

In a pre-election budget shaped by cost-of-living pressures and global uncertainty, Treasurer Jim Chalmers unveiled cost-of-living relief measures, including modest tax cuts for all workers and funding to lower the cost of healthcare.

Positioned by the Treasurer as "a plan for a new generation of prosperity in a world of uncertainty," the 2025-26 Budget addresses immediate challenges while acknowledging the looming "storm clouds" in the global economy. Despite confirming a deficit of $27.6 billion, Chalmers asserted that Australia is "among the best placed" to navigate global uncertainty.

Key highlights:

  • Following consecutive surpluses, this year’s Budget returns to a deficit of $27.6 billion but projected debt levels remain low compared to other developed economies 
  • Cost-of-living relief measures include small tax cuts for all Australian taxpayers in both the 26-27 and 27-28 financial years and a 6-month extension of the energy rebate for eligible households and small businesses
  • The government committed at least $1.2 billion to Ex-Tropical Cyclone Alfred recovery, with a short-term impact on growth and inflation.

  • $500 million Clean Energy Manufacturing Fund aimed at bolstering the production of renewable energy components.
  • Critical Minerals Production Tax Incentive, offering a 10% production credit on relevant processing and refining costs for battery production, green hydrogen, and critical minerals to bolster domestic supply chain resilience
  • Significant investments in vocational education and training, including additional fee-free TAFE places, aimed to enhance skill development, and strengthen economic stability, equipping Australia to thrive in a transitioning global economy.

  • The 2025–26 Budget did not introduce new superannuation measures, but key proposals like Payday Super, the $3 million super tax, and financial advice reforms remain in progress.
  • Additional funding to the ATO to aid timely payment of tax including an estimated $31.0 million in unpaid superannuation to be disbursed to employees.
  • Broader reforms continue to focus on improving access to financial advice, expanding retirement income options, and enforcing service standards.

  • The abolition of non-compete clauses that hinder job mobility and suppress wages for affected workers is anticipated to increase wages.
  • $793 million of funding targeting specific women’s healthcare and increased funding for childcare has the potential to assist in increasing female participation in the workforce.
  • $46 million committed to improving digital mental health services - supporting both individuals and workplace wellbeing initiatives.

The Budget in detail


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    This document and any recommendations, analysis, or advice provided by MMC (collectively, the ‘MMC Analysis’) are not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Any modelling, analytics or projections are subject to inherent uncertainty, and the MMC Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and MMC, MMC shall have no obligation to update the MMC Analysis and shall have no liability to you or any other party with regard to the MMC Analysis or to any services provided by a third party to you or MMC.

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