On March 25, 2025, Treasurer Jim Chalmers will deliver the Australian Federal Budget for the 2025–26 fiscal year. This budget is particularly significant, as it precedes the forthcoming federal election which is shaping up to be a fierce contest between the major parties. With Treasurer Chalmers signalling ‘meaningful and substantial’ cost-of-living relief, Australians are keenly awaiting measures that address pressing economic challenges. The Treasurer additionally signalled that next week’s budget will end the brief era of budget surpluses, and that the budget will be in deficit.
With an election on the horizon, what can we expect to see in the 2025-26 budget?
Cost-of-Living Relief
The government has signaled its intention to provide substantial cost-of-living assistance. Treasurer Chalmers emphasized that the upcoming budget would include meaningful and responsible measures to alleviate financial pressures on Australians, with details on specific initiatives to be revealed over the next week.
Emphasis on Election Commitments
With the government firmly in campaign mode, we can expect to see some of the previously made election commitments in the budget documents, with their associated costs. Promises like cutting HECs debts for roughly 3 million Australians who have student loans, the government’s cheaper childcare plan and infrastructure commitments like those made to the Bruce Highway in Queensland and the Western Sydney Airport train corridor in New South Wales may feature.
Healthcare and Social Services
A significant election commitment, the government announced plans to bolster healthcare services with a significant investment of $8.5 billion to increase bulk-billed GP visits, provide nursing scholarships, and train more doctors, with the goal of ensuring that by 2030, nine out of ten GP visits will be bulk-billed. We may see some of this additional funding in the 2025-26 budget papers.
Fiscal Responsibility and Debt Management
Australia’s gross public debt has risen significantly,with this year’s budget expected to return to deficit. The budget is expected to outline strategies to manage and reduce public debt which may involve tighter spending controls and measures to enhance productivity, with the Treasurer flagging that ‘responsibility’ would be a key theme of this year’s budget.
