Last night, the 2025–26 Australian Federal Budget handed down carried all the hallmarks of a pre-election budget, with a strong focus on cost-of-living relief, infrastructure investment, and healthcare improvements.
Treasurer Jim Chalmers has unveiled $17.1 billion in tax cuts aimed at providing cost-of-living relief to working Australians. Per the Treasurer’s budget remarks, these cuts are expected to benefit all taxpayers, with individuals receiving up to $268 in the 2026 financial year and up to $538 in the subsequent year.
Economically, the budget forecasts underlying inflation returning to the Reserve Bank’s target range of 2-3% by June, six months earlier than previously anticipated. This outlook suggests the economy is recovering from recent inflationary pressures, however the economy is not yet out of the woods, with the budget deficit forecast for 2025-26 at $42.1 billion.
One of the most telling signs of a pre-election budget is the direct financial relief for voters. The inclusion of $1.8 billion of energy bill rebate, $1.8 billion investment to reduce the cost of medicines on the pharmaceutical benefits scheme (PBS) to a $25 upper limit, and a $8.5 billion investment to lower bulk-billing rates, signal that the government is keen to ease household expenses ahead of the election. The latter has been described by Treasurer Jim Chalmers as ‘the single biggest investment in Medicare since its creation.’ By providing these benefits before the campaign is officially called, the government is endeavouring to reflect the issues that matter most to voters, before they decide at the ballot box.
Another key element of a budget designed with an election in mind is large-scale infrastructure spending, which not only stimulates the economy but also creates jobs and delivers visible improvements to communities. The commitment to major projects, including Bruce Highway upgrades in Queensland and $1.2 billion for Cyclone Alfred recovery, is likely aimed at securing support in key marginal seats and states like Victoria, where Victorian Labor has struggled in the polls. Further, an investment of $54 million to accelerate modern methods of housing construction reflects the importance of the issues of housing supply to voters across the nation.
Ultimately, while the budget incorporates necessary long-term investments, its timing and focus suggest a strong political strategy aimed at boosting the government’s standing before the next election. By delivering immediate financial relief while making promises of future prosperity, Labor is setting the stage for a campaign built around economic management and cost-of-living support.
If you’re looking for hep with your government engagement strategy this election, Fifty Acres is happy to help. Connect with us at jo@fiftyacres.com.
