Federal Budget - March 2025

For a full detailed overview of this Federal Budget, click here or see the highlights below.
 

The main priorities of the government, as reflected in the Budget, are helping with the cost of living, strengthening Medicare, making it easier to buy and rent a home, investing in education, and building a stronger economy.

Described by the Treasurer as a “plan for a new generation of prosperity in a new world of uncertainty,” the Budget did not include any new measures affecting the taxation or regulation of superannuation or new income tax measures affecting small businesses.

The key measures announced in the Budget include:

• Two new personal tax cuts for all Australian individual taxpayers
• Increased Medicare levy thresholds
• A ban on foreign individuals buying existing homes
• A proposed reduction to student debts

Being the government’s last Budget before the expected federal election, the start dates of a number of previously announced but unenacted tax measures have been deferred until amending legislation is enacted.

The full Budget papers are available at www.budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

The tax and tax-related highlights are set out below.

Individuals

• The marginal tax rate for the personal income tax threshold bracket from $18,201 to $45,000 will be reduced from 16% to 15% from 1 July 2026, and further reduced to 14% from 1 July 2027.
• The Medicare levy low‑income thresholds for singles, families, and seniors and pensioners will be increased from 1 July 2024.
• Student loan debts will be cut by 20% and other reforms will be made to the student loan repayment system from 1 July 2025.
• The start date of the 2024–25 Budget measure to strengthen the foreign resident CGT regime will be deferred from 1 July 2025 to the later of 1 October 2025 or the first 1 January, 1 April, 1 July or 1 October after assent.
• Foreign ownership of housing will be restricted.

Tax administration

• Rules on managed investment trusts will be amended to ensure legitimate investors can continue to access concessional withholding tax rates from 13 March 2025.
• The start date of the 2023–24 Budget measure to extend the clean building managed investment trust withholding tax concession will be deferred from 1 July 2025 to the first 1 January, 1 April, 1 July or 1 October after assent.
• The ATO will be given $999 million in funding over 4 years to extend and expand its tax compliance activities.

Tax agents

• Tax practitioner regulation and compliance will be enhanced by strengthening sanctions available to the Tax Practitioners Board and modernising the registration framework.

Not-for-profits

• The deductible gift recipients list will be updated.

Indirect taxes

• Indexation on draught beer excise and excise equivalent customs duty rates will be paused for a 2‑year period from August 2025.
• The excise remission cap is proposed to be increased from $350,000 to $400,000 each financial year for all eligible alcohol manufacturers from 1 July 2026. The Wine Equalisation Tax producer rebate would similarly increase from $350,000 to $400,000 each financial year from 1 July 2026.
• Additional tariffs on goods that are the produce or manufacture of Russia or Belarus will be extended by a further 2 years.

DISCLAIMER:

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The content of this newsletter is general in nature. It does not constitute specific advice and readers are encouraged to consult their Ruddicks adviser on any matters of interest. Ruddicks accepts no liability for errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice. This information is current as at 26 March 2025, and was published around that time. Ruddicks particularly accepts no obligation or responsibility for updating this publication for events, including changes to the law, the Australian Taxation Office’s interpretation of the law, or Government announcements arising after that time.

Any advice provided is not ‘financial product advice’ as defined by the Corporations Act. Ruddicks is not licensed to provide financial product advice and taxation is only one of the matters that you need to consider when making a decision on a financial product. You should consider seeking advice from an Australian Financial Services licensee before making any decisions in relation to a financial product. © Ruddicks 2025