Australia’s 2025-26 Budget: Tax cuts, student debt relief and housing — All you need to know – The Times of India-OxBig News Network

The Australian government has unveiled its 2025-26 federal budget, focusing on cost-of-living relief, tax cuts, and support for households, students and businesses.
With a general election approaching, Australia’s treasurer Jim Chalmers introduced several measures aimed at easing financial pressure on Australians while addressing key economic challenges, including housing affordability and slowing economic growth, reported Bloomberg.
Tax cuts
One of the most significant highlights is the extension of tax cuts, which will reduce the tax rate for those earning between A$18,201 and A$45,000 to 14% by July 2027.
According to Bloomberg, these cuts will result in an average tax saving of A$2,548 by the 2027-28 financial year.
Household benefits
Households and small businesses will also receive automatic energy bill relief, with A$150 deducted from their power bills in quarterly instalments starting in July.
This initiative is part of a broader A$1.8 billion package to help Australians cope with rising electricity costs, reported The Sydney Morning Herald.
Healthcare
The government has pledged an A$8.5 billion investment in Medicare, expanding bulk-billed health services to reduce out-of-pocket expenses for patients.
Additionally, A$689 million has been allocated to lower the cost of medicines under the Pharmaceutical Benefits Scheme, with the maximum cost of many medications dropping from A$31.60 to A$25.
Student debt relief
Student debt relief is another major policy announcement, with the government planning to wipe out 20% of student debt, benefiting over three million Australians.
The move, combined with revised repayment thresholds, will cut an average of A$5,400 per student from outstanding loans, amounting to A$19 billion in total debt relief, according to The Sydney Morning Herald.
Housing
Housing affordability remains a critical issue, yet the budget offers only limited solutions. The government announced an A$54 million investment in modular and prefabricated home construction to speed up development.
The Help to Buy shared equity scheme has also been expanded from A$5.5 billion to A$6.3 billion, allowing more Australians to enter the housing market with lower deposits.
Infrastructure developments
For infrastructure, major investments include A$7.2 billion for Queensland’s Bruce Highway, A$1 billion for Sydney’s Southwest Rail Link and A$2 billion for Melbourne’s airport rail station upgrades.
Challenges and criticism
Despite these initiatives, the budget is projected to return to an A$27.6 billion deficit in 2024-25, deepening to A$42.1 billion in 2025-26. While economic growth is expected to improve slightly, inflation remains a key concern, with the Reserve Bank of Australia carefully monitoring public spending.
Defence spending has also drawn attention, with no major new commitments beyond a slow increase to 2.3% of GDP by the early 2030s.
This falls short of the 3% defence spending target encouraged by US President Donald Trump, potentially straining Australia’s relations with the United States, as per Bloomberg.
With the upcoming election, the Albanese government is balancing economic relief measures with long-term financial sustainability.
While tax cuts, student debt relief, and healthcare funding are welcomed, concerns over housing, fiscal discipline and defence spending may shape voter sentiment in the months ahead.