Every cost of living measure in the 2025 federal budget, as new tax cuts announced

Aussies will benefit from new energy bill rebates, a small tax cut, changes to student debt, cheaper medicines and more bulk-billed GP visits, with the Albanese government targeting battlers in its 2025 federal budget.

Treasurer Jim Chalmers says the tax cuts are only part of the government’s approach to the cost of living crisis many are still feeling despite inflation dropping to 2.4 per cent.

“I’m not going to give people free advice on how they spend their tax cuts. Accumulatively the three tax cuts mean about $50 a week in benefit on average,” Mr Chalmers told NewsWire.

“Some Australians will save them, some Australians will spend them, they’ll make their own decisions in their household budgets.

“My job is to provide as much cost of living relief as I possibly can

“The tax cuts are part of but not the only part of that story; strengthening Medicare, cheaper medicines, cheaper early childhood education, energy rebates, cutting student debt, all of this is about providing the cost of living relief Australians need and deserve.”

Here’s every cost of living measure included in this year’s federal budget and how it will affect you.

Tax cuts

Headlined by tax cuts, every Australian will be eligible for tax relief – albeit minor in comparison to the stage three tax cuts delivered last year.

From July 1, Australians making on average $79,000 a year will pocket $268 (or $5.15 a week) in 2026-2027, before going up to $536 a year (or $10.30) in 2027-2028.

“Every Australian taxpayer will get a tax cut next year and the year after, to top up the tax cuts which began last July,” Mr Chalmers said.

“This will take the first tax rate down to its lowest level in more than half a century.

“These additional tax cuts are modest but will make a difference.

“This is on top of the $2190 delivered for the average Australian through the stage three tax cuts last year. In total, the average Australian will get a total tax cut of $2548, or about $50 a week.”

The budget papers reveal the average Australian taxpayer will now pay $30,000 less in tax by 2035-2036.

Mr Chalmers also announced an increase in the Medicare levy low-income thresholds, which he said was extra tax relief for more than a million Australians.

“Our $17bn in tax cuts are the biggest part of the responsible cost-of-living package in this budget,” he said.

Electricity prices

All households will get $150 wiped from their power bill for the second half of this year, in a limited extension of the current rebate scheme. This will once again be two $75 quarterly payments applied directly to every Australians power bill.

The rebates will continue to apply to most small businesses as well.

Currently, every Australian household receives a $300 rebate on their electricity bills, in four quarterly instalments as part of the government’s 2024 cost of living measures. That was due to end from July 1, bus now been extended for a further six months.

Separate figures from the ABS showed electricity prices fell by 9.9 per cent in the December 2024 quarter, following a fall of 17.3 per cent in the September 2024 quarter.

The extension of the scheme will offset power bill increases expected in NSW, South Australia and southeastern Queensland following a draft ruling by the Australian Energy Regulator (AER).

Cheaper medicine and doctor visits

Another major election pledge has been cheaper medicines and hospital visits for Australians, with money committed for reductions to most Pharmaceutical Benefits Scheme medicines.

The PBS covers more than 900 medicines (5000 different brands), and about 80 per cent of these will be cut from $31.50 to $25.

This is an extension of a previous policy which saw the cost of medicine fall from $42.50 to $31.50 in January 2023.

Mr Chalmers also confirmed money has been set aside to make it cheaper to visit the doctor, with the government spending $8.5bn so more GP visits will be bulk billed. This election promise, announced prior to Tuesday’s budget was matched by the Coalition.

“Because of this investment, nine out of 10 GP visits should be fully bulk billed by the end of the decade,” Mr Chalmers said.

“More bulk billing will mean less pressure on families.”

The government said this move makes 18 million more GP visits bulk-billed each year.

Student debt

Australians with student debt will also have more cash in their pockets with money set aside to help pay student loans.

Three million people carrying student debt will see 20 per cent wiped from their loans. A person with the average $27,000 debt will see a $5400 reduction, while 276,000 Aussies with more than $60,000 in student debt would have more than $12,000 wiped off.

“Combined with our existing student debt relief, we will slash $19bn in debt for more than three million Australians,” Mr Chalmers said.

The salary threshold for compulsory payments will also be raised from about $54,000 to $67,000, and rates of repayment will also be lowered for most graduates.

Already law, indexation rates on HELP debts are now calculated at the lower rate of either the Consumer Price Index or the Wage Price Index.

Cheaper childcare

Tuesday’s budget has also included a cost of living measure around childcare subsidies, aimed at making it cheaper to get kids into early education.

Under the new proposal, the Australian government will spend $426.6m for a new guarantee to ensure families are eligible for at least three days a week of subsidised early childhood education and care.

Starting from January 2026, the new plan will be replace the Child Care Subsidy activity test.

Taking on excessive surcharges

In a small win for Aussie consumers, the government is preparing to ban unfair and excessive card charges.

“The government is prepared to ban debit card surcharges, subject to further work by the RBA and safeguards to ensure both small businesses and consumers can benefit from lower cost payments,” Treasury papers state.

Buying a pint

Pub goers and owners will also benefit from the alcohol excise on kegged draught beers has been frozen for two years.

From August 2025, the biannual alcohol excise, which is charged to brewers and distillers will be paused on draught beer, beer served from a keg or cask, meaning it only has the potential to bring down the cost of a schooner or pint poured in a pub, bar or restaurant, with distillers and brewers who want to sell bottled or tinned beer missing out.

The excise was increased for the 84th time on February 4 this year, where it was hiked by a factor of 1.004.

While the excise on beer depends on the alcohol concentration and the volume of the finished product, the excise on spirits increased from $103.89 per pure litre of alcohol to $104.31.