Australia federal budget 2025 live updates: Jim Chalmers warns of global risks in budget speech – latest news
‘Stage-four tax cuts’ revealed in budget
Krishani Dhanji
Folks it’s budget night, and all has now been revealed.
Krishani Dhanji here to take you through the nitty gritty of the budget and bring you all the coverage from here in Parliament House.
The headline figure is what one might call stage-four tax cuts, a tweak to the tax rate for the $18,201 to $45,000 threshold, which will be cut from 16% to 15% from 1 July next year, and cut further to 14% from 1 July 2027.
The government managed to keep that one completely under wraps, and they say the change will mean taxpayers will pay up to $536 less from mid-2027.
How much will it cost? About $17bn to the 2028-2029 financial year.
We’ll be waiting with bated breath to see how the opposition responds to this, having always promised taxes would be lower under the Coalition than Labor.
The rest of the budget measures we pretty much already knew, largely because they were announced for the pre-election campaign rather than for the budget (which was expected to be skipped altogether).
So strap in, there is plenty of news and analysis coming at you, outlining what this budget will mean for you, your friends and family, and the country.
Key events
Chalmers has moved down the corridor to the Sky News studio.
The messaging is about the same so far, it’s about the progress and the plan, he says.
Host Kieran Gilbert asks whether he’s prepared to do more on significant economic reform, and he slips in a cheeky “whether as treasurer or as prime minister”.
Chalmers lets that one go straight to the keeper and says he’s “ambitious” about economic reform.
And it wraps up pretty much there – a short chat.
Sarah Basford Canales
The Albanese government will increase the federal public service by 3,400 roles over the next year, adding to the more than 40,000 roles created since Labor first came to power.
The latest federal budget papers also include another hit to the bottom lines of consultancy and labour hire firms with Labor committing to slash another $719m in external resourcing by 2028-29, totalling $4.7bn since 2022.
Labor has increased its average staffing level by 3,436 jobs for 2025-25, the latest federal budget papers show, with the total number of roles now expected to reach 213,439 jobs.
The 2025-26 federal budget shows a total of 11,800 permanent roles have been created since May 2022 to replace work previously undertaken by consultants and contractors.
The converted jobs make up about 28% of the 41,411 jobs added to the public service since Labor took office.
You can read more here:
Angus Taylor refuses to detail defence spending
Ferguson tries to push Taylor on some other numbers – namely what the Coalition will do with public servant numbers and how much more they’ll spend on defence.
He won’t reveal anything, despite saying on the weekend that more would be announced after the Coalition saw Labor’s budget.
I didn’t say I was going to do it on your program and I will not. I will leave the announcements to the appropriate people at the appropriate time. I will say, though, is that you will see us in the coming weeks focus on economic management, restoring our standard of living.
Angus Taylor refuses to rule out offering tax cuts during election campaign
Angus Taylor has entered the budget chat.
He’s on ABC, saying this is a budget “for the next five weeks, not for the next five years” (a line he also said this morning).
He’s calling the tax cuts a “cruel hoax” and, as we brought you earlier, he’s said the Coalition won’t support the cuts.
But he’s not ruling out other tax changes the Coalition might want to introduce during the election.
To clarify, after a bit of back and forth, Sarah Ferguson asks if the Coalition “will not be offering personal income taxes as part of the election?”
He answers:
That’s not what I said. I said we will not be supporting what Labor has proposed in this budget and that’s what we’re responding to tonight.
ACTU praises ban on non-compete clauses in employment contracts
The Australian Council of Trade Unions (ACTU) have welcomed the budget, saying it’s a positive sign wages will continue to grow, and supports the ban on non-compete clauses in employment contracts.
The union has also welcomed the tax cuts announced tonight, which will cut 2% over the 2026 and 2027 financial years to the tax bracket between $18,201 to $45,000.
The ACTU president, Michele O’Neil, says the changes will particularly benefit women.
Real wages are going up under the Albanese government and this budget shows there is even stronger real wages growth on the way.
Three million workers are now looking forward to more freedom and higher wages because of the ban on non-compete clauses in employment contracts.
Did we get a look in the budget for what more will be announced during the election campaign?
We’ve had a look at the “decisions taken but not yet announced” measure in the budget (which is normally the government’s pre-election war chest), but it’s not huge.
They account for about $1.5bn over the forward estimates, which essentially signals that Labor don’t have another gigantic promise coming for the election campaign.
Chalmers says Labor’s tax cuts ‘responsible’ and Coalition a ‘bin fire of inconsistency’
Chalmers has responded to Angus Taylor’s statement that the Coalition won’t support the tax cuts announced in this budget.
He says “it’s the first we’ve heard of it”, and says the government has been “responsible” in putting these tax cuts together.
Sounds like they are not supporting our tax cuts. That’s what happened the last time we tried to give every taxpayer a tax cut, Peter Dutton said we should call an election.
If he has alternatives, he should come clean. They’ve had three years now and they still haven’t come up or come clean on any cost or credible or coherent policies. Angus Taylor’s colleagues don’t take him seriously. It is an absolute bin fire of inconsistency.
Just a note: the Coalition had opposed Labor’s changes to the stage-three tax cuts but ultimately voted for them through parliament.
Treasurer says government ‘on track’ in terms of reining in NDIS spending
One of the bigger items of the budget is the NDIS, which has been ballooning in cost over the last few years.
The government has been trying to rein it in, and cap its growth to about 8%.
The budget seems to show spending on the scheme is going down and Chalmers says it’s on track to meet that growth target next financial year.
Yeah, we’re on track for that for sure. We are seeing very encouraging progress. The thing we’re encouraged by is we’ve been able to get the cost of the NDIS to a more sustainable growth rate – still growing but more sustainably.
Treasurer Jim Chalmers is back in the press gallery for his round of post-budget interviews.
As is tradition he’s started at the ABC and is spruiking the tax cuts.
Is it fiscally responsible, asks host Sarah Ferguson? Chalmers says yes.
There is an appetite, obviously, and an enthusiasm, often, to provide the tax cuts and we have to provide those we think the budget can afford and we have to do that in the most responsible way and that is what has guided us.
Chalmers says he’s aware of the timing of this budget on the eve of an election campaign.
I’m not oblivious to the fact that this budget, this fourth budget, very rare and cherished opportunity, is being delivered on the eve of an election, and will set up a choice between Labor helping with the cost-of-living… with Dutton whose secret cuts will make Australians worse off.
Nick Evershed
Budget measures paper one of skinniest in 20 years
The 2025 budget has one of the skinniest budget measures paper we’ve seen for at least 20 years.
In the lockup, I counted the pages for each year’s budget paper two – the one which lists all the detailed revenue and spending measures – from 2006-07 to the latest paper, 2025-26.
Here’s how the trend looks:
Two things are clear – budget paper two is getting shorter, and this year’s budget is extra skinny.
Now, a few caveats – this is based on the PDFs as presented on the budget website, the actual, printed budgets may differ, and obviously design decisions like text and image choices can change the length as well. Still, there’s a clear trend here I think.
Small change in Medicare levy in budget
Here’s another budget surprise, a small change to the Medicare levy, increasing the income threshold for singles and families.
The threshold will increase by 4.7%, which means it will now kick in for singles earning $27,222 rather than $26,000.
The family threshold will rise from $43,846 to $45,907 and for single seniors and pensioners it will increase from $41,089 to $43,020.
That will cost the budget $648m over five years from 2024-25.
You can read more about that, and all the cost of living measures – new and those already announced – here:
Dan Jervis-Bardy
Business Council welcomes tax cuts but criticises lack of boost for private sector
The budget reaction is beginning to filter through, starting with the Business Council of Australia (BCA).
The peak business lobby has welcomed the new income tax cuts but says the budget should have done more to boost private-sector growth.
The BCA chief executive, Bran Black, said:
The budget forecasts slightly better days ahead for economic growth with GDP increasing to 2.25% next year, which is welcome, however we have not seen the policies or reform to drive investment and business-led growth now or for the years ahead.
Personal income and company taxes make up around two-thirds of the budget revenue and we welcome more relief to taxpayers, however we need a long-term solution for bracket creep.
Coalition won’t back the tax cuts
Despite the Coalition promising taxes would be lower under their watch, the shadow treasurer, Angus Taylor, has put out a statement saying his party will not support the tax changes announced in the budget.
Taylor has called the announcement an “election bribe”.
The Coalition will not support these tax changes that do nothing to address the collapse in living standards under Labor. Seventy cents a day, in a year’s time, is not going to help address the financial stress Australian families are currently under. This is an election bribe by a weak prime minister.
Taylor’s overall vibe of the budget is – no surprises here – pretty negative.
He’s also attacked the government’s energy policy and says Labor has left Australians worse off. He also argues migration is “still out of control”.
