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Gen Z? Here’s what you need to know about how the 2025-26 Budget will impact you

Most of us might have been tuning into MAFS last night, but there was another (and dare I say, more important) show going down. That was, none other than the Australian Federal Budget for 2025-26, of course.

And while it might not have been exactly as tear-inducing as it’s reality romance counterpart, it’s safe to say that for the economic nerds like myself out there, it’s equally as dramatic. And for all my Gen Z’s who are still wondering what’s going on, don’t fret, because we’re about to summarise all the key stuff for you.

The bigger picture…

Being an election year this year, budgets are notoriously ‘nice’ to the people. And while the Treasurer will typically deny that, it’s usually to keep the leading party in favour of all who are about to cast their votes. This year’s budget made no real exception to that rule.

What’s also important to know is that the 2025-26 budget anticipates a $42 billion dollar deficit, which makes up about 1.5% of our annual GDP for the year. And while deficits might not in practice be as scary as they sound, it is a substantially higher one than previous years, and many believe is one that this kind of fiscal expansionary stance might not be entirely necessary given the current economic climate.

Tax cuts…

Last night’s budget announced all Australians earning above the minimum tax bracket would be receiving some form of tax cut in the next year. If the Labor party is re-elected, they plan to cut the tax rate for those earning between $18,200-$45,000 from 16 cents a dollar, to 15 cents in 2026. This means that from next July, those earning an average salary of $70,000 a year would save approximately $268 in tax.

Generalised tax cuts often receive mixed reviews. On one hand, the cost of living crisis impacts everyone, and I don’t think anyone sits around saying they wished they were being taxed more. On the other hand, across the board tax cuts that only result in fairly marginal savings per person typically don’t have a far-reaching impact on the individual. Furthermore, the money that would otherwise be accrued by the government is then lost as valuable expenditure on other essential areas. In other words, there’s both positives and negatives to this kind of tax relief, and it just depends on how you look at it.

HECS debt…

I think most university graduates are probably pumping their fists in the air right now, because there were major wins for anyone who is still paying off their HECS debt. Labor has promised that if they are to win the next election, all HECS debts would be slashed by 20% in July prior to their indexation. This is estimated to wipe approximately $16 billion off student loans.

It also means that for those (like myself) who’ve managed to rack up $60k in HECS, that’s a saving of $12,000 in the long run. Sure, it’s still not universal and free tertiary education like some of our parents got in the 70s and 80s, but we’re calling a win, a win.

Tradies and apprentices…

For those who opted for a tradie and apprentice route over university, you guys are also potentially copping some major relief. Eligible apprentices are being offered up to $10,000 if you train up in the housing-construction sector.

This will also have the secondary benefit of bolstering supply of tradies in the housing sector, which is just one of the many reasons why the government has been falling behind on their affordable housing commitments announced in previous years. Will it fix the housing crisis? No. Will it help? Probably a little bit.

Bulk-billing

If you’re like me and wondering where TF all the bulk-billing practices in Sydney have disappeared to over the past few years, trust me, you’re not alone. Accessibility to bulk-billed services has increasingly deteriorated, and this is something that this year’s budget plans to tackle head on.

Last night’s budget announced $8.5 billion in funding to Medicare up until 2030, giving the necessary boost it needs to fund further bulk-billing practices. Health services are at the forefront of this year’s election, so there’s no major surprise that Albo has gone hard in this area.

Oral contraceptive pills

Continuing on the healthcare discussion, the Labor government have been placing increasing emphasis as of late on improving access to female reproductive services. In this year’s budget, $1.8 billion has been allocated to adding further medications onto the Pharmaceutical Benefits Scheme (PBS). For the first time ever, some oral contraceptive pills will be added to the scheme, making them far cheaper than before. Additional funding for endometriosis, menopause, and other female reproductive health concerns will also come in tandem of this.