Billions in cost-of-living relief: What to expect in the 2025 budget

As the cost of living continues to be a pressing concern for many Australians, Treasurer Jim Chalmers’ fourth Federal Budget, unveiled tonight in Canberra, could bring a wave of relief with promises of ‘meaningful’ yet responsible measures to ease the financial strain on households.

With inflation and interest rates squeezing household budgets, the government hopes these measures will provide much-needed financial support. But who will benefit the most, and how far will this relief actually go?

The budget is packed with billions of dollars in cost-of-living relief, targeting various aspects of everyday life. From energy rebates to healthcare reforms, the government is extending a helping hand to ensure that Australians can navigate the rising costs without compromising their quality of life. 

Energy

Energy costs are a significant burden for many, and the government is stepping up with a fresh $150 energy rebate starting in July. This relief comes as a continuation of the $300 energy rebate program, which was set to expire on 1 April.

The extension, worth $1.8 billion, will see two more quarterly instalments paid from 1 July, helping households and small businesses manage their energy bills throughout the year.

Healthcare

Healthcare, a critical election battleground, will see a substantial investment with a dual approach: reducing out-of-pocket expenses for GP visits and cutting the cost of medicines. 

An $8.5 billion plan to make nine in ten GP visits free by the end of the decade was announced by the Prime Minister in February. This comprehensive package includes incentives for clinics, training for new GPs, and support for GP trainees.

Additionally, a $690 million plan aims to reduce the maximum cost of prescription medicines on the Pharmaceutical Benefits Scheme (PBS) from $31.60 to $25, potentially saving individuals up to $235 a year.

Education and childcare

Education and childcare are also at the forefront, with the government proposing a $16 billion plan to slash student loan debt by 20 per cent for about three million Australians.

For families, a $427 million investment over five years is set to subsidise three days a week of childcare for those earning a combined income of less than $530,000 annually, with plans to remove the activity test to make childcare more accessible for low-income parents.

Deeming rates

The budget will also address the needs of pensioners, with a freeze on deeming rates for another year, providing relief for 900,000 individuals. 

This measure impacts means testing for Centrelink payments, ensuring that pensions are not unduly cut due to financial assets such as shares, bank account balances, and superannuation.

Housing

Housing affordability is tackled with the expansion of the Help to Buy scheme, which will assist Australians in co-buying a home with the government. The scheme’s income and property price caps will be raised, making it easier for more people to enter the property market.

The scheme will reduce the price of the property by up to 40%. Labor will raise income limits to $100,000 for singles and $160,000 for couples and single parents.

Trade and hospitality

For the trades sector, the Key Apprentice Program is set to receive close to $630 million, offering eligible tradies $10,000 during their training to support their apprenticeships.

In a nod to the hospitality industry, the twice-annual indexation of the alcohol excise for draught beer will be paused until 2027, a move that’s expected to cost taxpayers about $200 million in forgone tax revenue but is hailed as a ‘win for beer drinkers, brewers, and hospitality businesses.’

Despite these generous measures, the budget will be in the red, with a forecasted deficit much smaller than what was inherited from the previous government.

‘Even this year, where we will be printing a deficit for this year, it will be much, much smaller than what we inherited from our political opponents, and that shows the progress we have been able to make,’ said Treasurer Jim Chalmers.

Meanwhile, Angus Taylor, the Opposition’s treasury spokesman, has labelled the government’s budget as a ‘tax grab’ full of wasteful spending.

‘This will be a lost decade for Australian families. So the first test for this budget is to restore our standard of living quickly and get back on the pathway to prosperity for Australians that we’ve been used to in this country,’ he said.

Stay tuned for the full details of the budget and its implications for you.

Share your thoughts and experiences with the YourLifeChoices community in the comments below—how do you think will the proposed 2025 Federal Budget impact your life?

Also read: Federal budget 2025–26: The takeaways we know so far