2025 Australian Federal Budget (Migration, Tax, Welfare & Economy) – MIA Summary

Migration Policies

Permanent Migration Program

• The 2025–26 permanent migration program planning levels have not yet been announced in the budget.

Net Overseas Migration (NOM)

• Net overseas migration (NOM) peaked in 2022–23 and has since been declining due to reduced migrant arrivals.

• This downward trend is expected to continue in 2024–25 before stabilizing in 2025–26.

• The government projects NOM to be 225,000 per year in 2027–28 and 2028–29.

• The decline in migration figures reflects a tightening immigration environment and a higher number of departures among temporary visa holders.

Stricter Immigration Policies

• Long-term net migration target of 335,000 has been postponed to the next fiscal year.

• Visa salary thresholds raised by 4.6% for 482, 186, and 494 visa applicants.

• Employer-sponsored visa changes:

  • 186 visa holders will no longer be required to stay with the same employer for two years before applying for PR.

Resettlement of Non-Citizens

• Additional funding has been allocated to relocate non-citizens released from immigration detention in Nauru.

Tax Cuts & Economic Policy

Personal Income Tax Cuts

• From July 1, 2026:

  • The lowest tax bracket for incomes between $18,201 and $45,000 will be reduced from 16% to 15%, saving up to $268 per year.

• From July 1, 2027:

  • Further reduction to 14%, saving up to $536 per year.

Budget Deficit & Government Spending

• Budget deficit of $27.6 billion, with ongoing deficits projected over the next four years.

• Government debt pressure remains high, despite saving $60 billion in interest payments.

• Primary drivers of increased spending:

  • Healthcare, defense, and aged care.

Cost of Living & Welfare Support

Medicare & Pharmaceutical Benefits Scheme (PBS)

• Increase in Medicare levy exemption thresholds:

  • Individual threshold raised from $26,000 to $27,222.

  • Family threshold increased from $43,846 to $45,907.

• PBS drug price reduction (effective from January 2026):

  • The maximum out-of-pocket cost per prescription will drop from $31.60 to $25.

  • Pensioners will continue to pay a maximum of $7.70 per prescription.

• More medicines covered under PBS, including:

  • Contraceptive medications.

  • IVF treatment drugs.

Cost of Living Relief

• Electricity rebates extended:

  • Households and 1 million small businesses will receive an additional $150 rebate.

  • Households will continue receiving $75 per quarter until the end of 2025.

• Student Loan (HELP/HECS) Relief (effective from June 1, 2025):

  • 20% reduction in outstanding HELP/HECS loans, benefiting around 3 million Australians.

  • Average savings of $5,400 per person.

  • Higher repayment threshold:

    • Graduates earning less than $67,000 will no longer be required to make repayments (previously $54,435).

Childcare Subsidy Reform (Effective January 2025)

• Work hour restrictions removed:

  • Families earning ≤$533,280 can receive at least 3 days of subsidized childcare per week.

• From 2026:

  • 99% of families will qualify for 3 full days of childcare subsidies per week.

  • The government is investing $1 billion in childcare infrastructure expansion.

Housing & First-Home Buyer Benefits

Help to Buy Scheme Expansion

• Higher income & property price thresholds, making more Australians eligible.

• Government contributions for first-home buyers:

  • 40% for new properties.

  • 30% for existing properties.

• New income limits:

  • $100,000 for individuals.

  • $160,000 for couples.

Foreign Investment Restrictions

• From April 1, 2025, foreign investors will be prohibited from purchasing established properties in Australia.

Employment & Workplace Policies

• Ban on non-compete clauses for employees earning ≤$175,000 per year:

  • Workers will have more flexibility to change jobs or start their own businesses.

• Support for remote work:

  • The Prime Minister has backed work-from-home arrangements, potentially saving workers up to $4,976 annually in commuting costs.

Industry & Business Support

• $2 billion Green Aluminium Production Credit:

  • Supports Australian aluminium smelters in transitioning to renewable energy.

• $1 billion Green Iron Investment Fund:

  • Accelerates the development of the green iron industry.

• Whyalla Steelworks Support:

  • The government, in collaboration with the South Australian Government, will provide immediate support for Whyalla Steelworks and local business creditors.

  • Funding will also support the long-term transformation of the steelmaking industry in Whyalla.

• Rex Airlines:

  • The government has become Rex Airlines' largest creditor, raising the possibility of partial or full nationalization.

Healthcare & Aged Care

• PBS Drug Pricing Reform (from 2026):

  • Maximum prescription price reduced from $31.60 to $25.

  • New subsidies for IVF and contraceptives.

• Aged Care Reforms:

  • Superannuation guarantee to increase to 12%.

  • Wages for aged care workers to be increased.

• NDIS (National Disability Insurance Scheme) Reforms:

  • $175 million investment to upgrade the system and reduce fraud.

Defense & Foreign Affairs

• Defense spending boost:

  • Additional $1 billion in military funding.

• Ukraine Aid:

  • $17 million in military and humanitarian assistance.

• Cybersecurity & Intelligence:

  • $44.6 million to enhance national cyber and intelligence capabilities.