Following the 2025 Federal Election, Anthony Albanese and Labor have formed a majority government. So what policies have they promised and what does it mean for taxpayers?
- Superannuation: Division 296
Over the election and still now, there has been much discussion on Division 296 and it’s application to super balances over $3 million. While we currently have draft legislation, they are rightly still arguing over the application on unrealised gains and the $3 million threshold.
Initially proposed to apply from 1 July 2025 we will have to await the final legislation to advise appropriately.
As it stands at the moment:
- An additional 15% tax would apply to earnings from super balances exceeding $3 million. So some of your earnings, including unrealised gains for the year, would be taxed at 15% and the remaining at 30%.
- Once final legislation has been enacted, this will provide you with an opportunity to review where you hold your investments and the mix of investments held within those entities.
Read our article on the proposed Division 296 Tax for more information.
- Tax Cuts
With cost-of-living front of mind for many taxpayers the next tax cuts are to commence for the 2027 and 2028 tax years.
- 1 July 2026, the 16% tax on income earned between 18,200 – 45,000 will be reduced to 15%.
- 1 July 2027, the 15% tax on income earned between 18,200 – 45,000 will be reduced to 14%
While this will provide some relief across all taxpayers, it will not address any bracket creep that may occur as salaries rise and people move into higher tax brackets. We will need to keep an eye on future federal budgets for any tax relief that may be provided.
- 20% HELP Loan Debt Reduction
A policy that was no doubt popular among young taxpayers was the promise to reduce Higher Education Loan Program debt.
While we still await legislation for this to occur, it will be based on student debt as at 1 June 2025.
Any voluntary repayments after 1 June 2025 will not impact what reduction you will receive.
This will help with repaying your HELP loan quicker but also assist in home loan negotiations as your overall debt obligations will have decreased.
- Medicare and Bulk Billing
You may recall seeing the Prime Minister and his Medicare Card.
Additional funding into medicare over the next 4 years is looking to increase the number of GP’s bulk billing their services
This will hopefully lead to less out of pocket costs for patients young and old.
Whether it’s protecting retirement savings, minimising tax, or tackling the housing market, staying ahead of policy changes is essential. If you would like to discuss how the election outcome and associated policies could impact your financial strategy and what steps to take in the new financial year, book an appointment with one of our dmca advisers today.