While the measures in this year’s federal budget may seem minimal, MLC has broken down the client opportunities for financial advisers to maximise.
Treasurer Jim Chalmers handed down the federal budget for 2025–26 earlier this week on 25 March, ahead of the next federal election.
The budget is built around five main priorities: easing the cost of living, strengthening Medicare, increasing housing supply, investing in education at all levels, and making the economy more productive and resilient.
It includes personal income tax cuts in 2026 and 2027, reduced electricity bills, and lower co-payment for medicines, among other measures aimed at “delivering responsible and meaningful cost-of-living relief for Australian families”.
Breaking this down on a post-budget webinar, MLC’s head of technical services, Jenneke Mills, said the incoming changes may be minimal but encouraged advisers to not dismiss the measures.
“There wasn’t a lot in the budget last night […] at first glance looks like there’s not really all that much in it for us, particularly in relation to super. I think there are some little pieces of gold in there, particularly opportunities to engage with our clients,” she explained.
“It would be really easy to sit back and go, ‘Look, there’s nothing in this budget.’ Certainly, we felt last night like we were all dressed up, ready to go out, and we had nowhere to go, in a sense. But don’t throw the baby out with the bathwater because there are some opportunities here.”
Echoing this, Adviser Ratings also said: “Advisers can’t ignore the 2025/26 federal budget as it presents several elements relevant to financial advisers and their clients.”
Namely, all taxpayers will receive modest tax cuts next year, with the lowest marginal tax rate of 16 per cent – applied to those earning $18,201 and $45,000 – reducing to 15 per cent from 1 July 2026 and 14 per cent from 1 July 2027. Each 1 per cent reduction equates to approximately $268 per annum.
Commenting on this, Mills said: “Big surprise on the tax cuts. Modest tax cuts, but tax cuts nonetheless.”
With all 14 million taxpayers set to benefit from the upcoming tax cuts, MLC encouraged advisers to consider optimising superannuation contributions for clients.
“The opportunities here are certainly helping [clients] to understand the implications of a change in income and planning for what comes next are really critical,” the head of technical services added.
Meanwhile, Adviser Ratings continued: “This creates a strategic consideration for financial advisers with lower-income clients, as by 2027/28, the effective tax rate of this bracket will be lower than the superannuation concessional contribution tax rate for low-income earners.”
Other key measures include eligible Australian households and small businesses receiving an additional energy rebate of $150, and the Albanese government planning to reduce student debts by 20 per cent.
Moreover, more clients will be eligible for the government’s shared equity Help to Buy scheme, with an increase to the income caps and the price caps for properties.
“Many of the measures announced in the 2025 federal budget need to be passed as law to take effect. With the 2025 federal election expected to be called shortly, there are limited days for both houses of Parliament to sit to pass these measures,” MLC stated.
Reacting to the budget, Financial Services Council chief executive, Blake Briggs, congratulated the Treasurer for focusing on cost-of-living challenges facing Australians, and “delivering stability and certainty” for the financial services industry in advance of the federal election.
Meanwhile, FAAA general manager, policy, advocacy and standards, Phil Anderson, said: “There is very little news in this federal budget, and it is light on detail. Notable omissions for our profession include any CSLR or ASIC levy relief and no action on access to the ATO Portal.”
