Federal Budget 2025-2026: Key Takeaways for Housing, Small Business, and Construction

Treasurer Jim Chalmers delivered his fourth budget speech on Tuesday night, unveiling a plan focused heavily on cost-of-living relief. As expected, the budget reflects tightened spending, and for the first time in several years, the Labor Government has returned to a budget deficit.

Cost of Living and Tax Relief

The centrepiece of this year's budget is cost-of-living support. This includes:

• Income Tax Cuts: From 1 July 2026, the tax rate on income between $18,201 and $45,000 will drop to 15%, and to 14% from 1 July 2027.
• Energy Bill Relief: $1.8 billion over two years (from 2025–26) will fund ongoing rebates of $75 per quarter for eligible households and small businesses, continuing until 31 December 2025.

Housing and Construction Initiatives

Although no major new housing announcements were made in the budget itself, several recent initiatives were reinforced:

Help to Buy Scheme

• $800 million to expand eligibility, with income caps rising to $100,000 for individuals and $160,000 for couples.
• Property price caps will now be linked to average house prices in each state or territory.
• $4.9 million over four years to extend the Regional Home Guarantee and Family Home Guarantee.
• $8.9 million over three years to improve support services for vulnerable Australians facing housing insecurity.

Prefabricated and Modular Housing

• $49.3 million to support state and territory investment in prefab and modular housing.
• $4.7 million for a voluntary national certification scheme to streamline approvals and maintain standards.
• $120 million from the National Productivity Fund to encourage states to cut red tape hindering modern construction methods.

Housing Australia Support

• The Commonwealth’s guarantee of Housing Australia’s liabilities will increase from $10 billion to $26 billion to support projects under the Housing Australia Future Fund and the National Housing Accord Facility.

Building the Construction Workforce

To address skills shortages in construction, the government will:

• Apprentices working in fields related to construction such carpentry, joinery and brickies, will be given $10,000 incentives for completing their training.
• Employers of apprentices in priority occupations such as housing-related fields, may also be eligible for up to $5000 as a “priority hiring incentive”. The current scheme has been extended for an additional six months to December 31, 2025 - This appears to be a positive step, though it’s unclear whether it specifically applies to plumbers.

Infrastructure and Urban Development

• $17.1 billion committed over ten years from 2024–25 for road and rail projects.
  • $15.6 billion for new Infrastructure Investment Program projects.
  • $1.5 billion for existing programs.
  • Queensland projects include $7.2 billion for Bruce Highway upgrades and $200 million for the Rockhampton Ring Road.

Support for Small Businesses

This year’s budget was more reserved when it came to small business support. Several expected measures were either scaled back or missing entirely.

Instant Asset Write-Off

• The popular tax incentive remains in place for now, allowing immediate depreciation of assets up to $20,000.
• However, no extension has been legislated beyond 30 June 2025. Without new laws, the threshold will revert to $1,000 from 1 July 2025.

Energy Relief

• The government will extend energy rebates of $150 to around one million small businesses starting from 1 July 2025. This equates to $75 per quarter, down from last year’s $325.

Fair Competition and Market Regulation

• A ban is proposed on non-compete clauses for workers earning under $175,000 annually to promote entrepreneurship and workforce mobility.
• $800,000 has been allocated to extend protections for small businesses against unfair contract terms and conduct, particularly in franchising.

Phoenixing and Shadow Economy

• $3 million over four years to deter illegal phoenixing, particularly in construction.
• $207 million over two years for ASIC to modernise systems and improve enforcement, including integrating Director Identification Numbers.
• $155.5 million for the ATO to expand its Shadow Economy Compliance Program, targeting worker exploitation and income underreporting.

‘Buy Australian’ and Local Business Support

• $20 million will support the federal government’s Buy Australian Plan, aimed at encouraging consumers to choose locally made products and helping SMEs access government contracts.
• $7.1 million has been allocated to the ACCC to oversee the Franchising Code of Conduct.

Skills and Training

• The fee-free TAFE initiative continues, with at least 100,000 free TAFE places annually from 2027.
• The TAFE Technology Fund will receive ongoing support to upgrade workshops, labs, and digital facilities.

First Nations Business Support

• $3.4 million over three years to support First Nations women in business, with a total of $27.3 million committed to boost entrepreneurship and Indigenous-owned businesses.

View the full budget here.

With the Federal Election announce for Saturday 3 May, MPAQ has also provided a summary of the opposition's budget reply. Click here to view it.