Australians may be feeling optimistic about an easing of financial pressure on households in 2025 with the fresh news of a 0.25% interest rate cut announced by the Reserve Bank of Australia this month. In addition, the cost of living crisis will be front of mind for all major players in the approaching federal election meaning more relief may be incoming.
It remains to be seen whether the Reserve Bank’s decision is an indication of more interest rates cuts to come and election promises are nothing until they become policy. So, while the financial forecast is unclear, now is the time to take advantage of existing rebates, vouchers and tax cuts to help ease any budgetary burdens.
Many relief options were announced as part of the 2024/2025 Budget. Here is a refresher in case you missed it so you can plan and budget accordingly for 2025.
Tax cuts for all taxpayers
From July 1, 2024, income tax rates and thresholds changed meaning less tax and more take home for every tax payer. Effective this current financial year, the 19 per cent tax rate has been reduced to 16 per cent, the 32.5 per cent tax rate was reduced to 30 per cent, the 37 per cent tax threshold was increased from $120,000 to $135,000 and the 45 per cent tax threshold was increased from $180,000 to $190,000.
The Medicare levy low-income threshold has also increased, meaning more taxpayers will either be exempt from the Medicare Levy or pay a reduced rate.
Energy rebates for every household
The Government is providing $3.5 billion in energy bill relief this financial year with $300 rebates for 10 million households across the country.
Access to cheaper medicine
The maximum cost of PBS prescription has been frozen until January 2026, keeping the maximum price for a PBS script to $31.60 or $7.70 for pensioners or concession card holders.
Support for young families
Since July 1 last year, paid parental leave has been increased by 2 weeks, with another two weeks added to the leave yearly, until the leave amounts to a total of 6 months.
Families receiving Family Tax Benefit can apply for an Active and Creative Kids voucher for each eligible child. The voucher, valued at $50 is available twice a year and can be used for eligible active or creative activities with registered providers such as local team sports or after school art classes. Children must be enrolled in school to be eligible for vouchers and applications for voucher 1 for 2025 are now open.
Toll relief
Eligible NSW motorists have until June 30 this year to claim on money spent on tolls during the 2023/24 financial year, with up to $1,605 reimbursement for sole traders and up to $802 for general public motorists available to claim back.
Housing
The Home Guarantee Scheme eligibility was expanded last July with 50,000 new places available, helping more Australians into their own home. The interest rate cut will be more welcome news for those wanting to enter the housing market.
Support for small businesses
Small businesses may be eligible for an annual rebate of $325 toward their energy bills. Find out if your business is eligible for energy relief. Small businesses can also continue to take advantage of a $20,000 instant asset write off until June 30 this year.
Education
Fee-Free TAFE is a joint initiative of the Australian, state and territory governments providing hundreds of tuition-free courses for in-demand industries such as clean energy; housing and construction; technology; health and support roles; as well as early education. The initiative prioritises First Nations Australians, women aged 25-54, young people aged 17-24, unpaid carers, the unemployed and people with a disability and aims to provide free access to education, training and support in order to secure in demand skills for well paid jobs. Australians will also have access to 8600 free university spots as part of the Government’s commitment to filling labour shortages across the country.
So while rent and petrol are still more expensive than they have ever been, it’s not all bad news. With tax cuts for everyone and a welcome interest rate cut, plus rebates and vouchers available for eligible applicants and opportunities to up-skill for free, 2025 might just leave us all with a few more pennies in our pockets. Welcome news indeed.
Alison Gallagher is a freelance writer, resourcefulness expert and small business owner. She has been featured in various publications including Stellar Magazine, Australian Health and Fitness Magazine, and Cleo Magazine. Alison is particularly passionate about sharing practical tips on how to live simply, sustainably and seasonally.
