No
The world we live in is one of global uncertainty and low productivity. Therefore, this is not a budget for these times.
Global uncertainty is better addressed by the Reserve Bank of Australia cutting interest rates as soon as bad outcomes happen. In the meantime, a profligate budget only works against bringing inflation down, forcing monetary policy to keep interest rates higher for longer.
The government is running a deficit despite no slack in the labour market and higher than predicted tax revenues. The Treasurer should be saving now for a rainy day, not running deficits when the unemployment rate is 4.1%.
Running a deficit means higher taxes in the future. The Treasurer is clearly relying on "bracket creep" to fund the various spending initiatives in the budget. This is not just an issue for those in high tax brackets. Middle-class Australians will face the strongest disincentives for additional work if taxes are permanently higher.
The surprisingly "neo-liberal" aspects of the Treasurer's speech around competition such as reducing the use of non-compete clauses is helpful for productivity. But it should be remembered that such gestures actually cost nothing in the budget.
I suspect most Australians will support increased funding for public healthcare provision. However, extending electricity rebates to help the cost of living actually gives the most to Gina Rinehart and others with multiple properties. It would make more sense to directly provide social insurance to those in real need, rather than distort market prices just to make the CPI statistic temporarily look better.
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No
This is not an irresponsible budget, but it fails to fully reckon with the times.
It is a classic pre-election budget, with giveaways for middle Australia including tax cuts, energy bill relief, cheaper GP visits, and cheaper medicines. The budget partially calibrates for the times by delaying the biggest measure – the tax cuts – recognising that giving away too much too soon could risk reigniting inflation.
Carefully staged, broad cost of living measures are appropriate in these times because cost of living pressures have been widely felt in recent years. But this budget misses many opportunities to do it better.
It is particularly disappointing to see another tranche of tax cuts without tax reform. Tax reform remains one of the big thorny issues awaiting whoever wins the 2025 election. Tax cuts can be a way to soften necessary but difficult reforms. The government has just made the task harder by doing the easy bit with no strings attached.
Australia has made substantial progress in the fight against inflation, and the economy has reached a turning point, but globally turbulent times threaten this progress. Most of the risks from heightened global uncertainty are on the downside.
And while the global outlook is almost impossible to predict, Australia’s structural budget problem remains clear: government spending will be higher than revenue for the foreseeable future. Whether this is a budget that buys time for the hard conversations on tax and spending, or simply kicks the can down the road, is still to be seen.
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Yes
On the eve of an election announcement, it would be tempting for the government to sprinkle the budget with election sweeteners. Cash splashes would risk fuelling inflation and widening the deficit.
The budget shows restraint in this regard. Surprise tax cuts for all are timed for 2026, going some way to address bracket creep while avoiding stoking current inflationary concerns.
The budget is largely a stocktake of existing policies, including investments in skills, innovation, health and care services that build the economy's productive capacity. These policies matter now for fortifying the economy against heightened global volatility and trade tensions, reflecting the Treasurer's shifted focus towards economic "resilience".
The budget is alert to the inflationary pressures that still dominate households' financial anxieties and characterise these economic times. With an eye on productivity, it highlights cost of living relief measures that come with an economic dividend, such as the three-day subsidised childcare guarantee.
But what's missing from the economic agenda is the foresight and courage to broaden the tax base and address the structural deficit.
While smaller than initially forecast, the deficit is set to rise from $27.6 billion in 2024–25 to $42.1 billion in 2025–26.
The need for tax reform – to close the widening chasm between revenue and spending obligations – remains an enduring challenge for current and future governments.
It's a budget for these economic times. But it will take boldness to embark on tax reform to make it a budget for the future.
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Yes
While domestic inflation has eased to more reasonable levels and employment remains high, cost-of-living pressures persist.
The 2025–26 Federal Budget strikes a delicate balance by offering cost-of-living relief, including support for energy bills, healthcare, education, and childcare. It also includes a surprise tax cut, reducing the 16% rate on taxable incomes between $18,201 and $45,000 to 15% from July 2026 and to 14% from July 2027.
Additionally, low-income earner thresholds for the Medicare levy will be increased. The budget also commits to investments in housing and infrastructure. However, these measures are unlikely to deter the Reserve Bank from continuing with interest rate cuts.
The budget maintains a deficit, with expenditures outpacing revenue and no clear timeline for a return to surplus. Concerns about fiscal discipline, rising national debt, and the structural deterioration of the budget remain. Yet, now is not the time for drastic cuts. Global economic uncertainty is too high.
United States President Donald Trump’s tariff wars and erratic approach to geopolitical challenges have heightened the risk of a global recession. Higher tariffs raise import prices, fuelling inflation. In response, central banks increase interest rates, which slows economic activity. Additionally, uncertainty about US foreign policy dampens investment and consumer confidence.
As a small, open economy, Australia is particularly vulnerable to global shocks. A sharp reduction in government spending could weaken domestic activity at a time when there is a risk of falling demand for our exports. In this environment, the current fiscal approach, despite lacking ambition, is the prudent choice.
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No
The rising cost of living is one of Australia's biggest economic problems. On the surface, this budget appears to address that problem, and I support the tax and levy cuts plus the funds to build childcare in "childcare deserts" that it includes.
Yet the core causes of the cost-of-living crisis are not addressed, or even queried, in this budget. Handouts to households – such as energy bills, medical bills, house down payments, and debt repayments – do not address Australia's core structural problems of productivity stagnation, inflation, excess deaths, housing stress, rising wealth inequality, corporate tax evasion, or corruption.
The government's proposals, of which many are directly inflationary, are temporarily bandaging economic wounds without asking what inflicted those wounds. What is the end game?
A government that wished to address Australia's woes would first assess where its own actions may be holding back Australian potential. This self-reflection is cheap, and may lead to more deregulation, simplification, and reduction of market interventions and spending – like eliminating wasteful spending on ideology-driven "green" energy subsidies that distort markets.
What real structural improvements to Australia's economy could the government support? Just one example would be to re-organise the health system such that health, not profits, are optimised. For broader change, how about establishing a system of citizen oversight over public expenditure?
View author profileJames Morley receives funding from the Australian Research Council.
Kate Griffiths does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Dr Leonora Risse receives research funding from the Trawalla Foundation and the Women's Leadership Institute Australia. She is a member of the Economic Society of Australia and the Women in Economics Network. She serves as an Expert Panel Member on gender pay equity for the Fair Work Commission.
Flavio Menezes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
Gigi Foster has previously received funding from the Australian Research Council and is a co-founder and co-director of Australians for Science and Freedom. She is a senior scholar at Brownstone Institute.