Budget 2025: Treasurer’s $5 tax cut ‘won’t buy a coffee’

Mortgage repayments doubling, soaring power and childcare bills to pay, Sydney’s Tessier family seemingly echoed what most other families thought of Treasurer Jim Chalmers’ $5 a week tax ‘relief’: ‘It’s not enough for even a coffee’.

Treasurer Jim Chalmers fired the starting gun on an election with a pitifully small tax cut and deficits as far as the eye can see. We asked Sydney families how the Budget affects them.

IT’S A DROP IN THE OCEAN

This busy Sydney family of five have had their mortgage repayments double in the last year, their electricity bills climb and childcare fees soar – and they say a $5 dollar tax cut is just a “drop in the ocean”.

Despite two measly tax cuts announced by Treasurer Jim Chalmers in Tuesday’s budget, which will start at only $5 a week, Denya and Jérémie Tessier, of Forestville, believe cost of living pressures have outpaced government support recently.

“It does feel like a drop in the ocean – the budget doesn’t really affect our family at all,” Mrs Tessier said.

Denya and Jeremie Tessier with children Charles-Leon 7, Hugo 3.5 and Theodore 8 months at their home in Forestville. Picture: Tom Parrish

“The tax relief, it’s pretty minimial – it’s not really going to make changes for us”.

Ms Tessier, a human resources manager and her husband, Jérémie, a pharmaceutical and medical device executive, are raising three young children - Charles-Léon, 7, Hugo, 3 and Théodore, eight months.

Mrs Tessuer said the $5 tax cut was not enough for “even a coffee”.

She said expensive childcare was one of the biggest issues facing her family.

If Labor retains office, it will do away with an activity test, making it easier for parents to access cheaper childcare.

It will mean some families could recieve at least three days of subsidised early education and care from January 1 - irrespective of whether they are studying or working.

“It’s eye-watering what families pay,” said Mr Tessier.

LEFT IN QUEUE FOR CHECKOUT RELIEF

Lower Blue Mountains parents Catherine and Adam Osbourne spend more than $500 on their weekly grocery shop.

With four mouths to feed, the cost of living has become a major strain on their combined annual income of just above $100,000.

The 42-year-old parents, with four children between the ages of nine and 16 will need to wait to get any relief at the supermarket checkout.

Tuesday’s budget included $2.9m over three years to help educate fresh food producers on how to stand up to the supermarkets to carve out better deals for themselves and shoppers, with food subsidies reserved for 76 remote stores in First Nation’s communities.

Mr Osbourne said it was disappointing there were no food subsidies for the many Sydney families currently living below the poverty line.

The Osborne family pictured in their Hazelbrook home.. L to R, Ivory, Amariah, Adam, Cath, Melody and Xavier. Picture: Sam Ruttyn

“I don’t see anything in the budget that would excite the everyday Australian, there are things they could have done but I don’t think they’ve found the solution to the cost-of-living crisis,” he said.

“There are a lot of disadvantaged families in Western Sydney … if the government can look at us as people and not just numbers (that would make a big difference),” Ms Osbourne said.

“It’s really hard for young families to get by, there are so many different costs outside just the basics … and it’s not just standard groceries, it’s fruit and vegetables, even bread and eggs are so expensive, all the staples have gone up.”

Ms Osbourne said the price of the family food shop had increased by $200 a week over the last five years from $300 to $500.

“I think over the last few years you can see how much the prices have changed, I’ve noticed food prices the most because we have four children to feed,” she said.

Energy costs have also risen to more than $200 per fortnight, creating a heavy strain on their combined annual income of about $100,000.

OUR TRILLION DOLLAR BABY

On the day of Treasurer Jim Chalmers fourth budget, Mila Craig is less than two weeks old.

By the time she is three, our national gross debt will have soared to $1.22 trillion.

Mila may never see that debt paid off in her lifetime.

Treasurer Jim Chalmers talked up the gains the government had made, saying the gross debt will hit $940 billion this financial year, saying it was $177 billion less when they came to power.

For her mother Yvette Craig a lifetime is a long time.

For the 28-year-old, who rents a small apartment in Marrickville, in Sydney’s Inner West with her husband and newborn daughter, rising expenses closer to home are of more pressing concern.

In the market to buy their first home to raise Mila, Ms Craig said even on two full-time incomes of a combined $200,000, the search has been difficult.

Baby Mila Craig. Picture: Sam Ruttyn

Between her income as a kindergarten teacher and her husband’s as a brick layer, they do not earn enough to easily enter Sydney’s expensive housing market but earn too much for many first homebuyer incentives.

“Sometimes when income is above thresholds you can’t participate in that (first homebuyer incentives) and your only option is to pay the full deposit,” she said.

“That’s where we are, on the cusp of things. There’s just one barrier that’s not allowing you to be a part of it.”

“The cost of groceries has gone up so much,” she said.

“The amount you get from Coles and Woolworths you leave with a small bag and spend so much money.

“We used to go shopping as a family and buy a whole trolley and it cost the same amount.”

Ms Craig said while it was just her and her husband, the couple would easily spend between $200-$300 on groceries per week. Now that Mila has joined the family she knows that figure will increase.

POWER RELIEF FAILS TO CUT IT

Small businesses whacked with soaring electricity bills want the Albanese government to deliver on pre-election promises and lower prices this budget.

Cost-of-living pressures have hit small businesses hard across the state, with the increasing price of supplies, wages and bills leaving many in the red.

But Emu Heights butcher, Bill McDeed, 50, said energy prices are the biggest challenge facing his business, the Gourmet Meat Company.

“In the last two years my energy bills have more than doubled, the ongoing costs of electricity in particular is a burden on a business and an inhibitor of opening the doors every week,” Mr McDeed said

Butcher Bill McDeed owner of Gourmet Meat Company in Emu Heights. Picture: Jonathan Ng

“It’s a cost you can’t pass on or plan for, and it’s definitely our biggest (cost) increase.”

Mr McDeed said he now forks out more than $650 a week for electricity to keep his butcher shop running and 280 sqm worth of cool rooms constantly refrigerated. Only two years ago, his weekly electricity bill was about $300.

Additional $150 electricity rebates will hardly make a difference for Mr McDeed, who said the government needed to lower costs across the board.

“Energy prices need to come down...another $150 rebate but doesn’t scratch the surface for us,” he said.

“I think the Albanese government should go back to what they promised and bring prices down which they certainly haven’t done.”

Mr McDeed said the budget should also carve out more support for small businesses struggling with big overheads through consumer incentives.

“(The government) needs to entice consumers to small businesses because the supermarket duopoly has a stranglehold on where consumers shop,” he said.

“Grocers, delicatessens, and butchers have all disappeared (and will continue to) unless there are incentives.”

NURSES CAN’T AFFORD TO LIVE NEAR WORK

Aged care nurses will get a big wage boost courtesy of federal budget coffers, while NSW public nurses and midwives will have to wait to find out what they will get from the state government.

Tuesday’s budget included a $2.6bn pay boost for aged care workers, who work in the federal system.

The cash injection comes as tens of thousands of nurses and midwives employed in the NSW state system are fighting for a 15 per cent rise.

NSW Nurses and Midwives Association Macquarie Hospital branch secretary Sarah Ellyard, 38, said aged care workers deserve the pay rise.

“I think any pay rise for aged care workers is a good thing,” she said.

“However, NSW (nurses and midwives) are still waiting for fair play so I am hopeful that some of the funding to the states will be used to fund fair play.”

Ms Ellyard said she public healthcare workers desperately needed financial relief and pay parity with other states as they battle against stagnated wages, rising bills, mortgage repayments and rental costs.

Registered nurse Sarah Ellyard. Picture: Tim Hunter.

“A lot of nurses and midwives and a lot of my colleagues can’t afford to live close to work, and have to travel a long way, because our wages haven’t kept up with the cost-of-living,” Ms Ellyard said.

“It has become increasingly less affordable to be a nurse in NSW in comparison to other states.

“If the federal government does increase funding for the state health budget significantly that would really help.”

Although Ms Ellyard considers herself “fortunate” to live and rent below-market in Sydney’s Inner West, she said home ownership would remain completely “out of reach” while she continues to work in public health.

“If I wanted to get a mortgage on my current wage it would be a struggle,” she said.

“It would probably take up most of my income and all of my savings … I wouldn’t have any money left over for anything else.”

The decision to pump $662.6 million into scholarships, training places and doctor salary incentives this budget will help struggling workforce numbers, but fail to address the root cause of retention issues.

“Any scholarships and increased training places are welcome,” Ms Ellyard said.

“But to retain nurses in NSW we will need more than this.

EXODUS TIPPED AMID HOUSING WIPEOUT

More than 80,000 people will flee NSW for Queensland and Victoria over the next four years, with the budget papers forecasting a mass exodus from NSW to other states.

In the four years to June 2027, NSW is expected to lose 83,500 people to interstate migration.

The forecasts add weight to warnings from Premier Chis Minns – as recently as Tuesday – that young people are fleeing NSW because they cannot afford a place to live.

Despite losing tens of thousands of people interstate, NSW is expected to continue as Australia’s most populous state.

Some 8.7m residents will call NSW home next year, while the population is expected to grow to almost 9m by 2029.

This will mean NSW will continue to make up almost a third of the national population within the next four years as forecasts predict Australia will have more than 29m residents by 2028-2029.

Peter and Melanie Murray, with their sons Nathan and Noah, 15, and Mackai, 17, at Manly Beach, today. Picture: Justin Lloyd.

Rising fertility rates will also hope to improve population growth with Australian women expected to give birth to 1.54 children in 2028-29, compared to 1.47 children next year. Future forecasts predict the birthrate is on track to reach 1.62 by 2031-32.

The national mortality rate for both males and females, which remains roughly the same as state mortality rates, is also trending upwards after being adjusted to account for the impacts of COVID-19.

A baby boy born in 2028-2029 can expect to live to the age of 82.8, while a baby girl can expect to live until the age of about 86.5, compared to children born next year who will face slightly lower life expectancies of 82.1 and 85.9 respectively.

The mortality rate is then expected to improve at the same average annual rate observed in the last three decades.

The positive will hope to help dismal migration levels as NSW faces a mass exodus, with tens of thousands of residents fleeing across interstate borders in the coming years.

Budget data has revealed more than 24,000 people will leave NSW next year, with a further 20,000 residents to head out the door each year until mid-2029.

‘WE’RE GETTING VERY MINOR RELIEF’

Mum and small business owner Amanda Moore welcomed upgrades to Mona Vale road as a “no-brainer” measure to fix a notorious choke-point.

“That was a long time coming, it should have been done sooner,” she said.

Ms Moore said the upgrades will fix a notorious choke point on the Northern Beaches, but questioned what the government was doing to contain public spending.

Ahead of Tuesday’s budget, Ms Moore said the government should prioritise reducing government spending and bringing down inflation, “so cost of living measures aren’t so severe”.

Amanda, Lucas (3), James (6) and Dad Michael.

“When contractors are expecting to be paid in line with the rate of inflation … and on the other hand our clients are looking for better deals … in the short term there’s definitely a bit of pain there.”

Ms Moore who late last year started Active Collective, a pilates and personal training studio in North Narabeen, will be one of 312,000 eligible small businesses in NSW eligible for another $150 in energy bill relief this year.

Ms Moore and husband Michael Moore, 41, who works in corporate finance, said they were having to scrutinise their spending despite being on high incomes.

“Our mortgage repayments have almost doubled from when we first purchased our house … most of the money we’re bringing in is going straight out the door.”

The budget will give the Moore’s a tax cut of $268 each next financial year, and $536 in 2027-28.

“I think that will provide very minor relief for people who are struggling,” she said.

Originally published as Budget 2025: Treasurer’s $5 tax cut ‘won’t buy a coffee’