Federal budget 2025 as it happened: Coalition opposes Jim Chalmers’ $17 billion in surprise tax cuts as Labor makes pre-election pitch to voters

That’s where we’ll leave our live coverage of the 2025 federal budget. Thanks so much for joining us.

As the live blog wraps up, here’s your guide to all our reporting from lock-up on what’s contained in the budget documents.

• Leading our coverage is chief political correspondent David Crowe’s report on the surprise tax cuts.
• Want the quick version? Here’s a handy five-minute guide prepared by federal politics reporters Natassia Chrysanthos and Mike Foley.
• How will the budget affect you? Natassia and Mike also have you covered with our breakdown of different stakeholders – from students to retirees.
• So, are you a winner or a loser? Find out with political correspondent Paul Sakkal’s guide to who has come out on top in tonight’s budget.
• If it’s analysis you’re looking for, Ross Gittins is here, Peter Hartcher is here, Jacqueline Maley is here and a summary of our expert verdicts on the budget is here.
• For the cold hard numbers, head to the budget explained in seven charts from Matt Wade and Craig Butt.
• You can listen to our budget edition of the Morning Edition podcast here.
• And if you’re more of a visual learner, check out Taylor Dent’s video summary of the winners and losers from the budget below.

Finance Minister Katy Gallagher says inflation is sustainably back into the Reserve Bank’s target band, which is why the budget has included more support for Australians.

Speaking on the ABC, Gallagher said the inflation story was a positive one in the budget.

“[Treasury] are saying that inflation is sustainably back into band ... [energy rebates] are not an ongoing payment, which is why we’ve extended it for six months just to help households through to the end of 2025,” she said.

Treasurer Jim Chalmers and Finance Minister Katy Gallagher arrive to enter the budget lock-up at Parliament House in Canberra on Tuesday.Credit: Alex Ellinghausen

Earlier, Treasurer Jim Chalmers also told the ABC that he thought it was “unlikely” the tax cuts would be inflationary.

“We don’t believe there is [a risk of inflationary effects] for a couple of reasons,” he said.

“The timing, and a participation effect, we are encouraging more people into the workforce which is one of our key objectives, but thirdly we think we have got the magnitude right to provide some top-up tax relief to every Australian taxpayer but in the most responsible way.”

Teal MP Zali Steggall says the Coalition’s response to the budget, which was to oppose the new tax cuts announced by the treasurer tonight, is “a little bit rich” as she argues the move will help people in the cost of living crisis.

Independent MP Zali Steggall.Credit: Alex Ellinghausen

Speaking on Sky alongside fellow crossbenchers Jacqui Lambie, Dai Le and Max Chandler-Mather, Steggall said she looks forward to seeing what the Coalition have to say on Thursday during their budget reply.

“I think it’s a little bit rich their response, and I’ll be curious to see what their response is on Thursday night,” she said.

“Australians are hurting and do want to see bracket creep addressed and I think that’s what those tax cuts do. They’re not going to be significant assistance now for households ... but they are starting to address the bracket creep question.”

Business bosses are furious about a “heavy-handed” budget measure designed to help workers take better-paid jobs or start their own companies.

Under the proposal, businesses will be unable to impose non-compete clauses, which stop or restrict people from moving straight to a competing employer, on workers earning less than $175,000.

The change is subject to legislation and expected to take force in two years.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the change was unnecessary, calling it a “heavy-handed measure”.

“This is something that really will affect particularly a lot of smaller businesses who invest in time to train their staff to pass on their intellectual property,” he said.

“They then face the risk that if those staff move on, they can go to a competitor, and very quickly you’re at a competitive disadvantage, in many cases, if you’re just a small business.”

Research out of the US, where the Federal Trade Commission has moved to ban non-competes entirely, suggests it would improve business start-up rates and would affect several industries including finance, health and beauty.

More than three million Australians are covered by such clauses, including childcare workers, hair stylists and construction employees.

Non-compete clauses have been found to drive down wages by an average of $2700 for workers, according to analysis by research institute e61.

AAP

Read more about the change in our full report here.

Shadow treasurer Angus Taylor says a government stepping in and directly helping Australians is not always the answer.

Speaking on Sky News, Taylor said government spending is not free money and someone has to pay eventually.

Shadow treasurer Angus Taylor speaking to the media ahead of the budget.Credit: Dominic Lorrimer

“The idea that the answer to every Australian’s problem is the government stepping in has never worked before and won’t work,” he said.

“What we need is an economy that works hard for hard-working Australians.”

Taylor said that the economy was broken for middle Australians, who he says can’t afford groceries, insurance or their mortgages.

“Labor’s answer to this is 70 cents a day in a year’s time and meanwhile you’ve got deficits as far as the eye can see,” he said.

“It’s not free money – someone has to pay for all of this.”

Independent politicians are sharing their reactions following the federal budget, with teal MP Allegra Spender lamenting the lack of genuine tax reform and Jacqui Lambie slamming the move as “disgusting”.

Independent MP Allegra Spender.Credit: James Brickwood

Spender, who has led a teal push for significant tax reform, told the ABC the tax cuts announced tonight fell short of changes that were needed.

“I’d love to see broader reform. I know we have an increasing reliance on income taxes and to be fair to the treasurer this does partly address it but nowhere near enough,” she said.

“We have a broader issue this I think really comes out for business where our businesses are struggling to invest, innovate and we really need to be investing in that area too.”

Meanwhile, independent senator Jacqui Lambie slammed the tax cuts, calling them “disgusting” and wasted on people with high incomes.

Independent senator Jacqui Lambie.Credit: Alex Ellinghausen

Speaking to the ABC, Lambie began her rant saying the government’s latest tax cuts were “nothing to brag about”.

“Giving rich people more tax cuts is not a viable option. I don’t know how many times we need to tell them ... this is disgusting, it is lazy and quite frankly I want all those rich people to know you are taking that energy payment, you are a welfare recipient, put that on your resume tonight,” she said.

“Labor is not a friend of small business, I never imagined, they’re not a friend of small business, they are the enemy.”

While conceding that the new tax cuts are “modest”, Treasurer Jim Chalmers insists that they will still make a difference to Australians struggling with the cost of living crisis.

Asked on Sky News if he risks being “mocked” for introducing tax cuts that amount to 70¢ a day, Chalmers insisted that it was more support than the opposition has offered.

“The Coalition is currently proposing less than that, less than that amount of help,” he countered.

Prime Minister Anthony Albanese listening as Treasurer Jim Chalmers delivers the budget speech.Credit: Alex Ellinghausen

“Secondly, what these new tax cuts do in the budget tonight is they top up the tax cuts which are already flowing. So we’ve now given three tax cuts to every Australian taxpayer in combination. It means, on average, about 50 bucks a week.”

Chalmers said that while in isolation the tax cuts were “relatively modest”, it was important to look at the three cuts in combination.

“What this makes really clear is that if Peter Dutton had his way, Australians would be thousands of dollars worse off by now, and they’ll be worse off still if he wins [the election].”

Greens leader Adam Bandt says his party will support the government’s new tax cuts.

Speaking on ABC Insiders about whether the Greens had a problem with the tax cuts helping the wealthy more than those with lower incomes, Bandt said his focus was on how corporations continue to “pay no tax”.

“If the government bowls this up as stand-alone legislation and isn’t up for legislation about bringing it forward then, yes, we’ll support it,” he said.

Bandt accused the government of putting big corporations before the community and said Labor had not taken up a Greens’ offer to “legislate and Dutton-proof measures to be able to see the GP for free and wipe student debt”.

Our political photographer Alex Ellinghausen captured the conclusion of the treasurer’s budget address, as he celebrated with his family, the prime minister and Environment Minister Tanya Plibersek.

Here are some of the best frames from inside parliament.

Albanese and Chalmers shake hands.Credit: Alex Ellinghausen

Chalmers celebrates with his wife Laura and son Leo at the conclusion of the speech.Credit: Alex Ellinghausen

Chalmers embraces Environment Minister Tanya Plibersek.Credit: Alex Ellinghausen

Shadow treasurer Angus Taylor has hinted that 41,000 public servants could be cut if the Coalition forms government.

Continuing to speak on ABC 7.30, Taylor said the budget revealed there have been an additional 41,000 public servants but refused to give details on the plan to cut numbers.

“We are at 41,000 additional public servants ... we have said that we will get back to where we were pre-Labor government when we were last in power and of course that was 41,000 less so that’s what we’re aiming to get back to,” he said.

“We have seen a substantial increase in the numbers tonight and that is adding to the cost that all Australians are having to pay and it is one of the reasons why we have got red ink as far as the eye can see.”

Asked for clarity if he would bring a policy that would result in 41,000 jobs being cut, Taylor refused to answer.

“We will be looking to get back to where we were when we were last in government,” he said.