Albanese government introduces income tax cuts starting in 2026 to help with cost-of-living pressures.

The Albanese government's 2025 budget introduces unexpected income tax cuts to ease cost-of-living pressures. Starting in mid-2026, the first income tax rate will drop from 16% to 15%, and to 14% by mid-2027, benefiting the average worker by $286 in 2026-27 and $536 annually from 2027-28 onwards. The budget also includes an extension of energy bill relief and $793 million for women’s health initiatives. Tax cuts will reduce government receipts by $17.1 billion over five years.