Treasurer aims to “rebuild living standards”

Much of the 2025 Federal Budget was already known but Treasurer Jim Chalmers had one surprise up his sleeve – $17 billion in tax cuts. The first round of cuts will kick in on 1 July 2026 and second round on 1 July 2027, saving the average earner $536 each year when fully implemented.

With the next Federal Election due to be called any day, the Treasurer named five priorities for his fourth budget: helping with the cost of living, strengthening Medicare, building more homes, investing in education, and making the economy stronger.

He called it a plan for “a new generation of prosperity in a new world of uncertainty” that would help “finish the fight against inflation”.

The big picture

The Budget deficit has made an unwelcome, but not surprising, return. The Albanese government has been clear that we were headed back into the red and Treasurer Chalmers says the $42.1 billion deficit is less than what was forecast at both the last election and at the mid-year update. Gross debt has been reduced by $177 billion down to $940 billion, saving around $60 billion in interest over the decade.

Nonetheless, Australia is navigating choppy international waters with a “volatile and unpredictable” global economy.

Australia will feel the shockwaves from escalating trade tensions, two major global conflicts – in Ukraine and the Middle East, and slowing growth in China. Treasury predicts the global economy will grow by 3.25 per cent in each of the next three years in the longest stretch of below-average growth since the early 1990s.

However, Australia is in a good position to deal with the difficult conditions, the Treasurer says.

The Australian economy has “turned a corner” and continues to outperform many advanced economies. Inflation has moderated “significantly”, and the labour market has outperformed expectations. Meanwhile growth is predicted to increase from 1.5 per cent to 2.5 per cent by 2026-27.

Addressing the cost of living

With the rising cost of living expected to be central to the upcoming election campaign, the Budget aims to deliver more support to those doing it tough with further tax cuts, changes to Medicare and the Pharmaceutical Benefits Scheme (PBS), cuts to student debt and wage increases for aged care and childcare workers among a number of initiatives

Apart from the new tax cuts due in 2026 and 2027, the government will increase the Medicare levy low-income thresholds from 1 July 2024.

The energy bill relief is also being extended to the end of this year. At a cost of $1.8 billion, every household and around one million small businesses will each receive $150 off their electricity bills in two quarterly payments.

The government claims that energy bill relief has helped to drop electricity prices by 25.2 per cent across 2024.

Students aren’t forgotten in the Budget with a cut of $19 billion in student loan debt, with all outstanding student debts reduced by 20 per cent and a promised change to make the student loan repayment system fairer.

The government is tackling the cost of living where it’s often most obvious – at the cash register. It is providing support for fresh produce suppliers to enforce their rights and will make it easier to open new supermarkets. It’s also planning to focus on “unfair and excessive” card surcharges.

Looking for a clean bill of health

Almost $8 billion will be spent to expand bulk billing, the largest single investment in Medicare since its creation 40 years ago.

Treasurer Chalmers says nine-out-of-10 GP visits should be bulk billed by the end of the decade with an extra 4,800 bulk billing practices.

There’ll also be another 50 Urgent Care Clinics across the country, taking the total to 137, and public hospitals will get a boost of $1.8 billion to help cut waiting lists, reduce waiting times in emergency rooms and manage ambulance ramping.

Cheaper medicines

The cost of medicines is also in the government’s sights. The maximum cost of drugs on the Pharmaceutical Benefits Scheme (PBS) will be lowered for everyone with a Medicare Card and no concession card. From 1 January 2026, the maximum co-payment will be lowered from $31.60 to $25.00 per script and remain at $7.70 for pensioners and concession cardholders. Four out of five PBS medicines will become cheaper for general non‑Safety Net patients, with larger savings for medicines eligible for a 60‑day prescription.

An extra $1.8 billion is also being invested to list new medicines on the PBS.

Increasing the housing stock

The government’s previously announced target of 1.2 million new homes over five years has seen 45,000 homes completed in the first quarter.

The budget sees an extra $54 million to encourage modern construction methods and $120 million to help states and territories remove red tape.

With building set to increase, more apprentices are needed, and the government has announced financial incentives of up to $10,000 to encourage more people to take up apprenticeships in building trades. Some employers may also be eligible for $5,000 incentives for hiring apprentices.

The Help to Buy program that allows homebuyers to get into the market with lower deposits and small mortgages will be expanded with an extra $800 million to lift property price and income caps to make the scheme more accessible.

To help increase housing stock available, foreign buyers will be banned from purchasing existing dwellings for two years from 1 April 2025. Land banking by foreign owners will also be outlawed.

Recovering and rebuilding

The damage from ex-Tropical Cyclone Alfred and subsequent rains in Queensland and northern New South Wales is so extensive that it is expected to wipe a quarter of a percentage point off quarterly growth.

Flooding has damaged infrastructure and disrupted supply chains, agricultural production, construction, retail, and tourism activity.

The government expects costs of at least $13.5 billion in disaster support. As a result, the Budget includes $1.2 billion to be placed in a contingency fund to better respond to future disasters.

Looking ahead

Despite concerning events on the world stage, Australia’s economy is emerging “in better shape than almost any other advanced economy”.

Inflation and unemployment are coming down and wage growth will be stronger. To help underpin continuing economic growth, the Budget adds $22.7 billion to the government’s Future Made in Australia agenda.

It includes extra investment in renewable energies and low emissions technologies and an expansion of the Clean Energy Finance Corporation. The plan also includes more than $15 billion in support for private investment in hydrogen and critical minerals production, clean energy technology manufacturing, green metals, and low carbon liquid fuels.

And, as the trade war kicks off, the Budget allocates $20 million to a Buy Australian campaign.

“The plan at the core of this Budget is about more than putting the worst behind us. It’s about seizing what’s ahead of us,” the Treasurer says.

If you have any questions about the Budget measures announced, please don’t hesitate to contact us.

Information in this article has been sourced from the Budget Speech 2025-26 and Federal Budget Support documents.   It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change.

As investors grapple with uncertainty, keeping a cool head has never been more important.

“Time in the market, not timing the market” is a popular investment philosophy that emphasises the importance of staying invested over the long term rather than trying to predict short-term market movements. While markets can be volatile in the short term, historically, they tend to grow over time.

It’s a strategy that helps you avoid getting caught up in short-term market fluctuations or trying to predict where the market is heading.

With the recent market turbulence, from the global effects of US President Donald Trump’s administration to ongoing conflicts in Ukraine and the Middle East, savvy investors look beyond the immediate chaos to focus on strategies that encourage stability and growth over the long-term.

It’s a hallmark of the approach by the world’s most high-profile investor, Warren Buffet, who argues that short-term volatility is just background noise.

“I know what markets are going to do over a long period of time, they’re going to go up,” says Buffet.

“But in terms of what’s going to happen in a day or a week or a month, or even a year …I’ve never felt it was important,” he says.

Buffet first invested in the sharemarket when he was 11 years old. It was April 1942, just four months after the devastating and deadly attack on Pearl Harbour that caused panic on Wall Street. But he wasn’t fazed by the uncertain times.

Today Buffet is worth an estimated US$147 billion.

Long-term growth in Australia

While growth has been higher in the US, investors in Australian shares over the long-term have also fared well. For example, $10,000 invested 30 years ago in a basket of shares that mirrored the All Ordinaries Index would be worth more than $135,000 today (assuming any dividends were reinvested).^(source)

And it’s not just the All Ords. If that $10,000 investment was instead made in Australian listed property, it would be worth almost $95,000 today or in bonds, it would be worth almost $52,000.

In real estate, the average house price in Australia 30 years ago was under $200,000. Today it is just over $1 milllion.

Meanwhile, cash may well be a safe haven and handy for quick access but it is not going to significantly boost wealth. For example, $10,000 invested in cash 30 years ago would be worth just $34,000 today.^(source)

Diversify to manage risk

Diversifying your investment portfolio helps to manage the risks of market fluctuations. When one investment sector or group of sectors is in the doldrums, other markets might be firing therefore reducing the chance that a downturn in one area will wipe out your entire portfolio.

For example, the Australian listed property sector was the best performer in 2024, adding 24.6% for the year. But just two years earlier, it was the worst performer, losing 12.3%.^(source)

Short-term investments – including government bonds, high interest savings accounts and term deposits – can play an important role in diversifying the risks and gains in an investment portfolio and are great for adding stability and liquidity to a portfolio.

Ongoing investment strategies

Taking a long-term view to accumulating wealth is far from a set-and-forget approach and by staying invested, you give your investments the best chance to grow, avoiding the risks of missing out on key growth periods by trying to time your buy and sell decisions perfectly.

Reviewing your investments regularly helps to keep on top of any emerging economic and political trends that may affect your portfolio. While it’s important to stay informed about market trends, it is equally important not to overreact when there is volatility in the share market.

Emotional investing can lead to poor decisions, so remember the goal is not to avoid market declines but to remain focussed on your overall long-term investment strategy.

Please get in touch with us if you’d like to discuss your investment

From the economy bending policies of Trump 2.0 to the growing strength of the far right in Europe, the new alliance between Russia and the United States, the wars in Ukraine and the Middle East, and the US President’s vow to upturn world trade rules, the markets are certainly navigating tricky times.

In recent months we’ve seen volatility in some areas but cautious optimism in others in a reflection of the hand-in-glove relationship between politics and markets.

Of course, economic policies, laws and regulations– think tax increases or decreases, new business regulations or even referendums – have a big effect on how investors allocate their portfolios and that impacts market performance.

In 2016, when the United Kingdom voted to leave the European Union, the UK pound plunged and more than US$2 trillion was wiped off global equity markets.

In the following four years until Brexit was finally achieved in 2020, the FTSE 100 performed poorly compared to other markets as domestic and international investors looked elsewhere to avoid risk. While it has risen since a massive drop during the coronavirus pandemic, the exodus of companies from the London Stock Exchange continues with almost 90 departures in 2024.

Interest rate movements and any hint of political instability can also bring about a sell off or a rally in prices, with companies holding off on capital investment and causing economic growth to slow.

Global oil prices rose 30% in 2022 when Russia invaded Ukraine causing European stock markets to plunge 4% in a single day. Since then, oil prices have fluctuated and are now back to pre-war levels and gold has reached new heights as investors globally look for a safe haven from high geopolitical risks.

Do elections have an effect?

Elections, which almost always cause market disruptions during the uncertainty of the campaign period and shortly after the vote is known, have featured strongly in the past six months or so.

A review of 75 years of US market data has found that, while there may be outbursts of volatility in the lead up to the vote, there’s minimal impact on financial market performance in the medium to long term. The data shows that market returns are typically more dependent on economic and inflation trends rather than election results.

Nonetheless, the noisy 2024 US Presidential campaign saw some ups and downs in markets during the Democrats’ upheaval and the switch to Kamala Harris as candidate. Donald Trump’s various policy announcements on taxes, immigration, government cost cutting and tariffs both buoyed and dismayed investors.

Analysis by Macquarie University researchers of the three days before and after election day found significant abnormal returns in US equities immediately after the vote.

But the surge was short-lived as investor sentiment fluctuated. Small cap equities with more domestic exposure experienced the highest returns while the energy sector also saw substantial gains, in anticipation of regulatory changes.

While currently the S&P500 and the Nasdaq have both gained overall since the election, there’s been extreme share price volatility.

How Australia has fared

Meanwhile, any impact on markets ahead of Australia’s upcoming federal election  has so far been muted thanks to the volume of world events.

The on-again off-again US tariffs are causing more concern here for both policymakers and investors. Tariffs on our exports could mean higher prices and a drop in demand for our goods and services, leading to economic uncertainty.

In early February, the Australian share market took a dive immediately after President Trump’s announcement of tariffs on Mexico, Canada and China, wiping off around $50 billion from the ASX 200. They recovered slightly only to fall again later as the Reserve Bank cut interest rates. In the US, some tech companies delayed or cancelled their listing plans because of the volatility and uncertainty caused by the announcements.

Amid a turbulent start to 2025, most economists agree the markets are unlikely to hit last year’s 7.49% achieved by the S&P ASX 200.

Reserve Bank of Australia governor Michele Bullock is similarly downbeat on the prospects for the year, saying uncertainty about the global outlook remains “significant”.

Please get in touch if you’re watching world events and wondering about the impact on your portfolio.

Home values rebound at the end of the quarter after cash rate cut

Housing markets look to have moved past the recent short and shallow downturn. While the quarterly figures remained flat, housing values for the month of February saw a rebound as the RBA decreased the cash rate for the first time since November 2020.

CoreLogic’s national Home Value Index posted a broad-based rise of 0.3% in February that saw every capital increase, with the exception of Darwin, which posted a weak decrease of –0.1%.

A rebound where values were the weakest

The largest month-on-month change across the capitals was recorded in Melbourne and Hobart (both up +0.4%) where home values have previously been among the weakest. For Melbourne, the lift breaks a streak of ten consecutive months of falling home values.

Sydney recorded the second strongest increase of 0.3%. Conversely, the mid-sized capitals of Brisbane, Perth and Adelaide are no longer the strongest growth markets.

The expensive end of the market bouncing back

The return to growth across Sydney and Melbourne is being supported by the more expensive end of the market, rebounding quickly after high-value markets recorded the sharpest declines.

The regions recording growth

Regional housing conditions continued to show a stronger growth trend relative to the capital city counterparts, with values across the combined regionals index rising 0.4% over February and 1.0% over the quarter – compared to the capital city values which recorded a 0.3% monthly rise and a -0.4% quarterly fall.

Borrower sentiment leading the uptick

In the March CoreLogic report Tim Lawless said the improved housing conditions have more to do with improved sentiment than any immediate improvement in borrowing capacity.

“Expectations of lower interest rates, which solidified in February, look to be flowing through to improved buyer sentiment.”

Declining supply of listings and new homes being built

Improved market conditions may also be reflecting a slowdown in the amount of ‘for sale’ listings. New listings across the combined capitals were -4.7% lower than a year ago.

Low levels of new housing construction are also anticipated to support housing values, with multi-unit dwelling construction in particular, well below the average.

Expectations of a drawn-out cash rate

The most recent CoreLogic report noted that the rate-cutting cycle is very fresh and is likely to be drawn out. Lower mortgage rates are positive for housing markets, supporting a rise in borrowing capacity and serviceability assessments, but despite the recent rise, the cash rate is anticipated to remain relatively low for the near future which is anticipated to limit growth.

Dwelling values over the quarter

Melbourne

The Victorian capital posted a -1.1%t quarterly move according to CoreLogic figures, taking the city’s median dwelling price to $772,561. Investors should take note that the gross rental yield figure for Melbourne now sits at 3.7%.

Sydney

In the three months to February’s end, Sydney experienced a dwelling value change of -0.9% resulting in a median of $1.186 million. The gross rental yield for the Harbour City is currently the lowest of the capitals at 3.1%.

Brisbane

The Queensland capital has again recorded the second most expensive spot for dwelling values at $894,425, and a quarterly rise of 0.9%. Brisbane has recorded a gross rental yield of 3.7%.

Canberra

The national capital recorded a decline of -0.8% during the quarter with the median now sitting at $846,955. For Canberra, the gross rental yield is 4.1%.

Perth

Continuing its lead as the best-performing capital over the quarter, Perth jumped 3% for the second quarter in a row, taking its medium to $807,933. Perth recorded 4.3% gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today. 

Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (March 2025)

If you have any questions or need any information please give us a call on 039723 0522.

Stay up to date with what’s happened in the Australian economy and markets over the past month.

The RBA dropped the cash rate to 4.10%, the first reduction since November 2020, however the RBA remains cautious regarding further cash rate cuts.

While tension continues between Russia-Ukraine and the Middle East, and a trade war looms due to Trump’s proposed tariffs, the global economic outlook remains unpredictable and markets are volatile.

Click here for our March update video.

Please get in touch on 03 9723 0522 if you’d like assistance with your personal financial situation.

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Email: integrityone@iplan.com.au

Telephone : 03 9723 0522

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Buying a home is one of the most exciting milestones in life, but when you’re a couple working together to save for that all-important deposit, it can really put the relationship under pressure.

It’s rare for couples to see eye to eye on every financial detail. You will most likely have different spending habits, levels of income, and priorities, and that’s perfectly normal. But if you’re not careful, those differences can lead to stress and conflict. And let’s face it—nothing kills romance faster than arguments about money, so here are some things to consider to keep things harmonious.

Getting on the same page

One of the biggest sources of tension when buying a home together is not having clear, mutual goals. So, before diving into the savings process, have an open conversation about why you are doing this and jointly agree on your goals in terms of the property you both envision, your timeframe to buy – and your budget.

Setting goals together ensures you’re both working toward the same dream and provides a powerful incentive to stay on track.

Acknowledge and respect differences in income

Most couples don’t earn the same amount, and this can create a sense of imbalance when saving for a home deposit, especially if one partner is contributing a larger portion of the savings. The key here is to approach it with understanding and respect.

If one of you earns significantly more than the other, have a frank discussion about how to approach saving. While it might feel fair to equally split the deposit, that’s not always realistic and you may wish to consider contributing based on a percentage of your income.

The goal is to make sure that both partners feel they are contributing fairly, even if the contributions aren’t equal in dollar terms. Keep the conversation open and revisit it regularly to ensure both partners are comfortable with the arrangements. Now you can create a budget.

Set a budget that works for both of you

Budgeting is a critical part of the saving process, and while it can be challenging, it doesn’t have to cause tension if you approach it as a team. The first step is to sit down and create a budget that works for both of you.

Understand where your money is currently going. Review your regular expenses (like bills and groceries), and discretionary spending (like entertainment or dining out) and work out how much you can realistically save each month towards your home deposit. If it’s tight, consider cutting back on non-essential spending, but make sure both of you are comfortable with the level of sacrifice required.

Be flexible and ready to adjust

Life doesn’t always go to plan, and sometimes unexpected events or changes in circumstances can impact your ability to save. If something comes up—a job loss, a health issue, or an unexpected bill—don’t panic.

Having an emergency fund or backup plan can also help ease the pressure. Discuss ways to handle any changes. Stay flexible and be willing to adjust your plan as needed.

Celebrate your progress

Saving for a home deposit is a long-term goal, and it’s common to feel as though it’s taking forever. But every little milestone counts, and taking time to celebrate those wins, no matter how small, can help keep momentum going. Whether it’s reaching your first $5,000 in savings or sticking to the budget for a whole month, acknowledging your progress is important.

Celebrating together also reminds you why you’re working so hard in the first place—so you can have a place to call your own. It doesn’t have to be an expensive celebration; a simple picnic in the park or catching a movie can mark the occasion.

Keep communication open

One of the most significant things you can do to avoid conflict is to communicate regularly and openly. It’s easy to build up frustration and talking about issues sooner rather than later can avoid them growing into a source of conflict.

Money is often an emotional subject, so keep the tone of these discussions calm and supportive, remembering you’re both in this together.

At the end of the day, your relationship is the foundation—your home is just the physical space you’ll share. So, keep the laughter, love, and affection flowing as you navigate this journey together.