The Australian Treasurer, Jim Chalmers, delivered his fourth Federal Budget on Tuesday 25 March.
A few days later, Prime Minister Anthony Albanese confirmed that the next federal election will be held on Saturday 3 May.
Both the Budget and the election could have an impact on your personal finances, so read about some of the key issues and how they could affect you.
US tariffs are casting a shadow over the economy
This election is being held at a time of global economic uncertainty. This has been driven primarily by the imposition of a range of tariffs announced by US President, Donald Trump, on 2 April.
While, at the time of writing, President Trump has announced a 90-day moratorium on these being introduced, the baseline tariff of 10% is still in force. As a result, it will cost more for Australian companies to export their products to the US.
The overall tariff imposed on Australian imports into the US is that baseline 10% figure, which is relatively low compared with tariffs announced on other countries.
However, this needs to be considered alongside the general tariffs on imports such as aluminium and other metals.
According to Reuters, the Treasurer has conceded that tariffs will affect the Australian economy, though they are unlikely to lead to recession.
From a financial planning perspective, the tariffs announcement has clearly affected stock markets, and is likely to have had an impact on the value of your investments, such as your super fund.
For example, the ASX 200 dropped 7.6% in the days after the 2 April announcement, although it has subsequently recovered some of this lost ground.
Source: Google
Other major markets also suffered big falls in the same period, with the Dow Jones index falling 10.8% and the Nasdaq down 13.2%.
Indeed, Fortune confirmed that USD$10 trillion was wiped off the value of global equities in the 10 days after the 2 April announcement.
It’s likely that the ongoing uncertainty will lead to further market fluctuation and reduced business confidence, especially for Australian businesses exporting to the US.
The economic uncertainty is being heightened by the potential of a hung parliament
With the latest opinion polls showing very little gap between the two major parties, a hung parliament and a possible coalition government is becoming increasingly likely.
In the last parliament, the Labor government only enjoyed a very small overall majority of just three seats. With independents polling well, Labor may well remain the largest party but might need to negotiate with the Greens and independents to form a new administration.
This will clearly create an element of uncertainty, both in the immediate post-election period, and over the longer term.
For example, a reliance on minor parties or independents may well delay, or even force the postponement of, big economic changes.
Again, this could affect business confidence, especially given the worldwide economic uncertainty.
A surprise Budget announcement ensured tax will be a big election issue
The big Budget surprise was the Treasurer’s announcement of cuts in 2026 and 2027 to the lowest rate of Income Tax on earnings between $18,201 and $45,000.
The cuts will result in anyone earning above $45,000 benefiting by $268 in 2026/27, rising to $536 in 2027/28.
The Liberal-National Coalition has confirmed that they will not enact these cuts if they form the next government, although they have stressed they are still committed to lowering taxes in the future.
The government confirmed restrictions on the foreign ownership of Australian homes
In his Budget statement, the Treasurer reiterated a previous announcement that the government will ban foreigners – including temporary residents and foreign-owned companies – from buying existing residential property for two years from 1 April 2025.
As ABC News confirmed, this policy was originally proposed by the Coalition in 2023, so it’s unlikely they will reverse it if they form the next government.
There are, however, still some types of property that foreign people can purchase. These include:
- A new or near-new dwelling
- An established dwelling for redevelopment
- An off-the-plan property
- Vacant residential land
Importantly, neither of the major parties has pledged to remove this ability.
Clearly, this new law will have a big effect on your financial plans if you are moving to Australia, or have recently done so. We would recommend you get expert advice regarding your property options as a result of this.
Both major parties are promising a big increase in health spending
In his Budget, the Treasurer confirmed an increase in the Medicare levy low-income threshold of 4.7% from July 2025. This means a family will need to be earning in excess of $45,907 before being liable for Medicare charges.
The equivalent threshold for seniors and pensioners will be increased from $57,198 to $59,886.
He also confirmed that the cost of patient contributions to prescription charges will be reduced from $31.60 to $25 in January 2026. The Coalition has confirmed that they will match this reduction.
According to SBS News, both Labor and the Coalition have multi-billion dollar spending plans when it comes to health policies in the coming years.
Economic uncertainty makes it important to keep control of your finances
Despite their longer-term historical differences, there is relatively little difference now between the two major parties when it comes to their economic policies.
Notwithstanding the effect of tariffs, this would suggest there will be minimal impact on investment markets and the value of your portfolio if the election results in a change of government.
From a financial planning perspective, neither of the two major parties are proposing any high-profile changes to superannuation, which helps to make your long-term retirement planning easier.
As you have read, the uncertainty around tariffs, and how they could affect the world’s economy generally and the economies of Australia’s key trading partners, is very much the overriding issue in this election.
Because of this uncertainty, it’s important to regularly review your finances and long-term plans to ensure you remain on track to meet your financial goals.
Get in touch
If you’re a bdhSterling client, we will obviously consider how the election outcome could affect your financial plans at your next annual review, but if you have any particular concerns in the meantime, please get in touch with us.
Please note
This article is for information only, and all the information is correct as of 25 April 2025
Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances.
All contents are based on our understanding of ATO legislation and the Budget report, which are subject to change. Unless stated otherwise, changes announced in the Budget are only proposals and are subject to legislation.