The Australian Government has released the 2025-26 Federal Budget, setting out fiscal measures that include tax adjustments, continued energy rebates, and targeted investments in disaster resilience.
These initiatives are likely to shape key areas of concern for insurers, brokers, and risk managers ahead of the next federal election.
Treasurer Jim Chalmers announced a phased reduction in the lowest income tax bracket, proposing to lower the threshold from 16% to 15% in the 2026 financial year, followed by a drop to 14% in 2027. If passed by Parliament, the revised tax rates are expected to provide individual taxpayers with annual savings of $268 and $538 in successive years.
In addition to income tax changes, the federal government confirmed the continuation of quarterly energy rebates. Eligible households and small businesses will receive $75 per quarter through to the end of 2025. The payments are part of a broader strategy to address cost-of-living pressures and curb inflationary effects.
The budget outlines $1.2 billion in additional funding over the forward estimates for disaster-related payments, including recovery assistance tied to Ex-Tropical Cyclone Alfred. Another $28.8 million is set aside over two years to improve national emergency readiness and hazard mitigation capacity.
Key allocations include $17.7 million in 2025-26 for the Bushfire Community Recovery and Resilience Program, supporting rural and regional preparedness, and $5.4 million to support a national emergency broadband response capability in collaboration with state and territory governments.
In New South Wales, the government has earmarked $580 million for flood-resilient infrastructure upgrades, including projects on Townson Road, Burdekin Road, and Garfield Road West.
“The plan at the core of this budget is about more than putting the worst behind us. It’s about seizing the best of what’s ahead of us. To build a stronger economy – and a future we can all be proud of,” Chalmers said.
The Insurance Council of Australia (ICA) responded to the budget by reiterating calls for greater investment in long-term disaster mitigation.
A centrepiece of its policy recommendations is a proposed $30.15 billion Flood Defence Fund (FDF), which would be jointly funded by state and federal governments over a decade.
According to the ICA, the proposed fund would be allocated across four main areas:
A spokesperson for the ICA said the government’s continued support for existing resilience programs is welcome, but noted the absence of new funding for flood mitigation.
“While immediate relief on cost of living is necessary, this shouldn’t be at the expense of long-term thinking and investment. The insured costs of extreme weather events have reached a record $22.5 billion over the past five years. Driving down this risk through resilience investment will be essential to building a more resilient economy and better protecting Australian homes and businesses,” the spokesperson told Insurance Business.
Meanwhile, the National Insurance Brokers Association (NIBA) has also pressed for expanded resilience efforts. In its February pre-budget submission, the association recommended expanding the Disaster Ready Fund, establishing a national co-funded household resilience scheme, and forming an advisory body to address emerging risks.
NIBA CEO Richard Klipin emphasised that brokers are playing a crucial role in helping clients navigate increasing natural hazard exposures.
“NIBA members are at the forefront of helping Australians manage risk, particularly in the face of increasingly severe natural disasters and emerging risks,” he said. “While insurance provides a vital safety net for Australian communities, it is only one part of the solution.”
