Federal Budget 2025: A summary for the ECEC sector

On the evening of 25 March 2025, the Hon Dr Jim Chalmers MP has delivered his fourth budget as the Federal Treasurer.

The following summarises the Federal Government's plans for the future that would be of interest to early childhood education and care Approved Providers, educators, teachers, families and services:

1. NEW GOVERNMENT-BUILT OR EXPANDED ECEC SERVICES IN AREAS OF NEED - The Federal Government will put $1 billion over 5 years to establish the Building Early Education Fund to create 160 new or expanded ECEC services (an average of $6.25m per service) in areas of need.
   
   

2. 3-DAY CCS GUARANTEE - Costing $426.6m over 4 years, this will replace the Child Care Subsidy (CCS) Activity Test so that all families (earning up to $533,000) will be eligible for at least 3-days a week of subsidised early childhood education and care to begin in January 2026.
   
   

3. 100,000 FREE TAFE PLACES - Subject to passing of legislation, the Federal Government intends to make 100,000 TAFE places permanently free every year beginning on 1 January 2027.
   
   

4. REDUCING HIGHER EDUCATION LOAN PROGRAM (HELP) DEBT - Subject to the passing of legislation at the earliest 1 July 2025, the Federal Government intends to:

   • reduce all outstanding HELP and other student debts by 20%; and

   • raise the income threshold for compulsory payments from $54,000 to $67,000.
     
     

5. TAX CUT - All Australians' taxable income between $18,201 and $45,000 to have their tax rate reduced by 1%:

   • from 16% to 15% from 1 July 2026 to 30 June 2027 (ie $267.99 if you earn $45,000 or more); and

   • from 15% to 14% from 1 July 2027 onwards (ie an additional $267.99 if you earn $45,000 or more).
     
     

6. ENERGY BILL RELIEF - The Federal Government intends to extend its existing energy bill relief for every household and around one million small businesses via two $75 rebates (ie $150) directly off their electricity bills through to 31 December 2025.
   
   

7. ENERGY EFFICIENCY GRANTS FOR SMALL AND MEDIUM SIZED ENTERPRISES - Grants of up to $25,000 will continue to be available for over 2,400 businesses to fund a range of energy upgrades, including replacing inefficient applicants and improving heating systems.
   
   

8. HOUSING - The Federal Government intends to expand its Help to Buy (shared equity) program by:

   • having the government have 40% share of a new build or 30% of established homes;

   • allowing to purchase with deposits as small as 2%;

   • with NSW homes up to $1.3m in metropolitan areas and $800,000 in regional areas;

   • for individuals with incomes of up to $100,000 or joint applicants with combined incomes of up to $160,000; and

   • shared equity home owners can purchase the government's share over time.

   • NOTE: The Help to Buy program is offered alongside the Family Home Guarantee, the Regional First Home Buyer Guarantee and the First Home Guarantee - broadly for eligible home buyers on low and middle incomes so that they can purchase a home with a minimum deposit of 5% and where the Federal Government guarantees the loan.
     
     

9. HOMES FOR INDIGENOUS AUSTRALIANS - The Federal Government will be increasing the Indigenous Business Australia's Home Loan Capital Fund by $70.9m over 2 years from FY2025/2026 to increase opportunities for First Nations Australians to buy their own home.
   
   

10. BANNING NON-COMPETE CLAUSES - The Federal Government will introduce legislation so that employers cannot include non-compete clauses in employment agreements so that their former employees (on less than $175,000) can find new employment with their competitors' without risk of penalty.
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11. EX-TROPICAL CYCLONE ALFRED - The Federal Government plans to provide one-off business continuity payments of $10,000 to CCS approved services that were closed or partially closed for 8 days or more.
    
    

12. END OF INSTANT ASSET WRITE-OFF - The temporary $20,000 instant asset write-off will end on 30 June 2025. From 1 July 2025 onwards, the maximum amount will revert back to $1,000.

Other measures in the Federal Budget 2025 also include:

• $10.4m over three years to develop an Early Education Service Delivery Price to assist the Federal Government to better understand the cost of delivering services around the country and underpin future reform;

• $1.5m to extend the Let's Count (free) program for early childhood educators and parents to assist the mathematical capabilities of preschool children and transition to school; and

• $700,000 for Little Scientists to assist early childhood with their abilities to introduce STEM concepts to children in fun and engaging ways.

For any further information/clarification, please contact your accountants/financial advisers, or the ACA NSW team via 1300 556 330 or nsw@childcarealliance.org.au who can direct you to accountants and financial advisers that ACA NSW recommends.

PUBLISHED: 25 MARCH 2025