UnitingCare Australia has analysed the 2025/26 Federal Budget, providing a clear insight into the Federal Government’s spending plans and the impact on Australians. This analysis reveals a budget that offers modest relief and targeted interventions across key social domains, but doesn’t adequately address broader structural inequalities.  

Disappointingly, the Government has once again ignored the pleas from the social services sector and recommendations from its own Economic Inclusion Advisory Committee to address the level of Jobseeker and Youth Allowance. Also missing are measures that would assist community service providers meet the ongoing cost pressures of providing services and adequate funding for the transition to the new Aged Care Act. 

The cost-of-living measures outlined in this Budget will provide relief to Australian households. However, they are not enough to ease the financial stress being experienced by many in our society, especially the most vulnerable who are dependent on income support. Further, a number of the announced measures are, in essence, subsidies. As such, they do not deal with the systemic and structural issues driving cost-of-living pressures that continue to cause unnecessary hardship for Australian households

This Budget is the starting line in the race to govern Australia for the next three years. During this election period we will continue to deliver our message to all political candidates: that Australia needs a strong and adequate safety net for those reliant on welfare as well as increased investment for the community services that support them.  

This media release from UnitingCare Australia National Director Claerwen Little provides further commentary on our response. 

Economic Overview of 2025/26 Federal Budget 

The budget forecasts a challenging economic environment with:

• Projected deficit ranging from $36.9 billion to $42.1 billion
• Net debt expected to reach $768.2 billion by 2028/29
• Modest GDP growth projected between 2.25% and 2.75%
• Unemployment rate estimated at 4.25%
• Wage growth anticipated between 3.25% and 3.75%

Despite these projections, the budget has been criticised for lacking substantial structural reforms and providing insufficient welfare support.

Key social sector highlights

Aged care

The aged care sector sees targeted investments, including:

• $88.3 million allocated for wage increases for aged care nurses
• $291.6 million to continue aged care reforms and implement Royal Commission recommendations
• Continued funding for the aged care remote accord project.

Child health, wellbeing & care

A significant focus on early childhood education includes:

• $5 billion investment covering:
  • Wage increases for childcare workers
  • Creation of new childcare places
  • Guaranteed subsidised childcare
• $21.2 million dedicated to combating child sexual abuse.

Disability services

Disability support receives notable attention:

• $175.4 million to enhance NDIS integrity and fraud detection
• $423.8 million supporting disability inclusion and capacity building
• Funding for the National Autism Strategy.

First Peoples initiatives

A substantial $506.4 million investment in Closing the Gap initiatives includes:

• Boosting Indigenous home ownership
• Improving food security
• Expanding mental health services
• Increasing domestic violence support
• Funding for culturally safe aged care assessments.

Health and mental health

Healthcare investments feature:

• $7.9 billion expansion of Medicare bulk billing incentives
• $653.8 million for an additional 50 Medicare Urgent Care Clinics
• Continued digital mental health services funding
• Limited new suicide prevention initiatives.

Housing and homelessness

Housing sector investments remain modest:

• Minor funding for housing research and emergency accommodation
• $0.8 billion additional investment in Help to Buy Program
• Continued lack of significant funding for social or affordable housing.

Cost of living relief

Relief measures include:

• $1.8 billion extension of energy bill rebates
• Increased Medicare levy low-income thresholds
• Personal income tax rate reduction starting July 2026.

Women’s specific measures

Targeted women’s support encompasses:

• $240.4 million to enhance women’s health services
• $54.5 million for frontline workers addressing family and domestic violence
• Investments in victim support, gender equality, and emergency accommodation.

Workforce and employment

Employment initiatives include:

• Extended apprenticeship incentives
• Increased funding for Disability Australian Apprentice Wage Support
• Efforts to boost refugee employment and remote workforce transition.

This analysis is based on UnitingCare Australia’s interpretation of the 2025-26 Federal Budget and provides a comprehensive overview of its social sector implications.