26 March 2025
The 2025 federal budget put the Pharmaceutical Benefits Scheme (PBS) front and centre, with the Treasurer lauding it as a “great Australian institution”.
In this pre-election budget, Labor chose to prioritise affordable healthcare – including the PBS – as central to its cost-of-living relief measures.
It will reduce the maximum price for a PBS script from $31.60 to $25. The cost of PBS scripts for pensioners and concession cardholders has been frozen, meaning they’ll still pay $7.70 a script.
The government also committed to investing $1.8 billion to list more drugs on the PBS.
Treasurer Jim Chalmers used his speech to highlight the fact that thanks to the PBS, the cost of a lymphoma treatment to Australians will be cut by more than $600,000.
This boost to the PBS comes as Trump’s trade war sees Australia’s scheme under fire again from the US pharmaceutical lobby.
A boost for bulk billing
A $7.9 billion investment to increase bulk billing for GP visits was also included with the Treasurer saying this spend is the largest single investment in Medicare since its creation over 40 years ago.
The investment will see bulk billing eligibility expanded to cover all Australians from 1 November 2025. This means an additional 15 million individuals will be eligible for bulk billing when visiting their GP for the most common services.
If Labor wins the election and these measures are fully implemented, nine out of 10 GP visits are expected to be bulk billed by 2030.
This will be achieved by establishing the Bulk Billing Practice Incentive Program to incentivise general practices to become full bulk billing practices. Combined with expanded bulk billing incentives.
There will also be a $644 million spend to establish a further 50 Medicare Urgent Care Clinics across the country, with new clinics in every state and territory. This builds on the success of 87 clinics already providing bulk billed urgent care, taking the total to 137 clinics nationwide.
Women’s health in the spotlight
This budget included a $792.9 million package to deliver health care measures specifically for women.
The package includes Medicare rebates and bulk billing for the insertion and removal of long‑acting reversible contraceptives (like IUDs) and enables these services to be delivered by nurse practitioners. It also includes funding to establish 8 new Centres of Training Excellence, to ensure healthcare professionals are trained, skilled and confident when delivering these services.
Several new oral contraceptive pills will be listed on the PBS, the first in more than 30 years, with the Treasurer saying this will see around 150,000 people able to access cheaper contraceptives.
Alongside those measures there was funding for menopause and endometriosis healthcare, including 11 new endometriosis and pelvic pain clinics in addition to the 22 already established – with these clinics now to be expanded to provide menopause support.
The menopause package includes a new Medicare rebate for menopause health assessments, development of national clinical guidelines for treatment, funding to train health professionals and an awareness campaign.
New menopause hormone therapies will also be listed on the PBS, as will a new endometriosis treatment which, without subsidy, could cost more than $2,700 for one year of treatment.
Cost of living relief
This budget was very much focused on cost-of-living relief.
From 1 July 2026 the 16% tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15% delivering a tax cut for everyone earning over $18,201.
In addition, from 1 July 2027, this tax rate will be further reduced to 14%.
These changes mean a worker on average earnings will have an extra $268 in their pocket in 2026–27 and $536 per year from 2027–28, compared to 2024–25.
Beyond the tax cuts, more relief from cost-of-living pressures was announced in the form of $1.8 billion to extend energy bill relief to the end of the year with every household and small businesses receiving an extra $150 off energy bills in 2025.
For those with student loans, the government announced plans to reduce all outstanding debt balances by 20%. This will remove $16 billion from the student loan accounts of three million Australians. If the legislation to bring this measure in passes, it will also increase the amount that people can earn before they are required to start paying back their loans from $54,435 in 2024–25 to $67,000 in 2025–26.