2025-26 Federal Budget summary: what does the budget mean for young people?

Young people are at the frontline of Australia’s mental-ill health crisis. The prevalence of mental health conditions among young people has increased by 50% over the last decade, and made worse by the impacts of COVID-19 and the rising cost of living.  

Despite this, the Federal Budget does very little to address this, falling below what is needed for whole-of-system reform.  

Budget announcement: The Government will provide additional funding of $46.0 million over four years from 2024–25 to continue digital mental health services. 

What it means for young people:

This is the key investment in mental health from this budget and Mental Health Australia (MHA) believes this measure may restore funding which was discontinued during a recent digital tender decision. This budget announcement includes $14.8 million for free online mental health platforms that don’t require a referral. 

Budget announcement: The Government will provide $407.5 million over four years from 2025–26 to jurisdictions which have signed Better and Fairer Schools Agreement (Full and Fair Funding 2025–2034) Bilateral Agreements. 

The agreement sees the Commonwealth increase its share of the Schooling Resource Standard to 25 per cent by 2034–35, putting schools on a path to full and fair funding. In exchange, jurisdictions will end their use of the 4 per cent provision which allowed them to claim things like capital depreciation. Instead, this funding will go to delivering reforms, including small group tutoring to help students who fall behind catch up, the introduction of Year 1 phonics and early years numeracy checks and more support to attract and retain teachers. 

What it means for young people: 

In a big win for students, the Better and Fairer Schools Agreement aims to provide full funding for public schools across Australia as per the 2011 Gonski Review. Victorian students have long called for full funding within their schools, including in VicSRC’s most recent Congress Report.  

The Queensland government was the last state to sign on to the Agreement, closing the deal on Monday 24th March ahead of the federal budget announcement. All states and territories in Australia will receive an increase in Commonwealth funding for public schools of up to 25%, while State and Territory governments are expected to make up the remaining 75%. 

This funding is a critical step towards ensuring all young people have access to safe and inclusive education, however it offers little immediate support for students. We hope the government ensures any ongoing reform embeds student voice and incorporates support for intersectional experiences of disadvantage in school environments, as well as implementing reviews of funding against outcomes.  

Budget announcement: National Partnership payments for education - In addition to Better and Fairer Schools funding, the Australian Government is providing funding for state education services through National Partnership payments. 

What it means for young people: 

While there were no significant investments in mental health in this budget, the government is continuing to fund the National Student Wellbeing Program, which provides strategies that support the wellbeing of the broader school community, including chaplains and student wellbeing officers. This investment means more students can access support directly in schools.  

Budget announcement:$626.9 million over four years from 2025–26 to reframe the New Energy Apprenticeships Program as the Key Apprenticeship Program and expand it to capture critical residential construction occupations 

What it means for young people: 

Under the proposal, eligible apprentices will be given $10,000 during their training and will also get a final $2,000 upon completion of the program. The investment of $10,000 over the course of an apprenticeship means more support for young people to finish their studies and work placements. Apprentices are often paid the minimum wage while training, but have high costs of travel and equipment as part of their apprenticeship which can be a barrier while bearing cost of living expenses. 

While this funding is welcome, we need more wraparound support for young people during apprenticeships, as we know engagement and support in the workplace increases apprenticeship retention.  

Budget announcement: In 2025–26, the Australian Government will provide funding of $2.7 billion to support state skills and workforce development services, including $2.5 billion through the National Skills Agreement, and $202.3 million through other payments.

What it means for young people: 

More fee-free TAFE courses means more young people supported into further education and training pathways, reducing the barrier of upfront costs and debt when entering study. The government is focusing on priority areas, including care (aged, health, disability), construction, hospitality, tourism, agriculture, technology, digital, and manufacturing/defence.  

However, this funding will not support students on unpaid placements, who often must choose between sacrificing income and completing their mandatory placements within a set time period. Rural and regional young people enrolled in TAFE courses also face a shortage of placement options, with local services not funded or supported to take on students.  

Budget announcement: The Government will ban non-compete clauses that apply to workers earning less than the high-income threshold in the Fair Work Act (currently $175,000). 

What it means for young people: 

A non-compete clause is a clause of a contract, where an employee agrees not to compete with an employer – in a similar industry or area for a period of time – after their job ends. A review found evidence that non-compete clauses are common in Australia, including for vulnerable and lower-paid workers. 

For young people starting out in their careers or looking for wage growth, the ban of non-compete clauses means they’ll have the freedom to choose when they leave a workplace and where they go next, without restrictions from their current employer. It strengthens the rights of young workers to advocate for better pay and working conditions. 

It is essential young people and workers in the industries this will impact are empowered to understand their new rights, and how to make a complaint or seek support if their employer is not upholding the new policy. The policy would come into effect in 2027.  

Budget announcement: The Government will provide $88.3 million over five years from 2024–25 (and $0.9 million per year ongoing) to fund the outcome of the Fair Work Commission’s decision to increase the minimum award wages of registered and enrolled nurses employed in the aged care sector. 

What it means for young people: 

Young people, especially young women, are highly represented in the aged care and early childhood education workforce; an increase in wage will incentivise new workers and have a positive impact on worker retention, recognising the essential service of care employment.  

Budget announcement: The Government will provide $21.4 million over three years from 2025–26 to improve victim and survivor engagement in the justice system and inform a broader response to the Australian Law Reform Commission’s (ALRC) Inquiry into the Justice System’s Response to Sexual Violence. Funding includes: 

What it means for young people: 

The current criminal legal system fails young people in several ways, including failing to recognise that many children and young people who display offending behaviour are victims of crime, neglect and abuse themselves, and failing to consider how this context may impact how these young people respond when treated as suspects and/or offenders.  

This budget announcement to extend three specialist trauma‑informed sexual assault legal services pilots (including one in Victoria), and trial additional non‑legal support services, including “culturally safe justice system navigators and supporting access to restorative justice pathways” will hopefully help young people who come into contact with the criminal legal system to be treated in a more therapeutic and restorative way. This is one positive step towards much larger reforms that are needed in the Youth Justice system. 

Budget announcement: Funding of $364.5 million over five years from 2024–25 (and $150 million per year ongoing) will redesign the Information, Linkages and Capacity Building (ILC) program, providing general support for people with disability and their families, carers and kin. This funding aims to improve consistency, quality and national coverage, as recommended by the NDIS Review.  

What it means for young people: 

The ILC program aims to fund projects to create connections between disabled people and their communities. Projects aim to improve access to community and mainstream services. 

This budget announcement has been cautiously welcomed by Children and Young People with Disability Australia (CYDA) however, it remains unclear whether this investment will be enough to provide long-term support for children and young people with disability who cannot access the NDIS, especially given a lack of clarity around state and territory funding. 

Budget announcement: The government has announced $175.4 million over four years from 2025–26 (and $43.8 million per year ongoing) for the National Disability Insurance Scheme (NDIS), including: 

Other disability budget announcements include:  

What these announcements mean for young people: 

12% of young people aged 18-24 identify as having a disability, yet only 10% of all disabled Victorians qualify for NDIS plans, leaving many without crucial support. 

Through the government's major reforms to the NDIS and cuts of almost $1 billion over the next year, this budget provides little on how young people will be supported. And, there’s no mention of the recent Disability Royal Commission or review of Australia’s ten-year Disability Strategy. 

It’s also disappointing to see nothing in the budget addressing the barriers for people in accessing the Disability Support Pension (DSP).  

See what the disability sector says about the budget: 

This Federal budget has been dubbed a ‘cost of living’ budget, with a number of key funding measures aimed at easing the cost of living crisis. But, disappointingly, there’s been no changes to income support payments, driving young people further into financial stress.   

For the third year in a row, the Economic Advisory Inclusion Committee has found Australia’s rates of JobSeeker and Youth Allowance to be ‘seriously inadequate’ – whether measured against minimum wages, pensions, or income poverty levels. 

Income support should provide people with baseline financial security. But, as long as the government keeps the rate of income support below the poverty line, many young people will continue to face challenges affording housing, food, bills, and transport. Also, without baseline security, many will continue to face challenges accessing meaningful long-term employment.  

YACVic will continue to advocate to #RaiseTheRate of income support payments, so young people can afford the basics. 

Budget Announcement: The government will provide$1.8 billion over two years from 2025-26 to extend the $150 energy bill subsidy for a further six months. This means each household will receive two $75 rebates directly off their electricity bills until 31 December 2025.  

Budget Announcement: Another key announcement is new tax cuts from 1 July 2026. This measure is estimated to decrease receipts by $17.1 billion over five years from 2024-25 to deliver new tax cuts to all taxpayers.  

What this means for young people: 

There’s some measures to reduce the cost of medication and going to the doctor: 

Many of these measures will provide welcome relief for some. But, amidst a cost of living crisis and overwhelming evidence to lift income support, the Federal Government’s decision to prioritise over $17 billion in tax cuts without measures to lift income supports above the poverty line is disappointing.  

Join #RaiseTheRate 

See what ACOSS says about this year's budget.