September Insights: Student Debt Relief, RBA Rate Cuts & What’s Next in the Economy

There’s been plenty to digest since our August update. The Reserve Bank has moved again on interest rates, the Productivity Commission has released some interesting ideas on improving Australia’s economic resilience, and in a win for more than 3 million Australians with student debt – the Government has announced significant relief.

Below we’ve pulled together the key highlights and what they could mean for you. As always, if you’d like to discuss how any of these updates impact your situation, please reach out.

Student Debt Relief – A 20% Cut

In a welcome change for students and graduates, the Government has legislated:

• 20% reduction in student debt balances (effective 1 June 2025, before indexation).

• Automatic adjustment by the ATO – no action is required from borrowers.

• Applies to most student loans, including HELP, VET Student Loans, Australian Apprenticeship Loans, and more.

If you’ve already repaid your debt after June 2025, you may receive a credit back.

Changes to Repayments

From 1 July 2025:

• The repayment threshold lifts to $67,000 (up from $56,156).

• Compulsory repayments will only apply to income above that level.

This gives borrowers more breathing space, though it may mean loans take longer to clear unless voluntary repayments are made.

Building a More Dynamic & Resilient Economy

The Productivity Commission has released its interim report on reforms to boost growth and resilience. Two major focus areas are:

• Corporate tax reform:

  • A 20% tax rate for businesses under $1 billion turnover.

  • A new 5% cashflow tax to encourage investment by allowing full deductions for capital expenditure upfront.

• Cutting red tape:

  • Streamlining approvals (e.g. windfarms can currently take up to 9 years in NSW).

  • Holding regulators accountable for efficiency and supporting innovation.

The report is still open for feedback until 15 September. While changes aren’t imminent, these signals could point to meaningful reforms in the coming years.

Non-Compete Clauses – Consultation Underway

The Government plans to ban non-compete clauses for low- and middle-income employees from 2027, with further consultation underway for higher-income earners. Treasury is seeking input on:

• How the ban should be rolled out.

• Post-employment restraints for high-income employees.

• Clarifying restrictions on part-time and casual staff.

• No-poach and wage-fixing agreements.

For employers, this means existing employment contracts may need to be reviewed over the next few years. For employees, it could mean more flexibility and mobility in the job market.

Superannuation Guarantee – Key Dates & Changes

From 1 July 2025, the Superannuation Guarantee (SG) rate increased to 12%.

Employers:

• SG contributions are due 28 days after the end of each quarter.

• Payments must land in employees’ super funds by the deadline (unless using the ATO Small Business Clearing House).

• Missing deadlines (even by one day) can trigger penalties and loss of tax deductions.

From 1 July 2026, proposed “payday super” rules would require SG to be paid at the same time as wages. Employers using the ATO clearing house should prepare to transition to a commercial provider.

Employees:

• Regularly check your super fund statements to ensure payments are received on time.

• If contributions are missing, speak with your employer first, then escalate to the ATO if unresolved.

RBA Cuts Rates to 3.60% – What It Means for You

On 12 August, the Reserve Bank cut the cash rate to 3.60%, the third cut this year.

Why?

• Inflation has eased into the RBA’s target range.

• Growth remains weak and unemployment is edging up.

What it means:

• Home loans: A $600,000 mortgage could see repayments fall by $89/month ($1,000/year).

• Refinancing: Borrowers refinancing could save even more, potentially taking years off loan terms.

• Property market: May spur buyer demand, with some risk of renewed price growth.

• Markets: The Australian dollar dipped and bank shares felt the squeeze from thinner margins.

For many Australians, this is welcome relief – but it’s also a good time to review loan structures, repayment strategies, and investment plans.

Note: The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone. 

If expert assistance is required, Contact the team @ Clear Accounting Solutions to run you through your options