Budget 2025: Tariffs on Russia Extended, $17 Million for Ukraine

Defence spending continues to be a hot topic issue as the government tries to balance the books.

Australian Prime Minister Anthony Albanese (l) and Ukrainian President Volodymyr Zelenskyy speak to the media during a press conference at the Presidential Palace in Kyiv, Ukraine, Sunday, July 3, 2022. Mr Albanese made a 12 hours long visit to Kyiv meeting with Ukrainian President Volodymyr Zelenskyy. AAP Image/Lukas Coch

The Labor government’s recent budget reveals it will continue tariffs against Russia and Belarus, while provide $17 million in funding to Ukraine.

“The government will extend by a further two years, to 24 October 2027, a measure imposing additional tariffs on goods that are the produce or manufacture of Russia or Belarus,” Budget Paper No. 2 (pdf) states.

“The measure continues to deny Russia and Belarus access to the most favoured nation status through the application of an additional 35 percent tariff on goods that are the produce or manufacture of Russia or Belarus and had not left for direct shipment to Australia from a place of manufacture or warehouse before 25 April 2022.”

The government said this action would result in a negligible increase in receipts over five years from 2024 to 2025.

Australian Treasurer Jim Chalmers delivered his government’s 2025-26 budget on March 25, as the Labor Party gears up for an election in less than two months.

Funding for Equipment

The $17 million for the Ukraine government will cover military equipment over the next two years.

“The government will provide $17.0 million over two years from 2024–25 to continue to support the Government of Ukraine, including through the provision of communication systems, artillery components, firearms and other equipment,” the budget papers state.

Overall, the Labor government has provided $1.5 billion support to Ukraine so far following the Russian invasion in February 2022.

The Situation With Defence Spending

Meanwhile, Labor said defence spending would exceed 2.3 percent of gross domestic product (GDP) by the early 2030s with an additional $50.3 billion over the next decade.

However, this may fall short of the 3 percent suggested by the U.S. Trump administration’s Elbridge Colby, the nominee for undersecretary for defense for policy.

Further, the Australian opposition has not outlined what it would do if it wins election.

“I’m not going to preempt announcements that are going to be made over the coming weeks, including in the budget reply,” said Shadow Treasurer Angus Taylor when asked the question on March 25.

Defence Commitments Come as Debt Issue Deepens

These commitments come as the government continues to wrangle with ongoing deficits in the budget.

Budget Paper No. 1 confirmed a $27.6 billion deficit in the 2024-25 financial year (pdf).

In this photo illustration, Australian $50, $20, $10 and $5 banknotes and dollar coins are shown arranged for a photograph in Newcastle, Australia on March 25, 2025. Roni Bintang/Getty Images

This deficit represents 1 percent of gross domestic product and means the government spent more money than it received from taxes and other income sources. This is in contrast to the $15.8 billion surplus Labor achieved in 2023-24, which was driven largely by high global commodity prices.

The current deficit is predicted to grow even higher to $42.1 billion, or 1.5 percent of gross domestic product, in the 2025-26 financial year.

Further, the Labor government’s tenure has seen gross debt reach $940 billion, or 33.7 percent of GDP in the 2024-25 financial year, up from $906.9 billion in the previous financial year.

Gross debt is predicted to grow to more than a trillion in the 2025-26 financial year, representing 35.5 percent of GDP.

Meanwhile, net debt of $556 billion in 2024-25, representing 19.9 percent of GDP and up from the $491.5 billion net debt in the 2023-2024 financial year.

Opposition Responds

Shadow Treasurer Angus Taylor said Labor had delivered a budget for the next five weeks, not the next five years.

“This is a budget for an election, not one for our country’s future prosperity,” he said in a statement sent to the Epoch Times.

“At a time when living standards have suffered the biggest collapse on record and when the security environment is the most dangerous since the Second World War, Labor’s Budget has failed to deal with the economic and national security challenges our country faces." 

Taylor noted there were 41,000 new public servants under Labor in Canberra, at a time when services had not improved.