2025 Federal Budget dropped last night, and let’s be honest - it’s not exactly riveting. When the news outlets have Giant Pandas at the zoo getting $3.8m as a winner out of the budget, you know we’re not in “historic reform” territory.
As has been the case for the last few years we have seen no big measures announced in the budget this year. There is barely anything at all for small businesses, startups or SMSF’s. In good news though there were no additional big red tape measures put in place either.
Alan and Steph got together this morning to chat through the few announcements that actually apply to your business.
TL;DR
Tax cuts ✅
Asset write-off 🤷♀️
More ATO & ASIC activity 🔍
Energy relief 💡
Giant pandas 🐼 ($3.8mill)
the economy
$27.6b budgetary deficit for 2024-25 which will increase to $42b in 2025-26 with forecast deficits for the next decade.
There were 6 focus areas of the budget which haven’t changed much since last year’s budget :
- Cost of living
- Strengthening Medicare
- Housing supply & affordability
- Education from childcare to uni
- Building a stronger economy (hello, buzzwords)
- Broadening opportunity (aka equality & inclusion)
for small business
Small business again didn’t get a mention in this year's budget.
Instant Asset Write Off
Aka the tax planning nightmare. This one is certainly annoying 😤 and has changed 7 times since 2015.
As it stands the legislation to extend this measure for FY25 (yep this year) hasn’t passed Parliament at the moment. If it does any assets you purchase that cost less than $20k can be claimed as a tax deduction upfront. If it doesn’t pass, the threshold is $1k. Meaning at the moment if you have purchased an asset between $1k and $20k we don’t know whether you can claim them in full or not!
Remember this isn’t money in your pocket, it’s a tax deduction so you need to be making profit and paying tax for this to be beneficial. The big news here is this wasn’t even talked about in the budget which means from 1 July 2026 this should go back down to $1k.
Business Compliance Crackdown
The gov is throwing cash at stamping out dodgy behaviour of businesses to level the playing field.
Director ID
Every Director in Australia has to have a Director ID. This was a nightmare and seemingly a waste of time. Another $207mill has been earmarked to build connections between the Director ID and company registers. This in theory would help ensure dodgy directors can't abandon debts while establishing the same entity. It's a shame this wasn't done with the original plan.
Illegal Phoenixing
$3mill to ASIC to crack down on businesses liquidating to dodge debt.
Shadow Economy
$155m to the ATO for data-matching and compliance activities. This is designed to stop under reporting of income and ensuring tax and super is paid on time.
Businesses should expect a lot more activity from the ATO over the next few years. Accurate record keeping, on-time reporting and on-time payment will be super important.
Non-compete clause ban
The gov has now banned non-compete clauses for all employees earning less than $175k per year and are looking to close loopholes on the ‘no-poach’ agreements that block staff being hired by competitors. This one is certainly polarising with the gov painting the picture that it will allow people to move jobs more easily and the business community commenting that it will harm small businesses that train and develop workers in niche fields.
for SMSF
For the 2nd year in a row this section is being left blank!
We still have the looming issues of Div 296 which is a tax on unrealised gains for those with Super balances over $3mill. This legislation is currently before parliament for the 2nd time.
for individuals
Income Tax Cuts
Income Tax Rate Cuts and changes were announced 5 years ago and were to be phased in 3 stages. Last year saw an adjustment to stage 3 cuts which kicked off this year and last night these cuts were extended further.
The big change is from 1 July 2026 the 16% rate will drop to 15% and then on 1st July 2027 will drop to 14%. If you earn more than $45k in a year you will pay $268 less in 2026-2027 and then $536 in 2027-2028.
We’ve summarised the new rates for you :
Year | 2025-26 | 2026-27 | 2027-28 |
Taxable Income | Tax on this Income | ||
0- $18,200 | Nil | Nil | Nil |
$18,201-$45,000 | 16c for each $1 over $18,200 | 15c for each $1 over $18,200 | 14c for each $1 over $18,200 |
$45,001 - $135,000 | $4,288 plus 30c for each $1 over $45,000 | $4,020 plus 30c for each $1 over $45,000 | $3,752 plus 30c for each $1 over $45,000 |
$135,001 - $190,000 | $31,288 plus 37c for each $1 over $135,000 | $31,020 plus 37c for each $1 over $135,000 | $30,752 plus 37c for each $1 over $135,000 |
> $190,000 | $51,638 plus 45c for each $1 over $190,000 | $51,370 plus 45c for each $1 over $190,000 | $51,102 plus 45c for each $1 over $190,000 |
While the headline savings might not feel life-changing, they do add up over time. The tax brackets we have in Australia aren’t indexed, so over time everyone creeps up. The idea of these changes is to help slow the “bracket creep” pain.
HELP Debt (HECS)
The gov wants to wipe 20% off your outstanding HELP debt. This needs to pass parliament 1st. This is potentially a lot of money for people who still have HELP debts. The repayment threshold is also set to increase. You won’t have to start paying HELP debts back until your income is over $67,000 (currently $54,435).
Energy Bill Rebates
Households and small businesses will get 2 x $75 rebates directly off their electricity bills until 31 December 2025, designed to provide cost of living relief
Help to Buy Scheme
This isn’t new but the Help to Buy Scheme for first home buyers has been expanded. Designed to help first home buyers with incomes between $90-$100k for singles and $120-$160k for couples, the gov takes a 30-40% equity position in the property that can be bought out over time. This scheme is limited to 10,000 homes a year over 4 years.
spending in general
The focus this year is still on ‘Future Made in Australia’ which aims to incentivise advanced manufacturing and clean energy projects within Australia. Again we don’t have the finer detail on the spending so stay tuned for more updates to come.
prior announcements
There are a few things worth mentioning as reminders for changes from previous budgets that actually come into effect now.
Payment of Super on Pay day
Due to start 1 July 2026, businesses will be required to pay super for employees on the day you pay payroll. At present you have to pay this quarterly. This will increase compliance and cashflow juggling for all employers.
Super Guarantee Increase
Will increase from 11.5% this year to 12% starting on 1 July 2025. Xero and tools like Employment Hero will update these rates, but it’s important to note if your employment contracts are salary or wages plus super, you as a business owner will be paying an additional 0.5% of your wages bill in super.
what next
To summarise we’ve got :
IAWO still unclear (Instant asset write off)
20% HELP debt cut… but not yet law
Super on payday — coming in hot!
Giant pandas vs small business 🐼 > 💼
“Clean energy” focus with details still to come
As usual anything announced still needs to be legislated, although there really isn’t a lot in here at all from a business perspective. We will keep you updated via Ninja News as more details in the spending announcements come to light.
Any questions you have in relation to the budget feel free to shoot these through to one of the team or post up on our socials. We will keep the answers coming on Facebook, Instagram and in Ninja News.
