This years budget focused on cost of living and although very little to comment in relation to business below is a summary of the proposed measures.

 

Tax Measures:

Individual Tax cuts

Modest tax cuts have been announced for 2027 and 2028 financial years with the tax rates from $18,201 – $45,000 reducing from 16% to 15% from 1 July 2026 and to 14% from 1 July 2027.

The Medicare Levy threshold increased for low income earners from 1 July 2024 meaning they will pay less when they lodge 2025 tax returns.

 

Instant Asset Write off

The $20,000 threshold for immediate write off has not changed for 2025 year but still remains unlegislated.

 

Extra Tax on Super – Div 296

Tax on future earnings on super accounts above $3million stays in the budget.

 

HECS/ HELP debts

$500 million to provide a 20% cut to HEC/HELP debt for students and reduction in repayment amounts from 1 July 2025.

 

Denying deductions for ATO interest charge

This was previously announced by not yet been legislated but proposes to deny a tax deduction for ATO interest incurred after 1 July 2025.

 

 

Cost of Living Measures:

Energy Bill Relief

Households and small business will receive an additional credit of $150 on energy bills in quarterly instalments between 1 July 2025 and 31 December 2025.

 

Help to Buy Program

Aims to reduce the deposit required to buy home by government contributing up to 30% of purchase price for existing home and up to 40% of purchase price for new home (by taking a stake in ownership of the home).

The eligibility income threshold will increase to $100,000 for single and $160,000 for couple.

 

Child Care Subsidies

Three days of subsidised childcare for families with young children from 1 January 2026 (means tested).

 

Other announcements

From 1 July 2026 there will be a ban on non compete clauses for low and middle income employees (up to $175,000) that prevent employees from moving to a competitor and stop businesses from making anticompetitive arrangement that cap workers pay and conditions.

 

Promoting 20 day payment times for certain contractors and subcontractors to ensure small businesses receive timely pay for their work.

 

Increased support for apprentices including extending the Apprenticeship program, increasing living away from home allowance and increasing Disability Australian Apprentice Wage support Subsidy.

 

An extra $1billion to expand compliance for tax avoidance, tax return compliance and 27.4 M to target high risk tax practitioners.

 

 

If you are unsure of how the budget measures may apply to you, please reach out to discuss in more detail with one of the Alto team.

 

Author: Donna Bruce