From surplus to deficit and with no relief on the horizon for small businesses, Treasurer Jim Chalmers delivered his fourth Federal Budget this week.  Here, we summarise the key points of this year’s Budget, which you can read about in more detail in our full Budget report.

The Budget focuses on five main priorities: 

  • Helping with cost-of-living pressures 
  • Strengthening Medicare 
  • Building more homes 
  • Investing in every stage of education 
  • Making our economy more productive and resilient 

The outcome? A forecast $27.6 billion deficit in 2024-25, growing to $42.1 billion in 2025-26. 

A missed opportunity for SMEs 

With an election on the horizon, this Budget delivers a mix of targeted measures across various sectors. However, for small and medium businesses, it represents an opportunity missed. There’s little in the way of meaningful tax reform or support to address the growing pressures facing Australian businesses domestically and globally. 

Key tax measures  

The tax-related measures announced, which we cover in more detail in our full Budget report, include: 

  • Personal income tax cuts: The marginal tax rate for income between $18,201 and $45,000 will be reduced from 16% to 15% from July 2026 and further cut to 14% from July 2027. 
  • Expansion of ATO compliance task forces: Nearly $1 billion in additional funding will strengthen compliance activities, including expansion of the Tax Avoidance Taskforce, Shadow Economy Compliance Program and Personal Income Tax Compliance Program. 
  • Deferred changes to the foreign resident CGT regime: Commencement of previously announced changes to strengthen the foreign resident CGT regime has been deferred from July 2025 to at least October 2025. 

Other notable measures 

Other measures announced in the Federal Budget include: 

  • Energy bill relief extended: The energy bill rebate program will continue until the end of 2025, providing continued relief for households. 
  • Housing initiatives: The Help to Buy home scheme will be expanded, while foreign ownership of established housing will be banned for two years from April 2025. 
  • Education support: Apprenticeship and fee-free TAFE subsidies will be extended, while HELP debts will be reduced by 20% and higher repayment thresholds introduced. 
  • Workplace changes: Non-compete clauses in employment contracts will be banned for those earning up to $175,000, potentially impacting how businesses retain staff. 

What’s not included in the 2025-2026 Federal Budget

It’s worth noting what’s absent from this Budget. There are no new tax measures for small businesses, no superannuation changes and no substantial reforms to address rising business costs or improve competitiveness. 

With an election approaching, this relatively modest Budget appears designed to deliver targeted relief without introducing controversial changes. Disappointment is understandable for businesses hoping for more substantial support. 

Our Federal Budget Tax and Super Report provides more details on the measures announced this year. 

If you have questions about how the Budget might affect you or your business, please don’t hesitate to contact our team. We’re here to help you navigate these changes and plan accordingly. 

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This article was written by Tax and Business Services Director Kylie McEwan.  

Disclaimer: The information provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.