Learn what the 2025-26 Federal Budget means for small to medium businesses
On Tuesday, 25 March 2025, Treasurer Jim Chalmers has delivered a pre-election budget; his fourth Federal Budget.
Key tax-related measures
The major tax related measures announced in the Budget included:
▪ New tax cuts for every Australian taxpayer from 1 July 2026 – from 1 July 2026 the 16% rate will be reduced to 15%; and from 1 July 2027, the 15% rate will be reduced to 14%;
▪ $20k instant asset write-off for small businesses will revert to $1,000 – for next financial year, however the $20k limit may be extended for a further 12 months depending on the outcome of the Federal Election;
▪ ATO enforcement of taxpayer compliance – increased funding for the Tax Avoidance Taskforce (which focuses on multinationals and other large taxpayers), Shadow Economy Compliance Program (including illicit tobacco and non compliant businesses), the Personal Income Tax Compliance Program and Tax Integrity Program (targeting medium and large businesses and wealthy groups);
▪ Tax Practitioners Board (TPB) – increased funding for more sanction powers to target high-risk tax practitioners;
▪ Managed Investment Trusts (MITs) – start date confirmed for annouced changes;
▪ Foreign Resident CGT; clean building MITs – start dates deferred.
Superannuation
No major new superannuation measures announced.
The only super item of note was some additional funding to extend an ATO Tax Integrity Program which is expected to raise an extra $31m in unpaid superannuation from medium and large businesses over 5 years from 2024-25. Since MYEFO in December 2024, superannuation fund tax receipts have been revised up by $2.4bn in 2025-26 and $9.7bn over the 5 yearsfrom 2024-25 to 2028-29.
The Government also highlighted some improvements to processing times to a range of services as a result of their investment in new staff from November 2023. Including Age Pension claims now being processed 52 days faster and Paid Parental Leave claims taking 3 days to process instead of 31.
▪ Proposed Div 296 regime – uncertainty remains – Proposed Div 296 of the ITAA 1997 is contained in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) 2023 and Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 which are still before the Senate. In a Senate Economics Legislation Committee report, published on 10 May 2024, theCoalition and Greens Senators did not support the Bills in their current form. These Bills will lapse once the Prime Minister calls the Federal election, unless they are passed beforehand when Parliament resumes for the Budget sittings on 25-27 March.
To date, the Australian Labor Party (ALP) has insisted on passing the Div 296 Bills in their current form and rejected concerns about the taxing of unrealised gains and the $3m threshold not being indexed.
▪ Super Guarantee – no change to legislated rate rise to 12% for 2025-26.
What Happens Next?
Remember, these are proposed measures, and they could change as legislation passes through parliament.
You can access the 2025-26 Budget Papers here:
Get in touch if you’d like to find out more about how these measures and changes may impact your business.
Give us a call on 07 5649 7650.
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