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1 May

Election 2025:

Federal Election 2025: Policy Update for Business and Individuals

Election Date: Saturday, 3 May 2025

With the Federal Election fast approaching, both major parties have announced a range of policies aimed at easing cost of living pressures, boosting housing access, and supporting small business.

Below is a summary of the key policies already announced and legislated. This update focuses on confirmed positions only, leaving out political commentary or speculation.

Personal Income Tax

The Government has legislated modest tax cuts for low- and middle-income earners. From 1 July 2026, the tax rate on income between $18,201 and $45,000 will reduce from 16% to 15%. This will fall further to 14% in the 2027–28 financial year. The maximum tax saving will be $268 in the first year and $536 in the second year.

In contrast, the Opposition Leader has pledged to repeal these cuts, describing them as “insulting”.

Labor has also announced a new, simplified $1,000 deduction for employees earning labour income. Taxpayers who would typically claim more than this amount can continue to itemise deductions as usual. This shortcut does not apply to those earning only business or investment income.

Meanwhile, the Coalition has proposed a new cost-of-living tax offset of up to $1,200 for those earning under $144,000, with the full amount available for those earning between $48,000 and $104,000.

First home buyers also feature prominently in Coalition plans. If elected, they will introduce a mortgage interest deduction scheme. This will allow eligible first-time buyers to claim interest paid on up to $650,000 of a new home loan, for the first 5 years.

Support for Small Business

Several policy announcements aim to boost small business activity and simplify tax obligations.

Both major parties support extending the $20,000 instant asset write-off. This allows small businesses to immediately deduct the cost of eligible assets, and has now been extended through to 30 June 2026.

The Coalition has also committed to permanently increasing the asset write-off threshold to $30,000.

A new measure from the Coalition proposes allowing newly incorporated businesses to claim a 75% tax offset on their first $100,000 of taxable income, and 50% on the next $100,000, during their first year of operation.

To encourage digital investment, a ‘tech boost’ tax deduction of up to $2,000 has also been proposed. This would apply to technology upgrades worth over $4,000, including digital tools, cybersecurity software, and e-commerce platforms.

In a separate initiative, small businesses would also be able to claim up to $20,000 per year in business-related meals and entertainment expenses—though alcohol is specifically excluded. This measure would apply for two years and would be exempt from fringe benefits tax.

Fuel and Energy Costs

The Coalition has pledged to halve fuel excise for 12 months, starting from the first sitting day of Parliament. This temporary relief is expected to cost around $6 billion.

Labor, on the other hand, has extended the energy rebate program. From 1 July 2025, households and small businesses will automatically receive quarterly bill reductions totalling $150 until the end of the year.

To further reduce energy costs, Labor has committed to offering a 30 per cent discount on installed home battery systems from 1 July 2025, potentially saving households around $4,000.

Housing Access and Superannuation

Helping Australians into their first home remains a strong focus for both parties.

Labor has promised to expand its 5% deposit scheme for first home buyers. Under this plan, eligible buyers will not need to pay Lenders Mortgage Insurance, and the program will no longer have income or place caps. Property price limits will be increased.

The Coalition proposes to uncap the number of places available under the existing Home Guarantee Scheme and raise income thresholds to $175,000 for individuals and $250,000 for couples. Property price caps will also rise to $1.5 million in New South Wales, $950,000 in Victoria, and $1 million in Queensland.

In addition, the Coalition will allow first home buyers to access up to $50,000 of their superannuation savings to use towards a deposit.

Broader Small Business Strategy

Labor has released a draft National Small Business Strategy, focusing on simplifying how businesses interact with government systems and departments.

The Coalition has presented a broader plan to support new and growing businesses. In addition to the tax offset and technology incentives already mentioned, their plan aims to reduce red tape and promote entrepreneurship across the country.

Industry and Green Energy

The Federal Government has committed $2 billion to a Green Aluminium Production Credit. This program will help Australia’s aluminium smelters transition to renewable energy by providing emissions-linked payments for each tonne of green aluminium produced.

The aluminium sector represents around 10% of Australia’s electricity demand, and this policy is designed to support a long-term shift to lower emissions across one of the country’s most energy-intensive industries.

The Coalition has stated that if elected, they will discontinue government subsidies for green hydrogen production.

Next Steps

As more policies are announced, we will continue to keep you updated with policies relevant to business owners, individuals, and households.