On 26 March, the Albanese Labor Government handed down its 2025–26 Federal Budget. From a small business perspective, the Budget offered limited new support, with the primary benefit being an extension of existing energy relief measures. However, several small business-focused policy announcements were subsequently included in the Coalition’s Budget Reply, delivered by Opposition Leader Peter Dutton on 27 March.
With a federal election now confirmed for 3 May 2025, both the Government’s Budget and the Opposition’s response provide insight into each party’s fiscal priorities and policy direction for the year ahead.
How Does the Coalition’s Budget Reply Compare?
Outlined below are several proposals from the Coalition’s Budget Reply that may be relevant to small business operators:
- Instant Asset Write-Off: The Coalition has proposed increasing the instant asset write-off threshold from $1,000 to $30,000 and making the measure permanent. This would enable eligible small businesses to immediately deduct the full cost of qualifying assets, thereby reducing taxable income in the year of purchase.
- Business Meal Expense Deduction: A proposed deduction of up to $20,000 per annum for business-related meal expenses is aimed at supporting the hospitality sector and incentivising client engagement and staff functions. While intended to stimulate economic activity, the measure has attracted some criticism as potentially benefiting higher-income earners disproportionately.
- Apprentice and Trainee Incentives: The Coalition plans to reintroduce incentive payments for the employment and training of apprentices. Small and medium-sized enterprises would be eligible to receive up to $12,000 per new apprentice or trainee in priority skill areas, particularly within the construction industry.
- Reduction of Regulatory Burden: A commitment has been made to streamline regulatory requirements by removing duplicated obligations across local, state and federal jurisdictions. This initiative is designed to ease compliance costs and administrative load for small businesses.
- Energy Costs: The Coalition has proposed the introduction of a national gas plan, intended to reduce wholesale gas prices. Lower energy costs may translate into operational savings for energy-intensive businesses. In addition, the Coalition reaffirmed its support for nuclear energy, positioning it as a more cost-effective long-term solution relative to renewables.
- Fuel Excise Reduction: A temporary 50% reduction in the fuel excise for a 12-month period has also been proposed. This measure would provide cost relief for businesses with significant transport and logistics requirements.
With the election outcome too close to call, businesses should begin considering the potential implications of both parties’ fiscal policies. If you have any questions regarding how the proposed measures could affect your operations, we invite you to get in touch with our team.
We can provide tailored guidance on how to prepare for the short- to medium-term impacts under either scenario.
