Federal Budget 2025/26 – What Does it Mean for Businesses?
The FY26 Federal Budget delivers a mix of continuity and change for businesses, with a focus on cost relief, compliance, and workforce flexibility. Here’s what businesses need to know:
Key Tax & Financial Measures
Energy Bill Relief: Small businesses will receive $75 per quarter in rebates until 31 December 2025, easing the burden of rising power costs.
Small Business Asset Write-Offs: The $20,000 instant asset write-off will expire on 30 June 2025, meaning from 1 July 2025, businesses can only immediately deduct asset purchases under $1,000.
Non-Deductibility of ATO Interest Charges: From 1 July 2025, businesses can no longer claim deductions on general interest charges (GIC) and shortfall interest charges (SIC).
Managed Investment Trusts (MITs): Reforms will ensure widely held offshore investors (e.g., pension funds) can still access concessional tax rates, clarifying pooling requirements for investors.
Workforce & Employment Changes
Banning Non-Compete Clauses: From 2027, employees earning under $175,000 per year will no longer be restricted by non-compete clauses, allowing greater job mobility and entrepreneurial freedom. Businesses must adapt retention strategies accordingly.
Superannuation Guarantee Increase: From 1 July 2025, employers must contribute 12% of employees’ ordinary time earnings to superannuation, up from 11.5%.
ATO Scrutiny & Compliance Measures
Tax Avoidance Taskforce Expansion: The government is allocating $717.8 million to extend ATO compliance efforts, focusing on multinationals, large businesses, and high-net-worth individuals.
Foreign Resident CGT Rule Changes Delayed: The planned changes to capital gains tax (CGT) for foreign investors will now take effect no earlier than 1 October 2025, giving investors more time to adjust.
Industry-Specific Support
Manufacturing & Sustainability:
$2 billion allocated for Green Aluminium Production Credits to support smelters switching to renewable energy.
$1 billion for the Green Iron Investment Fund, with $500 million going to transform the Whyalla Steelworks.
Hospitality & Alcohol Tax Relief:
Draught beer excise freeze from August 2025 for two years.
The Wine Equalisation Tax (WET) rebate cap will increase from $350,000 to $400,000 per year from 1 July 2026.
Alcohol manufacturers will see their excise rebate cap rise by $50,000 per year from 1 July 2026.
To read the full report on the Federal Budget, click the button below to access the analysis and insight shared by our colleagues in the Bentleys Network. This collaboration on specialist topics is an example of the benefits we can share with our clients since joining the Bentleys Network in July last year. Read more about our membership of the Bentleys Network here.
