The Federal Budget 2025–26 delivered a series of measured updates. For small business owners, the focus is on targeted support, tighter compliance, and upcoming tax changes. Below, we unpack the key announcements and outline what small business owners should keep on their radar.
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💡 Energy Rebates Extended
Small businesses will benefit from a $150 credit on their energy bills – rolled out via quarterly instalments between 1 July and 31 December 2025. This comes on top of the ongoing national cost-of-living measures and builds on previous rebates totalling up to $800 since 2022.
Takeaway: No action needed – the rebate should apply automatically. But make sure your business energy account is up to date with your provider.
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💼 $20,000 Instant Asset Write-Off: Still in Limbo
The government has again included the popular $20,000 instant asset write-off for small businesses (aggregated turnover under $10 million) in the Budget – covering the 2024–25 financial year. However, as in previous years, this measure is not yet law. If Parliament doesn’t pass the legislation before the election, it could lapse.
Takeaway: If you’re planning an asset purchase, get advice before committing – this measure is uncertain.
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🔐 Non-Compete Clauses to Be Scrapped (from 2027)
In a move flagged as a “productivity booster,” the government will ban non-compete clauses for most employees (those earning under the current high-income threshold of $175,000) from 2027.
Takeaway: Review employment contracts now. If you rely on restrictive clauses, consider shifting towards stronger onboarding, culture, and IP protection strategies.
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💸 ATO Compliance: More Eyes on You
The ATO has secured $999 million in additional funding over four years to expand its compliance programs. Expect sharper scrutiny on:
• Work-related deductions
• GST obligations
• The cash economy
• Medium-to-large private groups and wealthy individuals
Takeaway: Ensure your record-keeping is tight. The ATO’s increased firepower means higher audit risk, especially for businesses with complex structures or inconsistent lodgements.
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🧠 Support Beyond the Numbers: Mental Health & Debt Help
Programs such as NewAccess for Small Business Owners and the Small Business Debt Helpline will continue to be funded. This reflects growing recognition of the personal pressure running a business can bring.
Takeaway: These services are confidential and free. Don’t wait until you’re in crisis – use them early if stress is mounting.
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💰 Targeted Grants and Support Packages
Several smaller measures may benefit specific industries and cohorts:
• Energy Efficiency Grants: Up to $25,000 to help SMEs cut power use
• First Nations Businesswomen Program: $3.4m over 3 years for mentoring and coaching
• Buy Australian Campaign: $20m push to support local business products
• Fresh Produce Suppliers: Support for understanding rights under the grocery code
• Franchising Code Enforcement: $7.1m to improve transparency in franchising relationships
Takeaway: While these aren’t game-changers, they are worth exploring if they apply to your sector.
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🏗️ Construction & Trades: Apprentices and Prompt Payments
Construction-focused businesses will see:
• Apprenticeship payments doubled (up to $10,000) for eligible housing apprentices
• Government agencies moving to 20-day payment terms for contractors/subcontractors
Takeaway: These changes could ease hiring and cash flow in the building industry. Engage early to benefit.
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📉 Economic Outlook: Sluggish but Stable
• GDP growth: Forecast at 2.25% (2025–26)
• Inflation: Expected to hold at 2.5%
• Wages: Moderate growth forecast at 3.25%
• Unemployment: Expected to peak at 4.25%
Takeaway: Not much uplift, but no shockwaves either. Plan for steady, cautious growth rather than a boom.
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👨👩👧 Personal & Household Impacts
While this Budget largely targeted voter-friendly cost-of-living measures, a few updates are worth noting – especially for business owners managing both business and household finances.
🧾 Personal Income Tax Cuts (2026 Onward)
A two-stage personal income tax cut has been announced:
• From 1 July 2026, the tax rate for income between $18,201–$45,000 will drop from 16% to 15%.
• From 1 July 2027, it will drop again to 14%.
Estimated savings:
Up to $268 in 2026–27, and up to $536 from 2027–28.
Takeaway: Modest savings – but worth factoring into your long-term planning, especially if you’re drawing a wage from your business.
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🎓 Student Debt Relief (HECS-HELP)
The Government will provide a 20% cut to outstanding student debt for current and past students, and will realign the indexation system from 1 July 2025.
•Applies to HECS-HELP and vocational loans.
•This change will reduce annual repayments for many, particularly younger business owners or staff members.
Takeaway: This may improve cash flow for younger founders and team members – and it’s worth highlighting if you’re hiring early-career talent.
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🧾 What to Do Now
1. Review your business structure and asset plans – particularly in light of the uncertain instant asset write-off and future tax changes.
2. Check employment contracts – and prepare for the non-compete clause ban coming in 2027.
3. Ensure your tax reporting and BAS are in order – or take out insurance against it – with the ATO’s expanded compliance programs, audit risk is increasing.
4. Monitor energy and efficiency grant opportunities – rebates and $25k grants could ease pressure on running costs.
5. Highlight student debt changes to your team – especially useful for younger employees or those considering upskilling.
6. Factor in personal tax cuts from 2026–27 – they’re modest but can support long-term financial planning.
7. Stay informed about industry-specific relief – particularly if you’re in construction, franchising, or the fresh food supply chain.
8. Reach out for support – whether it’s for financial guidance or mental wellbeing, the services are free and confidential.
Need guidance on how the Budget impacts your business? We’re here to help. Book a strategy session with your Advisor today to make sense of what’s ahead and prepare a plan to thrive.
