Key takeaways from the 2025 Australian Federal Budget for small to medium businesses:
$999m
ATO funding to strengthen Australia’s tax system
$165m
to support brewers, distillers and wine producers
Energy bill relief for Australian households
The Government will extend the cost of living support measure announced in last year’s budget by a further six months to the end of 2025. Eligible small businesses and Australian households may be entitled to an energy bill rebate of $150 covering the September and December 2025 quarters. In most cases, the rebate will be applied automatically by the electricity provider and no further action is required.
Enhanced funding for ATO compliance programs
The Government has announced that it will provide the ATO with $999m over four years to strengthen the fairness and sustainability of Australia’s tax system.
The funding will go toward extending and expanding existing ATO audit and compliance programs, including the Tax Avoidance Taskforce, which supports the ATO’s scrutiny of tax compliance for large taxpayers, as well as programs that target the shadow economy, prevent and correct non-compliance activities, and ensure the timely payment of tax and superannuation liabilities by medium and large businesses and wealthy groups.
The significant increase in funding for the ATO programs across all taxpayer populations and risk areas will result in increased audit and compliance activity and scrutiny of taxpayer lodgements.
Increased resourcing for ASIC
The Government will provide additional funding of $207.8m over four years from 2025-26 to further assist with the stabilisation and uplift of ASIC’s business registers and the reform of Australia’s financial reporting governance arrangements.
This is expected to support ASIC in building connections between Director Identification Number scheme and company registers, helping to target illegal phoenixing activity.
Funding for regulators to support and protect businesses and franchisees
The Government has announced $12 million in funding to be provided over four years from 2025-26 to enhance regulation and oversight in respect of the franchising code of conduct, improve detection of phoenixing activities, support social enterprises focused on employment for disadvantaged Australians and explore options to extend protections against unfair trading practices to small businesses.
No further extension to the small business $20,000 instant asset write off
Last year’s Federal Budget announced an extension of the $20,000 instant asset write off for small businesses until 30 June 2025. This measure is yet to be legislated.
The Government has not announced a further extension of the instant asset write off in the 2025-26 Budget. Accordingly, even if the measure from last year’s Budget is legislated, the instant asset write off will revert back to its $1,000 limit from 1 July 2025.
Banning of non-complete clauses
The Government has announced the next tranche of its competition reforms will include banning non-compete clauses for workers earning less than the high-income threshold in the Fair Work Act (currently $175,000).
The Government will also close loopholes in competition law that currently allow businesses to cap workers’ pay and conditions, without the knowledge and agreement of affected workers and use ‘no-poach’ agreements to block staff from being hired by competitors.
The Government intends to consult on policy details, including exemptions, penalties, and transition arrangements and will also consider and consult further on non-solicitation clauses for clients and co-workers and non-compete clauses for high-income workers.
Excise changes for alcohol producers
The Government has announced that it will provide $165 million in support for brewers, distillers and wine producers through lower alcohol excise and excise equivalent customs receipts.
The Government will temporarily pause indexation of draught beer excise and excise equivalent customs duty for two years from August 2025, with biannual indexation to recommence from August 2027.
Brewers, distillers and wine producers eligible for the Excise remission scheme for manufacturers of alcoholic beverages and the Wine Equalisation Tax Producer Rebate will have their remission and rebate caps under each scheme lifted from $350,000 to $400,000 from 1 July 2026.
