The latest policy announcements and election commitments relevant to accountants and advisers.
The election is on 3 May 2025. As the parties roll out their policies, we’ll bring you the latest announcements and election commitments relevant to accountants and advisers, and their clients.
We won’t cover ad-hoc comments and supposition - like most of the commentary on the financial advice and accounting industry generally, unless it’s a stated position.
Tax
Superannuation
Cost of living
Housing
Small Business
Energy
Tax
Personal income tax
Personal income tax cuts
25 March 2025: The Government has enacted a “modest” tax cut to all taxpayers from 1 July 2026 and again from 1 July 2027.
The tax rate for the $18,201-$45,000 tax bracket will reduce from its current rate of 16%, to 15% from 1 July 2026, then to 14% from 2027-28 at a cost of $648m over four years. The saving from the tax cut represents a maximum of $268 in the 2026-27 year and $536 from the 2027-28 year.
Legislation enabling the tax cut passed Parliament on 26 March 2025.
In his Budget reply, Opposition Leader Peter Dutton has stated that he will repeal the tax cuts labelling them "insulting".
$1,000 instant work related expenses tax deduction
13 April 2025: Labor have committed to providing taxpayers who earn labour income with a $1,000 shortcut work related deduction claim on their tax return.
Taxpayers who are likely to have claims higher than $1,000 can claim in the usual way.
The simplified tax deduction is only available to those earning labour income. Those earning business or investment income only will not be able to claim.
Charitable donations and other non-work related deductions would continue to be claimed on top of the instant tax deduction.
The proposal does not abolish the need to lodge a tax return.
See: Tax reform for easier, faster, better tax returns
$1,200 cost of living tax offset
13 April 2025: The Coalition have committed to a Cost of Living Tax Offset of up to $1,200 in the upcoming financial year. The tax offset will be accessible to taxpayers earning up to $144,000 with the full offset accessible to those earning between $48,000 and $104,000. See Coalition to Deliver Targeted Cost of Living Relief.
Tax deduction for first home owner interest payments
13 April 2025: The Coalition have committed to a First Home Buyer Mortgage Deductibility Scheme. Under the scheme, first home owners purchasing a newly built principal place of residence will be able to deduct the interest paid on up to $650,000 of their mortgage from their assessable income for the first 5 years of the mortgage.
There is no cap on the overall size of the mortgage as only interest on the first $650,000 is eligible. The scheme will be available to individuals earning up to $175,000 and joint applicants earning up to $250,000 (once eligible, participants will retain access to the deduction even if their income rises). See Creating a New Generation of First Home Buyers First Home Buyer Mortgage Deductibility.
Small business tax incentives
Tax deductible entertainment for SMEs
18 Jan 2024: In a move designed to garner favour with small and medium businesses and support the struggling hospitality industry, Peter Dutton has promised a two year $20k per annum “business-related meal and entertainment expenses” tax deduction.
Generally, the cost of entertaining your clients – food, drink or other entertainment – is not tax deductible. The main exception to this is where entertainment is provided to employees and this triggers a fringe benefits tax (FBT) liability for the employer.
If enacted, the entertainment boost will:
Be available to SMEs with an aggregated turnover under $10m
Apply to “business-related meal and entertainment expenses” but EXCLUDES alcohol.
Expenses under the measure will be exempt from FBT.
What’s the current definition of ‘entertainment’
There has been a lot of chatter about what is included as entertainment in the Coalition’s policy. Peter Dutton says that the initiative is not, “going to extend to playing golf and the rest of it – it’s not.”
The tax rules basically define ‘entertainment’ as being entertainment by way of food, drink or recreation plus travel and accommodation relating to the provision of entertainment. This means that things like golf games, movie or theatre tickets, and accommodation at resorts, can all fall within the definition of entertainment for tax purposes.
There are multiple interacting tax laws involved in entertainment. The way it normally works is that a business cannot claim a tax deduction or GST credits for expenses relating to entertainment unless a specific exception applies. As noted above, the main exception is where the entertainment is subject to FBT (i.e., where the entertainment is provided to an employee and a specific FBT exemption doesn’t apply).
It’s difficult to see how this policy initiative will come to fruition without a tight set of definitions around what entertainment is deductible.
See New Tax Deduction to Deliver Red Tape Relief for Small Business
Extending the instant asset write-off for small business
An increase to the $1,000 instant asset write-off threshold has been a consistent feature of Federal Budgets by various Governments as an incentive for small business to invest.
The instant asset write-off has been in place since 1 July 2011 where it applied to businesses with an aggregated turnover of less than $2 million. The turnover threshold increased to $10 million from 1 July 2016. The threshold has only reduced back to the original $1,000 once in the last 13 financial years. See more on the instant asset write off here.
The extension of the increased instant asset write-off threshold of $20,000 to the 2024-25 financial was passed by Parliament on 26 March 2025.
Permanent $30k instant asset write-off
16 May 2024: Peter Dutton promised to permanently increase the instant asset write-off to $30,000 in his Budget reply speech. It’s a promise that he has repeated consistently since the announcement. See Budget reply. The policy was reaffirmed in the Coalition leaders 2025-26 budget reply.
Extension of $20k instant asset write-off to 2025-26
4 April 2025: Labor has committed to extending the $20,000 instant asset write-off for small business to 30 June 2026. See More tax relief for small businesses under Labor.
Tapered tax offset for newly incorporated businesses
19 April 2025: The Coalition have committed to a tapered tax offset for newly incorporated businesses for the first three years of their operation. The offset will provide a 75% offset on the first $100,000 of taxable income, and 50% for their second $100,000 of income in their first year of operation. See Coalition’s Plan to get Small Business Back on Track.
$2k Tech boost tax deduction
19 April 2025: The Coalition have committed to a ‘Tech Booster’ that will provide a tax deduction of up to $2,000 or eligible technology investment over $4,000. Eligible investments include digitally enabling tech (e.g. connectivity tools like Starlink), digital media and marketing (e.g. websites and CRMs), eCommerce tools (e.g. modern point-of-sale systems) and cyber security (e.g. training and monitoring systems). See Coalition’s Plan to get Small Business Back on Track.
Halving fuel excise
27 March 2025: In his Budget reply, Peter Dutton has promised that the Coalition Government will halve fuel excise for 12 months, enacted on the first day of Parliament. The policy is estimated to cost $6 billion.
Superannuation
First home buyers accessing up to $50k in super
27 March 2025: In his Budget reply, Peter Dutton has stated that a Coalition Government will enable first home buyers to access up to $50,000 of their super for a home deposit.
Cost of living
Energy rebate extended
23 March 2025: The Prime Minister extended energy rebates. From 1 July 2025, households and small business will be eligible for a further $150 rebate until the end of 2025. The rebates will automatically apply to electricity bills in quarterly instalments.
The extension of energy bill rebates will cost $1.8 billion over the forward estimates. See More energy bill relief for every Australian household and for small business.
Cheaper home batteries
6 April 2025: Labor have committed to reducing the cost of home batteries from 1 July 2025. Through our scheme, households will be able to purchase a typical battery with a 30% discount on installed costs – saving around $4,000 on a typical battery. The initiative extends the existing Small-scale Renewable Energy Scheme. See Labor to deliver one million energy bill busting batteries
Housing
See also:
Tax deduction for first home owner interest payments
5% deposit scheme for first home buyers
13 April 2025: Labor have committed to a 5% deposit scheme for all Australian first home buyers. Under the scheme the Government will underwrite eligible first home buyers, enabling them to purchase a property with a 5% deposit without the need for Lenders Mortgage Insurance.
Expanding the existing first home buyer scheme, Labor says, “there will be higher property price limits and no caps on places or income, in a major expansion of the existing scheme.”
The existing Home Guarantee Scheme is limited in places and subject to income tests. The scheme is open to Australian citizens or permanent residents who have never owned property or land in Australia, or have not owned property or land in Australia in the last 10 years, and available to owner occupiers only.
See: Labor to deliver 5% deposits for all first home buyers and build 100,000 homes
Extension of Home Guarantee Scheme
14 April 2025: The Coalition has pledged to uncap the number of places available under the Home Guarantee Scheme, and increase the threshold for the income test to $175,000 for individuals and $250,000 for joint applicants, and extend the property price cap (up to $1.5m in NSW, $950k in VIC and $1m in QLD). See Creating a New Generation of First Home Buyers First Home Buyer Mortgage Deductibility.
Small business
National small business strategy
3 Feb 2025: Labor have released their National small business strategy for consultation. The strategy primarily addresses how different government jurisdictions work with small business and how to relieve some of the friction when dealing across government systems and requirements. Less about small business and more about how to ensure government is not making it harder.
19 April 2025: The Coalition have released their Plan for Small and Family Business. The plan includes two new tax incentives for Australians to launch and grow a small business of their own – an Entrepreneurship Accelerator providing a tapered tax offset for the first 3 years of operation (see Tapered tax offset for newly incorporated businesses) and a ‘tech booster’ providing a $2,000 tax deduction for tech upgrades of $4,000 or more (see $2k Tech boost tax deduction). See Our Plan for Small and Family Business.
Energy
Green Aluminium Production Credit
20 Jan 2025: The Government has $2bn set aside for a new Green Aluminium Production Credit to support Australian aluminium smelters switching to renewable electricity before 2036 (there are four of them).
Like us, you are probably wondering why the aluminium industry has been singled out. The reason is two-fold; Aluminium is the second most used metal in the world; and according to the Institute of Energy Economics and Financial Analysis, represents about 10% of Australia’s electricity demand - Tomago Aluminium just north of Newcastle in NSW, is the largest single user of electricity in the country with electricity making up about 40% of its costs. Transition from brown to green energy is not just a consumption issue for the industry, it is a recreation of the value chain.
Under the initiative, smelters will be able to negotiate an emissions-linked credit contract payable per tonne of green aluminium produced for up to 10 years. The final credit rates will be based on individual facility circumstances and be dependent on reducing Scope 2 emissions. Scope 2 emissions are indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat or cooling. They account for around 85% of emissions from aluminium smelting. See: Aluminium to forge Australia's manufacturing future and Department of Industry, Science and Resources. New Green Aluminium Production Credit will support the transition to green metals
27 March 2025: In his Budget reply, Peter Dutton has stated that a Coalition Government will scrap the government's production tax credits for green hydrogen.
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