Federal Budget and Federal Election

It’s Federal Election Time!

By Tina Zawila

Let the fun begin!  ​An election date has been announced following what seemed like a “last minute” Federal Budget and a swift reply from the opposition.  Please note that you should not act or rely on any announcements without considering your own circumstances and checking with your accountant or tax agent.

Small Business Instant Asset Write-Off

The Government announced that the $20,000 instant asset write-off threshold (for eligible businesses with less than $10million turnover) has been legislated and is extended to 30 June 2025, allowing small businesses to immediately deduct the cost of eligible assets, thereby encouraging investment in new equipment and technology.  It is important to note that this threshold is set to revert to $1,000 from 1 July 2025 unless further legislative changes are made. 

The opposition proposes increasing the instant asset write-off threshold to $30,000 as well as allowing tax deductions of up to $20,000 for meal and entertainment expenses (excluding alcohol), aiming to stimulate spending in the hospitality sector.

Energy Incentives

To enhance energy efficiency, the Government announced $56.7 million for Energy Efficiency Grants. These grants offer up to $25,000 per business to upgrade appliances and improve heating systems. ​ 

The opposition has proposed a temporary halving of the fuel excise from 50.8cents to 25.4cents per litre for 12 months, dedicating $6billion to this initiative, with the hope that this will reduce fuel costs.   They also announced a $1 billion Critical Gas Infrastructure Fund and a $300 million reinstatement of the Strategic Basin Plan, aiming to reduce wholesale gas prices, as well as their Nuclear Energy Development Plan to diversify Australia’s energy sources.

Relief for Individual Taxpayers

The 2025-26 Federal Budget introduces income tax cuts totalling $17.1 billion, aiming to alleviate cost-of-living pressures. These cuts reduce the income tax rate from 16% to 14% for the lowest income tax bracket (for income between $18,201 and $45,000) over the next two years.   

The opposition has criticized the tax cuts, suggesting that they were insufficient and proposed alternative measures to deal with the cost-of-living crisis.

Both the Government's budget and the opposition's reply, present distinct approaches to addressing economic challenges, focusing on energy efficiency, tax relief, and support for small businesses.  It is now over to Australian voters on Saturday 3rd May 2025, to decide who should govern the country.

If you need professional advice on any of the proposed measures, please contact the team at UHY Haines Norton CQ on 07 4972 1300.