Federal Budget 2025–26: What actually matters for small business

The Federal Budget has landed for 2025–26.

If you’re running a business, your inbox has probably been flooded with headlines and summaries—but most small business owners just want to know: What does this mean for me?

The short answer? There’s not a lot in this year’s budget directly aimed at small business. But there are still a few key measures worth paying attention to—especially with 30 June right around the corner.

You can watch our quick video summary at the top of this page. It covers the key points in under three minutes, cutting through the noise and delivering what you actually need to know.

Below, we break down the most relevant elements of the 2025–26 Budget for business owners.

Personal income tax cuts: not a huge impact

The headline of this year’s Budget is the staged reduction in personal income tax, set to begin on 1 July 2026.

The tax rate for the $18,201–$45,000 bracket will drop from 16% to 15%, and then to 14% from 2027–28. The result is a maximum saving of $268 in the 2026–27 year, and $536 from 2027–28.

These changes apply to individual taxpayers across the board—not just small business owners—but they’re unlikely to make a significant difference to most cash flows.

The $20,000 instant asset write-off is ending

One of the more impactful small business measures isn’t something new—it’s what’s missing.

The popular $20,000 instant asset write-off, which allows eligible businesses to immediately deduct the full cost of qualifying assets, is currently set to end on 30 June 2025.

From 1 July, unless legislation changes, the threshold drops to just $1,000. This change affects decisions around equipment upgrades, vehicle purchases, and other key investments.

If you’re considering a purchase that would qualify, it’s worth getting advice and actioning it well before the financial year ends.

ATO compliance is ramping up

The ATO is receiving nearly $1 billion in additional funding over the next four years to expand its compliance programs.

This includes taskforces focused on:

• Tax avoidance

• The shadow economy

• Personal income tax compliance

• Audits for medium-to-large businesses and high-wealth individuals

The government expects these programs to return more than three times what they cost, which means an increase in audit activity is almost certain.

If you’ve been putting off sorting out your books or finalising reporting issues, now’s the time to get things in order.

Energy rebate for households and small business

The Budget includes an extension of energy bill relief, with a $150 credit automatically applied to power bills for eligible households and small businesses.

The credit will be delivered in quarterly instalments from July through to December 2025. No applications are required—it will be applied directly to your bill.

While the rebate won’t drastically reduce operating costs, every bit helps in an environment where utility prices continue to put pressure on the bottom line.

Help to Buy scheme expanded—but still not active

The government has pledged $800 million to expand the Help to Buy program, which allows eligible Australians to co-purchase a home with the government—reducing the deposit and loan required.

The scheme offers up to 30% equity for existing homes and up to 40% for new builds.

Importantly, the income thresholds have increased to $100,000 for singles and $160,000 for joint applicants.

However, despite the funding, the program is still not open for applications—and no timeline has been confirmed. This makes it more of a political announcement than a practical opportunity for now.

Freeze on beer excise and changes to non-compete clauses

From August 2025, indexation on draught beer excise will be paused for two years, holding prices steady for breweries and hospitality venues.

Separately, a major industrial relations shift is on the way. From 2027, the government intends to ban non-compete clauses for most employees earning under the high-income threshold (currently $175,000).

This change is designed to encourage job mobility and competition in the labour market, and may require businesses to review their employment contracts over the next 12–24 months.

The bigger picture: economy, deficit, and what’s next

This year’s Budget is framed by slow national growth, rising debt, and growing global economic uncertainty. Key forecasts include:

• Real GDP growth of 2.25% in 2025–26

• A deficit of $42.1 billion

• Net debt increasing to 21.5% of GDP

• Unemployment expected to peak at 4.25%

It’s also worth noting that several major Budget measures—such as the super tax on balances over $3 million and the asset write-off extension—haven’t yet passed Parliament. If Parliament is dissolved ahead of an election, those measures will lapse unless reintroduced by the next government.

In other words, there’s still more to play out—especially with an election looming later this year.

What now?

While this Budget isn’t packed with surprises, it does serve as a reminder that EOFY is approaching fast, and the small windows of opportunity we do have—like the $20,000 asset write-off—may be closing.

If you're unsure how the Budget impacts your plans for the rest of the financial year, or you want to make sure you're in the best position ahead of 30 June, now’s the time to talk to your Trekk advisor.

Book your tax planning chat today.