2025 Federal Budget Update

Understand the key takeaways from the March 2025 Federal Budget and how it will affect your business.

What is the budget?

The Australian Federal Budget is prepared by the Treasurer and presented to Parliament. The budget outlines the proposed revenue and spending of the Australian Government for the upcoming financial year. The Federal Budget is also a political statement of the government’s intentions and priorities for the upcoming financial year and beyond.

The majority of government revenue comes from income & company tax, sales tax (GST), and interest and dividends. The government needs this revenue to pay for the public goods and services it provides, including, education, health, defence, infrastructure, welfare, and much more.

What did the March 2025 budget deliver?

The 2025 Federal Budget was largely focused on income tax cuts for all and cost of living measures. While not a heavily SME focused Budget, there was still plenty in there for Australian small businesses. Here are the key takeaways from the latest Budget announcement that may affect you and your business.

Instant asset write-off extension

The $20,000 instant asset write-off claim deduction has been extended again through to July 2026.

In the original budget announcement, this extension was to finish in July 2025, however they have now chosen to commit to another year of the extension.

Personal income tax cuts

The government has announced sweeping changes for all income earners. Starting in July 2026, two tax cuts will reduce the lowest tax bracket rate from 16% to 14% over two years.

This will be applied to the lowest tax bracket of $18,201-$45,000 and will be reduced to 15% for 2026-2027 ad 15% for 2027-2028.

Housing construction support

Extra incentives will be introduced to encourage apprentices to work in the housing industry.

$5,000 to $10,000 will be available for tradie apprentices who move into housing construction.

Supermarket crackdown

The competition watchdog will receive approximately $38 million to help increase enforcement measures against anti-competitive behaviour in the retail and supermarket sectors.

This is aimed at helping small businesses (i.e. suppliers) negotiate better terms with the larger supermarket businesses.

Electricity bill relief and energy efficiency

Energy rebates and an energy efficiency measure were introduced in the budget, focused on alleviating inflation and cost of living for households and small businesses.

All households and 1 million small businesses will receive a $150 rebate for the 2025-2026 financial year. For small businesses, $56.7 million has been allocated to the Energy Efficiency scheme, which grants up to $25,000 to replace inefficient appliances.