Yesterday, the government released the new federal budget, which includes a series of modest yet impactful changes for businesses.
Small businesses, already facing challenging conditions, have seen their contribution to GDP decline from 40% in 2006 to just 33% today. As a result, they’re employing fewer people.
In response to these trends, the government has taken a measured approach with the 2025 budget, aiming to provide some relief and support to this sector.
The budget introduces a number of small but significant adjustments, including tax changes and regulatory updates, all of which could impact how businesses and individuals operate.
Growth iQ has carefully analysed this year’s budget to provide you with a clear, comprehensive summary, highlighting the key points that matter most to businesses.
We’ll explain what these changes mean, how they could affect your operations, and the steps businesses should take moving forward.
1. Modest tax cuts
From July 2026, if you earn between $18,201 and $45,000, your tax rate drops from 16% to 15%. It drops again in July 2027 to 14%.
| Financial Year | Tax Rate Change | Annual Saving | Weekly Saving |
| 2026–2027 | 16% down to 15% | ~$268 per year | ~$5 per week |
| 2027–2028 onwards | 15% down to 14% | Additional ~$268 per year | Additional ~$5 per week |
While the tax cuts may sound appealing, they amount to approximately five dollars per week. This modest saving is unlikely to make a significant impact, leaving little room for indulgences like a weekly coffee or avocado toast.
2. Non-compete clauses scrapped
If you earn under $175,000, your employer won’t be able to stop you from immediately working for competitors. Great news for job mobility and possibly higher wages and great movement in the workforce (e.g. freeing Australian workers to move into a higher-paying job or to start their own business).
But employers might find it trickier to keep good staff around. And given how difficult it has been to attract and retain staff in recent years, this could be a blow to small businesses needing to grow their teams.
But, the government believes this change could boost the economy by $5 billion annually.
3. Farewell to instant asset write-offs?
Businesses have loved instantly deducting new equipment costing less than $20,000.
Sadly, this popular tax incentive is ending on 30 June 2025 unless something changes soon.
Get ready to return to regular asset depreciation.
4. ATO is keeping a closer eye on tax dodgers.
The government is allocating nearly one billion dollars over the next four years to enhance the ATO’s efforts in identifying and addressing tax evasion.
As a result, businesses and individuals, particularly larger enterprises, multinationals, or those engaged in cash-based transactions, can expect increased scrutiny through audits and reviews.
To mitigate the risk of potential issues, we strongly recommend maintaining tidy financial records to ensure compliance and avoid attracting unwanted attention from the ATO.
5. No Major Changes to Superannuation
Surprisingly, the budget says absolutely nothing new about superannuation. So, no clarity yet on that proposed tax hike for super balances above $3 million.
The planned super guarantee rise to 12% next year is still on.
6. Small businesses get a small helping hand… kind of.
The government is setting aside $12 million to support and protect small businesses, especially franchises, by:
- Investing $7.1 million over two years to strengthen ACCC enforcement of franchising rules to protect small businesses.
- Spending $3 million over four years from 2025–26 to boost ASIC’s data analytics, cracking down on illegal phoenix activities, especially in construction.
- Partnering with White Box Enterprises with $1.2 million in 2025–26 to offer small loans to social enterprises, supporting employment for disadvantaged Aussies.
- Allocating $0.8 million in 2025–26 to the Treasury to explore stronger protections against unfair trading practices and unfair contract terms for small businesses.
Expect stronger franchising laws, a crackdown on shady business practices, and better protection against unfair contract terms.
7. Beer excise frozen
If you run a pub or brewery, there’s good news! The beer excise tax won’t go up until August 2027.
Plus, modestly increased tax-free limits for beer, spirits, and wine from July 2026 might give brewers a reason to celebrate.
8. Managed Investment Trust (MIT) tweaks
The government plans to clear up MIT rules, making it easier for legitimate foreign investors to benefit from lower tax rates.
Also, MIT concessions for “clean buildings” will soon cover certain data centres and warehouses, pending legislation.
9. Energy rebates continue (but briefly)
The modest $75 quarterly energy rebate continues until December 2025.
This may be helpful now, but watch out for possible inflation when this support ends.
What’s missing from this budget?
Quite a lot, actually:
- Major superannuation changes or clarity on higher super taxes.
- Future for instant asset write-offs after June 2025.
- Plans for tackling government debt and spending.
- Adjustments to stop income bracket creep (a sneaky form of tax increase).
- Real tax reform or clarity on key issues like Division 7A, residency rules, or CGT relief.
- Productivity enhancements to support long-term economic growth.
- Solutions to ease reliance on migration for economic growth and housing issues.
Government Debt is Growing
This budget brings only small changes, so there’s not much for businesses to get excited about. Rising government debt is still a concern, with no clear plan to tackle it. Our advice is to stay alert, keep your financial records in check, and hope for more significant changes in the next budget.
For now, the good news is that your beer excise will stay the same!
Growth iQ is ready to help understand how these budget changes could affect your business, superannuation, or investments, feel free to contact Growth iQ at 08 8126 4100 or email us at [email protected].