In our expert commentary of this year’s Australian Federal Budget, we'll look at the winners and losers this time around and provide pointers to practices looking to advise their clients.
Read our deep dive into the Australian Federal Budget 2025 and learn more about its impact on the accounting industry over the next financial year.
The Australian Federal Budget 2025: how it happened
The Australian Federal Budget 2025 was handed down through official documents by Federal Treasurer Dr Jim Chalmers on Tuesday 25th March 2025. This is his fourth federal budget as Treasurer, and one which is set to lay the groundwork for the upcoming federal election campaign.
The budget unveiled a number of reforms which aimed to build economic resilience and ease cost of living pressures.
In his budget speech to the House of Representatives, Dr Chalmers spoke of the positive outlook for Australia’s domestic economy:
“This budget builds on the progress that we have made together. It’s a plan to help with the cost of living with two new tax cuts and higher wages, more bulk billing and more help with electricity bills, cheaper medicine and less student debt.
It is a plan to build Australia’s future with more homes, more investments in skills and education, competition reforms and a future made in Australia.”
The budget documents detailed $785.7 billion of spending for 2025-26 financial year, with a projected $42 billion in deficit.
What are Australia’s leading professional bodies saying?
Australia’s leading professional accounting body, CPA Australia, felt that the budget lacked “vision and ambition” with no incentives for small business.
In a media release, CPA Australia Chief Executive Officer, Chris Freeland AM, said “Businesses and their advisers will find little in the Federal Budget that will help offset the pain all-too-many small businesses have been experiencing.”
In their snapshot of the 2025-26 Federal Budget, Chartered Accountants ANZ had a similar take on the measures handed down, stating that it provides “tax cuts and cheaper beer but little in way of substantive tax announcements apart from more money for ATO compliance.
The budget provides little relief for tax agents who are struggling with red tape and an uncertain tax system – most announced but unenacted measures remain unaddressed.”
Australia Federal Budget 2025: Key takeaways for the accounting industry
Silence on the instant asset write-off
The instant asset write off (IAWO), which was extended in the 2023 Federal Budget, and then further extended in the 2024-25 budget, is seemingly in limbo as we head into the election cycle.
Initially a COVID-stimulus measure, the IAWO has helped eligible smaller accounting practices and vulnerable Australians with small businesses with an annual turnover of less than $10 million in instant asset write-off through the Australian Taxation Office (ATO).
CPA Australia Chief Executive Officer Chris Freeland said of the IAWO that it: “should have been made permanent – but it remains in limbo.
Making it permanent would provide the certainty and opportunity businesses need to invest and grow. They cannot make serious long-term financial decisions when the rules could change every year.”
Expanding ATO compliance
Labor also announced that the ATO would be provided with $999 million period with the aim of extending and expanding tax compliance activities.
Through this additional funding, the budget committed to $717.8 million over a four-year period (commencing from 1st July 2025) to expand the Tax Avoidance Taskforce for two years and extend it for one.
The Tax Integrity Program would also be extended, with $50 million of the funding provided over three years from 1 July 2026.
The budget papers stated that this will "enable the ATO to continue its engagement program to ensure timely payment of tax and superannuation liabilities by medium and large businesses and wealthy groups.”
Cybersecurity loses out this year
While there were significant cybersecurity investments in the 2023 and 2024 budgets, the Federal Budget for 2025 is light on further investments in this area.
Cyberdaily notes that this development is primarily due to this being an “election budget” with the government investing where there are hopes of securing votes from an electorate clearly impacted by cost-of-living conditions.
“It’s encouraging that the Government continues its commitment to small businesses, with over $60 million allocated since the 2023–24 Budget to the Digital Solutions program, Cyber Wardens, Small Business Cyber Resilience Service and Cyber Health Check.
These programmes represent important progress, but many SMEs still lack the resources, in-house expertise and support to respond effectively to growing cyber threats. As the backbone of our economy, they need more tailored assistance to strengthen their cyber resilience.”
Chris Freeland AM
CPA Australia Chief Executive Officer
Small accounting practices are often vulnerable targets to cyber threats due to the vast amounts of sensitive financial data they hold. There was a significant increase in cybercrime in 2024 in Australia, with a rise from 4.1 million to 47 million data breaches. Read everything you need to know on this topic in our guide to cyber security for accounting practices.
Reduction in HECS student debts
When having discussions with clients with outstanding HECS and HELP debts, accountants should inform them that there will be a 20 per cent reduction, that will be subject to legislation coming into effect.
This measure is set to remove $16 billion from the student loan accounts of 3 million Australians, according to the budget documents. This announcement follows a HELP indexation cap backdated to June 1, 2023.
Compulsory HECS and HELP debt repayments will be also reduced by $850.
Energy bill relief for households and small businesses
All Australian households and businesses will be eligible for an additional $150 in energy bill relief if Labour is re-elected.
This plan will see the extension of two $75 instalments paid over a six-month period until the end of 2025.
Sanctions for tax agents
A $27.4 million investment was set aside, aimed at bolstering the Tax Practitioners Board's (TPB) enforcement powers and modernising registration. The funding will enable the TPB to proactively address high-risk tax practitioners.
The proposed implementation dates are set for 1 July 2026 (sanctions) and 1 July 2027 (registration), the window for detailed consultation and the development of draft legislation is considered to be notably short by the accounting industry.
Several proposed reforms are considered positive steps, including:
- The return of criminal penalties for those operating without registration.
- The introduction of legally binding voluntary agreements.
- The continuation of the registered association pathway.
- Confirmation that in-house tax advisors will not be required to register.
- The decision not to mandate a specific ratio of registered practitioners within an entity.
- Updates to the registration process, offering more flexible timelines for gaining necessary experience, particularly beneficial for individuals returning to the profession.
- The exclusion of micro-credentials as primary qualification components.
Banning non-compete clauses
The government announced a non-compete clauses ban, which aims to boost competition and remove barriers for employees starting up their own businesses.
Within the budget papers, this initiative was said to create freedom for many Australian workers looking to move to more higher paying roles. It’ll also close competition law loopholes blocking staff from being hired by competitors.
Accountants should be aware of this development when advising clients looking to start their own business. It is also of considerable value for those accountants looking to start their own accounting practice.
Watch the Federal Budget 2025 commentary from ChangeGPS
The Federal Budget is a pivotal part of the tax planning process. There's always the potential for significant changes that may impact your tax advice and may be challenging to explain to your clients.
In this year’s webinar, ChangeGPS will unpack all the essential details to help you communicate updates that matter to your clients.
In Summary
The spending measures announced during the Federal Budget 2025 are tailored towards our current cost of living crisis in Australia and are clearly reflective of the priorities for the upcoming federal election.
Now that you have read more about the contents of the Federal Budget papers, and how they impact your accounting practice, and your clients, you may be considering how to enter the new financial year with a fresh start.
You may want to consider whether you have the right software for business advisory services to help your clients make sense of the Federal Budget changes and what it means to their business.