In this article, we unpack what to expect over Labor’s next term and what its policies mean for your business operations.

What’s the upshot?

As we covered in our pre-election breakdowns, neither major party stepped up with game-changing policies for SMEs this election. Key asks from advocacy groups – like meaningful tax reform and deregulation – fell by the wayside.

“Throughout this election campaign, we have seen a lot of tinkering around the edges but nothing that meaningfully changes the playing field for small businesses, which are up against surging rents, power and insurance costs, as well as complex workplace laws,” said COSBOA CEO Luke Achterstraat.

Most of Labor’s big election promises and policy plans will impact small-business owners more in the big-picture and long-term. Take the extra $3 billion for the NBN, for instance – while not SME-specific, it’s a clear positive for the millions of business owners who rely on fast, stable internet to run their operations.

Then there are tax cuts rolling out over the next couple of years, which could drive up customer spending and free up working capital for those SME owners who use personal funds to keep their ventures afloat.

There are also more more SME-specific policies to be aware of, like an extended $20,000 asset write-off, more worker protections like banning non-compete clauses, and energy bill relief for eligible businesses.

The Instant Asset Write-Off (IAWO) will be renewed, but remains at $20k

While the $20k IAWO has been renewed for another year, it hasn’t necessarily been received well by business advocates. COSBOA, for example, has called for the ceiling to be lifted permanently to $150,000.

“For many small businesses, [the $20k IAWO] is not enough,” financial business strategist Mark Waller told ISB. “The risk is that it encourages spending purely to reduce tax, rather than driving genuine business value. Owners should be wary of tax-time pressure and focus on purchases that truly support their operations.”

Support with energy bills and sustainability upgrades

Business and industry experts were more optimistic about Labor’s energy policies, which may lessen some cost burden on SMEs over time.

Sustainable energy solutions provider Avani Solutions is hopeful about Labor’s efforts to decarbonise the energy grid, as well as commitments to lessen the burden on households and businesses.

“Efforts to reduce household energy bills should see energy prices stabilise and come down over time,” said Head of ESG Ian Lieblich.

These efforts include battery subsidies, further rebates for small businesses, continuation of the Energy Efficiency Grants for Small and Medium Enterprises program, and continued FBT exemptions on electric vehicles – which the Coalition had promised to scrap.

Further IR changes could mean more red tape

A big area of concern for Labor recently has been IR. The party introduced a raft of changes in its past term – like the ‘right to disconnect’ and updated award definitions. 

And business owners can expect more in this next term, with the reelected Albanese Government proposing a ban on non-compete clauses and some big (and controversial) superannuation changes.

The suite of IR reforms, as well as other changes like cyber security incident reporting, have increased some of the compliance burden on small businesses in recent years. 

Business coach Shani Taylor told ISB she’s cautious about the potential red tape burdens of some of Labor’s policies, particularly for sole traders.

“If you don’t have a team or systems to handle the red tape, you’ll spend more time ticking boxes than building a business – and that means fewer solos will survive long enough to scale,” said Taylor.

To minimise the impact of compliance burden, Taylor recommended investing in ways to streamline and automate business operations.

What next?

• Talk to your accountant about how you could be making the most of the renewed instant asset write-off before EOFY.
• Stay tuned for energy efficiency grant openings via the GrantConnect website.
• Review employment contracts in light of proposed IR changes – and/or speak to your lawyer about what they mean for you.

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MYOB’s latest Bi-Annual Business Monitor survey has underscored this with the finding that 40 per cent of the more than 1000 SMEs surveyed would vote for sector-specific spending to support small businesses through the current economic environment.

Cashflow in particular remains a critical concern for SME owners and operators. Given the situation, the top three policies SMEs would vote for are reducing the company tax rate to 20 per cent for small businesses (stated by 66 per cent of respondents), simplifying the GST and BAS reporting process (stated by 59 per cent) and making the instant asset write-off permanent (58 per cent).

Rising utility costs are also a top concern for SMEs (shared by 35 per cent), followed by fuel prices (33 per cent), price margins and profitability (27 per cent) and interest rates (25 per cent).

“Small and mid-sized businesses together contribute more than half of Australia’s GDP. Their vital economic role ultimately thrives on stability and predictability,” said MYOB CEO Paul Robson. “A commitment to long-term, steady policies that provide the certainty needed for confident business planning and investment – which flows onto job security for millions of Australians – is what SME owners and operators are seeking this election.”

The report noted that given the huge number of Australians employed by SMEs (more than eight million according to recent statistics), measures that can support SMEs will have far-reaching effects on the national economy, as well as the everyday life of many Australians.

Robson said: “In this final week, all political parties should recognise the central role that small and mid-sized businesses play in our economy and ensure they communicate the policies that address their concerns. This isn’t just about supporting business owners – it’s about maintaining the right conditions for job creation, innovation, and economic growth that benefits all Australians.”

He concluded by saying, “This election comes at a pivotal time for the SME community and the ongoing trajectory of the economy they contribute to so considerably. The outputs of this sector are significant, and so ensuring an environment in which these owners and operators can effectively grow their business in 2025 and beyond is essential.”

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Earlier this week, we summarised the key tax changes that major parties have promised entrepreneurs. We also outlined the ways they’re planning to cut red tape for small-business owners.

In this article, we’re looking at how the major parties will cut your operating costs. Here are the promises they’ve made in the lead-up to this election:

Labor:

$150 energy rebate: Labor has extended its energy rebates into next financial year – though this one will be a $150 energy rebate. About one million small businesses will be eligible.

Cheaper battery installation for small businesses: Under this scheme, SMEs would get 30 per cent off the cost of installing a new battery.

Labor has also announced cost-of-living measures to put some money back into business owners’ pockets: a 20 per cent reduction in student debt, an expansion of bulk billing, a modest tax cut over three years for all taxpayers.

Though these measures don’t decrease the cost of doing business per say, they may free up some more business capital for the many entrepreneurs who self-fund their ventures.

Coalition (LNP):

$12,000 wage incentives for apprentices: The Coalition has promised to provide small and medium businesses with $12,000 towards hiring a new apprentice or trainee – though this will apply only “in critical skill areas”, focussed in the building and construction sector.

Fuel savings: For those businesses who use vehicles, the Coalition is promising $14 a week in savings across a 12-month period. The measure is its answer to Labor’s promise of $536 in tax cuts over two years, which the Opposition refused to support.

Reducing transaction frees: The party has pledged to mandate least-cost routing to help businesses reduce transaction fees.

The Coalition has also pledged cheaper energy through gas – its answer to Labor’s energy rebates and renewable energy push.

Both parties:

Freezing draught beer excise indexation: Both the LNP and Labor say they will freeze the biannual indexation of excise duty for draft beer from August 2025, reducing operating costs for sellers.

As the election nears, small-business owners will be weighing these promises carefully. Inside Small Business will continue to unpack what each party’s platform means for Australia’s SMEs.

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Earlier today, we summarised how the major parties plan to cut red tape for small-business owners. 

In this article, we’re outlining all the tax-change promises relevant to small-business owners.

Here’s what the major parties have pledged:

Labor:

Labor’s tax sweeteners were less directed at small-business owners specifically than the Coalition’s. Nevertheless, it has promised to:

Renew the $20k Instant Asset Write-Off (IAWO) for another year: Labor has promised to revive the popular tax write-off for another year, which will allow businesses to immediately deduct eligible assets up to a ceiling of $20,000.

A new $1k automatic tax deduction: The party has also promised a new automatic $1000 tax deduction for work-related expenses – and no receipts or audits would apply. Those wishing to claim actual expenses, with full substantiation, could choose to do so instead of receiving the flat $1000 deduction.

Modest tax cuts: Labor has promised modest tax cuts for all taxpayers over the next few years. To help calculate the difference this would make for you, Labor released a tool on its Budget website.

Coalition (LNP):

The Coalition has been heavily courting the small-business vote this election campaign. It’s promised entrepreneurs that it will:

Introduce a new Entrepreneurship Accelerator: This would be a new tax offset initiative for businesses in the first three years of operation. New ventures would get a tapered tax offset starting at 75 per cent of their first $100,000 of taxable income, and 50 per cent for their second $100,000 of income in their first year of operation.

Raise the IAWO to $30k (and make it permanent): The LNP will slightly raise the IAWO cap and has pledged to make the scheme permanent to give business owners more certainty around investment.

Deliver a $2k ‘tech booster’ deduction: For the first two years of a Coalition Government, the party would make some tech purchases over $4000 eligible for a bonus $2000 tax deduction.

Make business-related meals tax deductible: Peter Dutton has also promised to make business-related meal and expenses tax deductible for small businesses, with a cap of $20,000. This policy was subject to a costings clash between the two major parties earlier this year, with Treasurer Jim Chalmers alleging the scheme would cost $1.6 billion.

Introduce a one-off $1200 tax offset for taxpayers earning between $48,000 and $104,000.

How much do tax incentives really benefit small businesses?

Some of the tax promises above revolve around tax deductions. These types of policies are popular with businesses and advocacy groups alike – COSBOA, for instance, is advocating for a $150,000 permanent IAWO.

But a recent discussion paper by the Reserve Bank of Australia concluded that evidence for tax incentives is “mixed at best”, in terms of encouraging additional business investment. After all, it’s all well and good to be able to deduct a new business investment, but you need to have the cash to make that investment in the first place.

Businesses want more

Though there are some promising policies, neither party has promised anything close to the major tax reform that business owners and advocacy groups are crying out for.

They’ve been asking for measures like company tax rate cuts, a rightsized GST system, and the overhaul or removal of payroll tax.

COSBOA, for instance, wants the company tax rate to be decreased to 20 per cent from the current rate of 25 per cent for businesses with an annual turnover of up to $20 million.

“Cutting the tax rate would have an instant impact and provide Australian small businesses with the fair go they deserve,” said COSBOA CEO Luke Achterstraat.

“Investment growth has been lacklustre in Australia, leading to reduced competition, higher prices and lower living standards. RBA research confirms lower tax drives new investment.”

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In this article, we’re covering red tape – or changes promised by the parties that could ease the administrative burden on small-business owners.

Here’s what the major parties have said they will do:

Coalition (LNP):

The Coalition’s 2025 election campaign has catered directly to small-business owners with a few specific deregulation promises. Here’s what it’s pledged to do so far:

Repeal two major IR changes: Dutton has promised to change the definition of a casual worker back to the former, simpler version. Also on the chopping block is the newly-introduced ‘right to disconnect’ – although this isn’t scheduled to apply to small-business owners until later this year. 

Set up a Cabinet-level Small Business Deregulation Taskforce: No specifics on this so far, but it could resemble the last small-business specific deregulation taskforce of the same name from 1996. This was a six-month effort to reduce the regulatory burden on small-business owners and culminated in a set of key recommendations.

Simplify corporations law: The LNP’s promise to simplify corporations law in its Plan for Small and Family Business could be significant for small companies. The Coalition plans to do this by working with ASIC to make changes to the Corporations Act.

Work with ASBFEO to simplify starting a new business: Part of a larger push to encourage Australians to start businesses, the LNP will task the ABSFEO to come up with ways to make setting up a venture faster and cheaper.

Labor:

Labor’s red tape strategy focuses more on longer-term structural fixes, like harmonising state rules and tackling declining productivity. Here’s what it’s got in store:

$900 National Productivity Fund: Labor will continue to administer the National Productivity Fund that it worked with the Business Council of Australia to create. 

The goal of the fund is to boost productivity and streamline approvals processes in partnership with state governments. So far, this has reduced red tape in areas such as environment, foreign investment, mergers and acquisitions, energy planning, and cultural heritage, according to Treasurer Jim Chalmers. 

National Small Business Strategy: Labor’s National Small Business strategy identified key focus areas for the sector going forward. At the heart of the plan was an acknowledgement of the regulatory complexity faced by small businesses. It also sets out how jurisdictions will work together to avoid duplication of resources (and confusion).

Banning non-compete clauses: In another productivity-focused initiative, Labor plans to ban non-compete clauses if reelected. While framed as a way to remove barriers to entrepreneurship, the change could also complicate IP protection for some businesses, depending on the final safeguards introduced.

Of course, promises are easier made than delivered.

While the Coalition’s pitch leans on immediate deregulation aimed squarely at small businesses, Labor’s approach targets deeper systemic reforms that could take longer to materialise.

How much red tape is actually cut, and whether small businesses feel the benefits, will ultimately depend on execution after the election.

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The first is an ‘Entrepreneurship Accelerator’ to support businesses in the first three years of their operation. These new ventures would get a tapered tax offset starting at 75 per cent of their first $100,000 of taxable income, and 50 per cent for their second $100,000 of income in their first year of operation.

The Coalition has also promised a $2000 tax deduction for tech upgrades of $4000 or more as part of a ‘Tech Booster’ initiative.

Both pledges were included in the LNP’s new ‘Plan for Small and Family Business’, also released on Saturday. The plan includes other measures announced earlier in the election campaign, like a permanent $30,000 instant asset write-off, $20,000 worth of tax-deductible dining, and removing a suite of IR changes introduced by Labor, such as the ‘right to disconnect’ law.

The plan has been welcomed by The Council of Small Business Organisations Australia (COSBOA), but it says that the Coalition’s promises still don’t go far enough.

“Our Fair GO for Small Business campaign is asking for a tax cut for small business from 25 per cent to 20 per cent to provide immediate and ongoing relief to the lifeblood of our economy,” said COSBOA CEO Luke Achterstraat.

However, the SME peak body was optimistic about the Coalition’s plans to slash red tape for businesses via a ‘Small Business Deregulation Taskforce’ in Cabinet.

“Removing red tape requires more than rhetoric – it needs a concerted effort and coordination between key portfolios,” said Achterstraat. “It is vital this taskforce engages with industry and is ambitious in its agenda.”

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As it stands, currently 21 per cent of SME leaders remain undecided ahead of the upcoming May federal election, compared to the 10 per cent that was registered in the 2022 election.

Amid this current indecision, SME leaders hope that the next elected government could bring to fruition some key policies and initiatives. In particular, 22 per cent of SMEs, equally split between those experiencing business growth and contraction, wish for the easing of labour regulations, 20 per cent, meanwhile, seek company tax cuts and lighter touch enforcement from the Australian Tax Office (ATO), and 19 per cent want no further increase in the Superannuation Guarantee, which is set to rise again on 1 July to 12 per cent of ordinary wages.

ScotPac CEO Jon Sutton commented that it was no surprise that more SMEs are torn over what to do at the ballot box than in 2022.

“Business owners have borne the brunt of inflationary pressures over the past three years, but they feel like they have been left in the political wilderness,” Sutton said. “SMEs have had to navigate the rising cost of living alongside huge increases in the cost of doing business. Wages, superannuation, insurance, and energy costs have surged at a greater rate than revenue growth for thousands of businesses.

“This combination of factors has put enormous pressure on working capital, depleted SME cash reserves and created a sense of isolation. The message from SMEs ahead of the election on May 3 is clear – if you want our support, give us the support and space we need to keep employing and servicing millions of Australians,” Sutton added.

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Labor pledges $1000 automatic tax deduction

Labor has promised a new automatic $1000 tax deduction for work-related expenses. Individuals claiming this automatic deduction would not require receipts and the ATO would not conduct audits. Those wishing to claim actual expenses, with full substantiation, could choose to do so instead of receiving the flat $1000 deduction.

According to Mark Chapman of tax agency H&R Block, the deduction would apply to about six million workers who currently claim less than this amount. However, taxpayers wouldn’t see benefits until July 2027.

“The $1,000 is a deduction, not a refund,” he added. “The actual benefit depends on your tax rate.”

Reduction in bottom income tax rate

Labor is also promising a small (1 per cent) reduction in the bottom income tax rate. Small-business owners earning an income of between $18,201 and $45,000 would see savings equivalent to roughly one cup of coffee per week.

Coalition promises one-off $1200 tax offset

The Coalition has promised a one-off $1200 tax offset to be made available next financial year. The offset would apply to individuals earning up to $144,000, but the full amount would only apply to those earning between $48,000 and $104,000.

The offset would be paid as a lump sum at tax time, and taxpayers would have to lodge a return to receive it. It also ends in the 2026-27 financial year.

“It is strictly time limited, therefore in 2026-27 the offset ends…with the resulting pain of not receiving the offset looking very like a tax increase to many taxpayers,” said Chapman.

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The debate, which is set to happen on 23 April, will be the first time during the election campaign that a debate is held directly with representatives from both small and large businesses in attendance. This is also expected to be the last economic debate of the campaign.

Business Council of Australia Chief Executive Bran Black said that the business debate allows both sides present a long-term plan for economic and productivity growth in the interest of growing prosperity for all Australians.

“Rising global uncertainty means it is more important than ever that our political leaders present their economic vision to support small and large businesses to grow and generate prosperity,” Black said.
With six in every seven workers employed by the private sector, and businesses and the people they employ accounting for the bulk of tax revenue, we need to see both parties put forward a plan that fosters private sector-led growth.”

“Around 80 per cent of our economic output comes from businesses, and so if we’re to grow prosperity for all Australians and boost living standards, the test for both parties is whether they have a plan to support businesses to grow,” he added.

COSBOA CEO Luke Achterstraat also looks forward to co-hosting the debate saying, “Small businesses employ over 5 million Australians but are often taken for granted and hidden in plain sight.We anticipate this debate will provide constructive engagement to discuss the challenges and opportunities facing the Australian economy, and hope this becomes an annual fixture.”

COSBOA and CBA have previously published an open letter calling on candidates and politicians from all political sides to come together in forming a common agenda that will support the growth and prosperity of all Australian businesses.

Achterstraat said, “During uncertain economic times, dialogue and engagement between industry has never been more important.”

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The Treasury says it estimated the cost of the policy “based on parameters made publicly available by the Coalition” so far.

“We now know from the Treasury costing that what Peter Dutton is proposing will cost $1.6 billion a year, but could cost more than $10 billion a year,” Chalmers said in an ABC interview on Tuesday.

The Treasurer went on to explain that the $1.6 billion number is a “conservative” estimate, based on the assumption that eligible businesses would only claim an eighth of what they’re entitled to. The $10 billion figure is a “worst-case scenario”.

“If they claim everything they’re entitled to it would be more than $10 billion a year,” he said.

Shadow Treasurer Angus Taylor took to Sky News later that day to dispute the Treasury’s costings, claiming the proposed incentive would cost a much more conservative $250 million.

“We’ve had this policy costed by the Parliamentary Budget office,” said Taylor. “It’s under $250 million. We’ll put out the detailed costings in advance of the next election, but it’s nothing like what he’s talking about.”

An actual costing would likely depend on the specific design of the policy, which hasn’t been detailed in full by the Coalition yet.

Amid the usual political back-and-forth, ISB has been asking small-business owners what they’re really voting for in the upcoming election. They want relief in terms of red tape and support with R&D, learning, and technological innovation. Facing rising business expenses, many are also asking for a more balanced tax system and greater clarity around tax incentives.

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