A Guide for Small Businesses
As the unveiling of the 2025 budget transforms Australia's economic horizon, small businesses must prepare for what it means for them.
Let's delve into key provisions and opportunities that the 2025 budget presents for small businesses:
Budget Highlights in a Nutshell: Deficit, GDP Growth, and More
Deficit: A $42.1 billion deficit underscores the fiscal landscape, signaling the need for prudent financial management and strategic decision-making.
GDP Growth: With a forecasted 2.25% growth for 2025-26, small businesses have the potential to capitalise on economic upswings and consumer demand.
Unemployment: At a low of 4.25%, the labour market stability bodes well for hiring and retaining talent within small businesses.
Inflation: Expected to normalise in mid-2025, businesses can anticipate stable pricing environments and consumer spending patterns.
Opportunities for Individuals & Families: Tax Cuts, Welfare, and Healthcare
Personal Income Tax Cuts: A progressive reduction in tax rates promises savings for individuals, potentially boosting disposable income and consumer spending.
Taxable income | Annual tax savings 2026/27 compared to current FY | Annual tax savings 2027/28 onwards compared to current FY |
$25,000 | $68 | $136 |
$35,000 | $168 | $336 |
$45,000 or more | $268 | $536 |
Medicare Levy Thresholds Lifted: Lower-income earners benefit from lifted thresholds, offering relief and financial flexibility.
Energy Bill Relief: Extended rebates provide households with financial breathing space, translating into potentially higher discretionary spending.
Healthcare Improvements: The allocation towards healthcare enhancements signifies opportunities for businesses in the healthcare sector, including pharmaceuticals and urgent care services.
Childcare & Education Initiatives: A Scope for Community Engagement and Service Expansion
Subsidised Childcare Guarantee: The guarantee of three-day subsidised childcare opens avenues for small businesses seeking to support working parents and enhance employee welfare.
HELP Debt Reduction: The proposed cut in HELP debt and fairer repayment thresholds may attract skilled talent and foster a conducive educational environment benefitting business operations.
Navigating the Business Terrain: Asset Write-Offs, Employment Contracts, and Compliance
Instant Asset Write-Off: The proposed increase in the instant asset write-off allowance presents small businesses with technological upgrades and operational efficiency opportunities.
Employment Contracts: The ban on non-compete clauses requires business owners to review and align employment contracts to ensure compliance with the new regulations.
ATO Compliance Expansion: The emphasis on increased scrutiny of tax compliance highlights the importance of maintaining accurate financial records and adhering to regulatory standards.
Hospitality Support: Frozen beer excise and extended support for small wine and alcohol producers offer relief to businesses in the hospitality and alcohol production sectors.
If you have any questions as you review and navigate the changes, please book an online meeting to chat. We are here to help you understand how the Budget may impact your business.
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