With the Labor Party now holding a majority in the House of Representatives, let’s take a closer look at their key campaign promises and some unfinished business from their last term.
Individuals
- The 2025–26 federal budget introduces modest income tax cuts for all taxpayers from 1 July 2026, with another cut from 1 July 2027.
- The tax rate for the $18,201–$45,000 tax bracket will drop from 16% to 15% from 1 July 2026, then to 14% from 2027–28.
- The maximum annual saving will be $268 in 2026–27 and $536 in 2027–28.
- Legislation for these tax cuts passed Parliament on 26 March 2025.
$1,000 instant work-related expenses deduction
- Taxpayers earning labour income can claim a $1,000 shortcut deduction for work-related expenses on their tax return.
- If taxpayers’ actual claims are higher than $1,000, they can claim the higher amount using the usual process.
- The shortcut deduction is only available to those with labour income—not business or investment income.
- Taxpayers can also claim other non-work-related deductions on top of this.
Energy rebate extension
- From 1 July 2025, households and small businesses will receive a further $150 energy rebate, paid automatically on electricity bills in quarterly instalments until the end of 2025.
Cheaper home batteries
- From 1 July 2025, households can buy a typical home battery with a 30% discount on installed costs, saving around $4,000.
- This is part of the Small-Scale Renewable Energy Scheme.
5% deposit scheme for first home buyers
- The Government will underwrite eligible first home buyers, allowing them to buy a home with a 5% deposit and no need for Lenders Mortgage Insurance.
- The scheme has been expanded with higher property price limits and no caps on places or income.
- It’s open to Australian citizens or permanent residents who haven’t owned property in Australia in the last 10 years and who will live in the home.
Superannuation
Division 296 tax on super balances over $3 million
- Legislation lapsed when Parliament dissolved, but the Government may reintroduce it with the support of The Greens.
- Greens Senator Nick McKim has previously called for lowering the threshold to $2 million and adding a ban on super funds borrowing to finance investments.
- If passed, the tax would apply from 1 July 2025 at a 30% rate on earnings for balances over $3 million. It would include both realised and unrealised gains and allow losses to offset future gains.
Small Business
Instant asset write-off extension
- Parliament passed an extension of the $20,000 instant asset write-off threshold for the 2024–25 year.
- The Government has committed to extending this threshold until 30 June 2026.
National small business strategy
- A new national small business strategy is now open for consultation, focusing on reducing red tape and improving government processes for small businesses.
Energy
Green Aluminium Production Credit
- The Government has committed $2 billion to support aluminium smelters transitioning to renewable electricity before 2036.
- Aluminium is the second most-used metal globally and accounts for about 10% of Australia’s electricity demand—Tomago Aluminium in NSW is the largest single electricity user in the country.
- Smelters will be able to negotiate a credit per tonne of green aluminium produced for up to 10 years.
- Final credit rates will depend on individual facility circumstances and emissions reductions (Scope 2 emissions).
If you have any questions regarding the above information, please do not hesitate to contact our office to speak to one of our team.
