Treasurer Jim Chalmers delivered the 2025-2026 Australian Federal Budget on 25 March 2025, outlining measures aimed at stimulating economic growth, supporting businesses, and addressing cost-of-living pressures.
Despite global volatility, the government remains confident in Australia’s position. “It’s clear the rules that underpinned global economic engagement for more than 40 years are being rewritten. Our economic plan is about ensuring Australians are beneficiaries, not victims, of this churn and change,” said the Prime Minister and Treasurer in their press release.
However, aside from a surprise individual tax cut, the budget delivered limited new support for small businesses. Finance experts and business leaders have provided a range of perspectives on its impact on business owners. While some commend certain initiatives, others express concerns about the budget’s effectiveness and long-term vision.
With some targeted measures remaining – including energy bill relief and ‘Buy Australian’ campaigns – the broader SME community may feel underwhelmed, especially amidst ongoing global uncertainty.
2025–2026 federal budget: Key initiatives for business
The Albanese Government positioned the 2025 federal budget as a long-term investment in economic strength and resilience. The commitments to business and industry include:
- $3 billion to support green metals production
- $2 billion expansion of the Clean Energy Finance Corporation (expected to unlock $6 billion in private investment)
- $20 million for the Buy Australian campaign
- Energy rebates for around one million small businesses
- $7.1 million to strengthen franchising code enforcement
- $165 million in tax relief for hospitality and alcohol producers
- $17.1 billion in infrastructure for roads and rail
- Up to $3 billion to expand the National Broadband Network
The budget also outlines reforms to improve productivity and cut red tape for businesses and workers:
- Banning non-compete clauses for low- and middle-income earners
- $207 million to improve Australia’s business register system
- Collaboration with states to streamline trade licensing, commercial planning, and construction approvals, supported by a $900 million National Productivity Fund
Energy bill rebates: How do they help small businesses?
As part of the budget, Treasurer Chalmers announced that energy bill rebates of $75 per quarter would continue for eligible Australian households and small businesses until 31 December 2025. This initiative is designed to ease the financial burden of rising energy costs, offering small businesses crucial relief. By reducing energy expenses, it helps businesses maintain cash flow, invest in growth, and sustain profitability. The rebate program aims to support small businesses during challenging economic conditions, ensuring they can focus on operations and expansion without the added strain of escalating energy bills.
Whilst the Clean Energy Council has welcomed the rebate as a necessary short-term relief measure, some experts caution that these rebates only provide immediate assistance, and do not address underlying structural issues in the energy market.
Instant asset write-off slashed: A budget shock for SMEs
One of the biggest surprises in the federal budget for small businesses was that the $20,000 instant asset write-off – a vital tax planning tool for SMEs – will lapse on 30 June 2025. Unless new legislation is introduced, the threshold will fall back to just $1,000.
This change could pose challenges for businesses planning equipment upgrades or expansion, especially in terms of timing and cash flow. “The policy’s future is in serious doubt… the instant asset write-off is now a hotly debated issue heading into the federal election,” said David Adams from SmartCompany.
This move could discourage investment in the second half of FY25 and beyond, or see more businesses turn to alternative finance options as they look to grow their businesses. Working capital finance, such as debtor finance and trade finance, can support affected businesses by providing liquidity for equipment upgrades, reducing cash flow pressure, ensuring operational continuity, and supporting growth.
‘Future Made in Australia’: Government commits to expanding initiative
While the budget provides limited broad-based support for small businesses, the government has reaffirmed its commitment to the ‘Future Made in Australia’ agenda, which aims to strengthen key sectors such as advanced manufacturing, clean energy, logistics, and local production.
This strategy builds on the existing $22.7 billion investment and focuses on ensuring Australians benefit from the global shift to cleaner, cheaper energy. As part of this agenda, the government has committed $20 million to expand the Buy Australian campaign, encouraging consumers to choose locally made products. Additionally, it will apply the Environmentally Sustainable Procurement Policy to $4.5 billion in public sector purchasing, driving innovation in sustainable goods and services.
The government is also prioritising trade diversification, with $16 million allocated to the new Australia–India Trade and Investment Accelerator Fund. This initiative aims to open new commercial opportunities for Australian firms in India, supporting broader economic engagement in the region.
What’s next? The year ahead for small businesses
While the 2025 Federal Budget presents an optimistic outlook and includes measures like energy rebates and tax cuts, many experts believe it lacks substantial, long-term reforms needed to drive economic growth and competitiveness. Calls for more targeted support, particularly for small businesses and the tech sector, highlight concerns that the budget may not fully address current economic challenges.
While the government’s ‘Future Made in Australia’ agenda provides a clear direction, many businesses may still be looking for more immediate, practical support. Rather than waiting for policy to catch up, business owners will need to stay focused on what’s within their control.
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Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
