On Tuesday, 25 March 2025, Treasurer Jim Chalmers delivered the highly anticipated 2025–2026 Federal Budget, outlining the government’s plan for the economy in an era of global uncertainty.
The 2025-2026 Federal Budget has introduced several key measures that will impact Australian individuals and businesses, providing both opportunities and challenges. From energy bill relief to changes in employment policies, here’s what businesses need to know.
The Budget’s major priorities include:
✅ Cost-of-living relief for households and businesses
✅ Tax Cuts for Individuals
✅ Strengthening Medicare & Healthcare Accessibility
✅ Investing in education at all levels
✅ Infrastructure Development
✅ Support for Green Industries
✅ Boosting economic competitiveness and productivity
For business owners and decision-makers, understanding these changes is crucial for strategic planning. In this blog, we break down the key budget announcements and what they mean for Australian businesses – helping you stay ahead and make informed financial decisions. For a more in-depth expert analysis of these initiatives, talk to our team.
Key Implications for Australian Businesses
Energy Bill Relief for Small Businesses
Rising energy costs have been a concern for many businesses, and the government has responded with additional rebates. Approximately one million small businesses will receive an extra $150 in energy bill relief, spread across two quarterly instalments from 1 July 2025. This initiative aims to ease financial pressure on small businesses struggling with operational costs.
Broader Tax Cuts for Australian Taxpayers
Every Australian earning over $18,200 will benefit from new tax cuts. For an average worker earning $79,000 annually, this translates to an extra $5.15 per week, increasing to $10.30 by 2027-28.
From July 1, 2026, the government will lower the tax rate for earnings between $18,201 and $45,000. The current 16% rate will drop to 15%, followed by another reduction to 14% the following year. When combined with the first round of tax cuts, the government estimates that an average earner will receive $1,922 in savings by 2026-27 and $2,190 by 2027-28.
These reductions could lead to increased disposable income, driving consumer spending and positively impacting businesses across various industries.
Tax Cuts and Their Impact on Consumer Spending
While the budget primarily focuses on personal income tax cuts, businesses stand to benefit indirectly. Workers earning an average income will receive a $536 annual tax cut starting in 2027-28, which could lead to increased consumer spending. Businesses in retail, hospitality, and other consumer-driven sectors may see a rise in sales as disposable income grows.
Changes to Non-Compete Clauses
A major shake-up is on the way for employment contracts. The government is proposing the abolition of non-compete clauses for most workers. While this change is designed to enhance workforce mobility and innovation, businesses may need to rethink their employee retention strategies and focus more on incentives to maintain key talent.
Support for Digital and Cyber Security
Since the 2023–24 Budget, the government has allocated more than $60 million to enhance the digital and cyber security capabilities of small businesses through various initiatives, including:
- Digital Solutions Program – Helping small businesses leverage digital tools and expand their online presence.
- Cyber Wardens Program – Providing essential training to improve cyber resilience.
- Small Business Cyber Resilience Service – Assisting businesses in strengthening their digital defences.
- Cyber Health Check – Offering assessments to help businesses identify and mitigate cyber risks.
These initiatives aim to support small businesses in embracing digital opportunities while ensuring they are prepared to prevent and recover from cyber threats.
Supporting Australian Businesses
The government is committing $20 million to the Buy Australian Campaign, encouraging consumers to support local producers by purchasing Australian-made products.
Additionally, the government has exceeded its goal of awarding 35% of contracts (by value) to small- and medium-sized enterprises (SMEs) for contracts worth up to $20 million. This achievement, driven by initiatives like the Buy Australian Plan, ensures SMEs gain better access to government procurement opportunities.
Further, to drive industry investment in sustainable goods and services, the government is extending the Environmentally Sustainable Procurement Policy to cover an additional $4.5 billion of public procurement.
The budget also advances trade diversification efforts, allocating $16 million to the new Australia–India Trade and Investment Accelerator Fund, designed to enhance trade opportunities between the two nations.
Levelling the Playing Field
The government is taking steps to ensure fairer business practices by strengthening protections for small businesses against unfair trading.
- The government will collaborate with states and territories to extend Unfair Trading Practices protections to small businesses.
- $7.1 million will be allocated over two years to enhance the Australian Competition and Consumer Commission’s (ACCC) enforcement of the Franchising Code.
- Additional protections from Unfair Contract Terms and Unfair Trading Practices will be extended to businesses governed by the Franchising Code, subject to consultation.
These measures aim to create a more balanced and competitive marketplace for small businesses operating under franchise agreements.
Boost for Apprenticeships in Housing Construction
To address skill shortages, the government is introducing stronger incentives for apprentices in the housing construction industry. Eligible apprentices can receive up to $10,000 in support, while employers hiring in priority trades will be eligible for up to $5,000 under a new Priority Hiring Incentive scheme. This move is expected to drive growth in the construction sector, benefiting businesses directly involved in housing projects.
Investment in Infrastructure and Green Metals
The budget commits over $120 billion to infrastructure projects over the next decade. This includes funding for roads, rail, and the continued rollout of the National Broadband Network (NBN). Businesses operating in construction, logistics, and technology will likely see opportunities arising from these developments.
Additionally, the government is ramping up support for green metals production. This investment is part of a broader strategy to promote sustainable industries, which may create new opportunities for businesses involved in clean energy and environmentally friendly manufacturing.
The Government has legislated $13.7 billion in hydrogen and critical minerals production tax incentives and has allocated $1.5 billion in support for priority areas through the Future Made in Australia Innovation Fund, including:
- $750 million for green metals
- $500 million for clean energy technology manufacturing capabilities
- $250 million for low carbon liquid fuels.
No Extension for the Instant Asset Write-Off Scheme
One notable omission from the budget is the extension of the instant asset write-off scheme. Many businesses had hoped for its continuation, as it provided significant tax relief and encouraged investment in new equipment. The lack of extension means businesses will need to reassess their capital expenditure plans moving forward.
To check the full Federal Budget 2025-26 announcement, visit Budget.gov.au.
Understanding the Implications: What’s Next for Businesses?
Broadley, there was very little in the 2025-2026 Federal Budget for Australian businesses. While it provides a mix of benefits and challenges, there are key initiatives such as energy bill relief and infrastructure investment that offer immediate support. However, changes to employment regulations and the absence of an extension to the asset write-off scheme will require businesses to adapt moving forward.
To make the most of these changes, businesses should assess how the budget impacts their industry and explore strategies to leverage new incentives while mitigating potential risks.
These key implications are just some of the many initiatives announced in the 2025-2026 Federal Budget. Making sense of all of the new initiatives and understanding their impact on your business can be challenging, however, it isn't something that you need to do alone.
Azure Group can provide you with a comprehensive breakdown of the Federal Budget. We have helped our clients successfully navigate major changes from previous budgets with strong financial planning and advisory services. If you have any questions or queries about the 2025-2026 Federal Budget, please feel free to contact us today.
Have you Have you noticed our #FridayExpertTips... here's one that relates to Financial Planning
"Setting goals for the next financial year is proven way to help businesses succeed. Don't leave it to late. Now that the Federal Budget has been announced, it is time to set your budgets and KPI's for the coming year."
This article is intended to provide general information only, and is not to be regarded as legal or financial advice. The content is based on current facts, circumstances, and assumptions, and its accuracy may be affected by changes in laws, regulations, or market conditions. Accordingly, neither Azure Group Pty Ltd nor any member or employee of Azure Group or associated entities, undertakes responsibility arising in any way whatsoever to any persons in respect of this alert or any error or omissions herein, arising through negligence or otherwise howsoever caused. Readers are advised to consult with qualified professionals for advice specific to their situation before taking any action.
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