The ALP has been re-elected to form a government with majority, after winning the 2025 Federal election.
During the election campaign several tax changes were proposed by the ALP, that may come into come into effect in their next term.
We have briefly analysed these measures below for you, explaining how they may apply to you or your business (post enactment).
Tax cuts
The marginal tax rate for the personal income tax threshold bracket from $18,201 to $45,000 will be reduced from 16% to 15% from 1 July 2026, and further reduced to 14% from 1 July 2027. These tax cuts, now legislated, will save about $10 a week for the average earner once both cuts have flowed through.
Instant tax deduction
A $1,000 instant tax deduction for work-related expenses from 2026–27 income year has been proposed by the ALP, this measure will allow taxpayers who earn labour income to choose to claim the $1,000 instant tax deduction instead of claiming individual work-related expenses. Those who choose to do so will not need to collect receipts for deductions less than $1,000.
Extend $20,000 instant asset write-off
As announced in the 2025 Federal budget, the increased instant asset write off is also proposed to be extended.
This measure will allow small businesses that choose to deduct depreciating assets under the simplified depreciation rules (Subdiv 328-D of ITAA 1997) to continue to deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2026. The threshold applies per asset, which means small businesses can claim multiple purchases.
Reduced student loan debts and repayments
As announced in the 2025 Federal budget, from 1 July 2025, the government will implement a 20% reduction on all student loan debts, including HELP, VET Student Loans, and Australian Apprenticeship Support Loans.
The ALP formed government also plans to increase the minimum repayment threshold from $51,500 to $67,000 in from the 2025-26 income year.
Increased Medicare-levy thresholds
Also announced in the 2025 Federal budget, the Medicare levy low-income thresholds for singles, families, and seniors and pensioners will be increased from 1 July 2024.
Other measures
The power bill rebate extension will also come into effect from 1 July 2025, $150 in energy bill rebates will again be automatically applied until 31 December 2025 i.e. $75 per quarter.The existing Home Guarantee Scheme will also be extended to include all first home buyers, allowing them to purchase a property with a minimum deposit of 5%, the current eligibility criteria will be scrapped.
Contact us
Please don’t hesitate to contact our office and we will be pleased to guide you through any queries that you may have in relation to these proposed measures.