Key takeaways for individuals & small businesses
Following the May 3, 2025 federal election, the Albanese Labour Government has introduced a range of tax reforms that will take effect from 1 July 2025, with further changes from 2026 and 2027. These adjustments touch on income tax, superannuation, concessions for small businesses, and instant deductions. Here’s what you need to know, and how to prepare.
Income Tax Changes: Impact on Individuals
Stage 3 tax cuts have been restructured. Starting 1 July 2024, the lowest tax bracket (income between $18,201 and $45,000) was reduced from 19% to 16%. Labour’s recently passed legislation lowers this rate further to 15% in July 2026, and 14% in July 2027, translating to up to $536 in annual savings for individuals in this bracket.
Despite changes, the higher tax brackets remain largely intact, preserving benefits from the prior stage three cuts for middle earners.
Superannuation Reform: New Taxes on High Balances
Labor’s proposed reform targets super balances above $3 million, introducing an additional 15% tax on earnings, including unrealised capital gains. Originally affecting just a few thousand individuals, this measure is expected to impact up to 80,000 Australians by July 2025, with projections rising over the years.
Critics are concerned about fairness and practicality, particularly around the treatment of illiquid assets. Labor defends the move as necessary for equity in the tax system.
Small Business Tax & Instant Deductions
The instant asset write-off for small businesses has been extended through 30 June 2026. Eligible businesses can still claim an immediate deduction for assets costing under $20,000, with the cap unchanged.
From the 2026‑27 financial year, a new $1,000 standard deduction for individual work‑related expenses will apply, with no receipts required, for around 5.7 million taxpayers earning labour income.
Additional Reforms & Proposals to Monitor
Labour is reviewing corporate tax, with proposals from the Productivity Commission recommending a 5% cash‑flow tax and reduced rates for businesses earning under $1 billion. Small businesses could see effective tax rates drop from 25% to 20%.
Capital gains tax and negative gearing reforms have not been prioritised in Labour’s current agenda, but may re-emerge in future fiscal negotiations.
How to Prepare for Your Next Tax Return
| What to Check | Why It Matters | Action Steps |
| Your taxable income and bracket | Bracket rates may drop in 2026–27 | Use forecast tools or consult your accountant |
| Submission of super contributions | To avoid being caught by the new super tax | Review your super balance if it’s near $3M |
| Planned asset purchases | To maximize immediate deductions | Confirm eligibility and purchase timeline |
| Work‑related expense claims | To leverage the upcoming $1,000 standard deduction | Keep records updated or use simplified claims |
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These reforms unfold over the coming years. If you’re filing a return soon or managing a business, expert advice could ensure you’re optimizing your tax position.
