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As the new Labor government settles in, a wave of tax, superannuation, and energy reforms are on the horizon. From modest income tax cuts and small business incentives to new rules for not-for-profits and ATO crackdowns on dodgy deductions, here’s what’s shaping Australia’s financial landscape this winter — and what it means for you.
Tax and Budget Highlights for Individuals
Modest tax cuts: From 1 July 2026, the 16% tax rate on income between $18,201 and $45,000 will drop to 15%, and then to 14% in 2027–28.
$1,000 instant deduction: Wage earners can claim a flat $1,000 work-related expense deduction on their 2025–26 tax return — no receipts required. Those with higher legitimate expenses can still claim the actual amount.
Energy bill rebate: A further $150 rebate will automatically apply to household and small business electricity bills from July 2025.
First home buyers: Labor has promised a 5% deposit scheme with no income caps and higher property price limits, helping more Australians enter the housing market.
Home batteries: Households can access a 30% discount (up to $4,000) on installed home battery systems under the expanded renewable energy scheme.
Superannuation & Business Policy
The proposed 30% super tax on balances above $3 million (Division 296) lapsed before the election, leaving uncertainty around whether it will return in the new Parliament.
For small businesses, the $20,000 instant asset write-off has been extended to 30 June 2026, providing continued incentive to invest in equipment and technology.
The Government has also launched a National Small Business Strategy to simplify cross-government compliance and reduce red tape for small operators
ATO Warning: The Claims That Didn’t Make the Cut
As tax time approaches, the ATO is cracking down on dodgy deductions — including some that didn’t quite pass the “pub test.”
Recent rejected claims included:
An air fryer, TV, and gaming console listed as “tools of trade”
Swimwear for a truck driver
Designer clothing for “work events”
The message is clear: expenses must be directly related to earning income and backed up with records. If in doubt, check before you claim
New Reporting for Not-for-Profits
From the 2023–24 financial year, all non-charitable NFPs with an ABN must lodge an annual self-review return to maintain their tax-exempt status.
By 30 June 2025, governing documents must include mandatory clauses prohibiting the distribution of income or assets to members, including upon winding up. Without these, the NFP could lose its tax-exempt status and become taxable
The Global Picture: Economic Crossroads
Globally, the US economy has shown early signs of contraction, China is stimulating growth with new liquidity injections, and Australia remains steady — albeit sluggish.
Locally, the RBA’s rate cuts are supporting mild growth, but market volatility and tariff tensions continue to shape the economic outlook
Need help navigating the EOFY changes?
If you want to understand how these policy shifts or ATO updates affect you, your business, or your super, talk to the Strategic 360 team today.
Find all the details from our Newsletter here.
Kerrily and Louise – Directors
