The Australian Labor Party has declared victory in the 2025 Federal Election, establishing a second term in majority government.
There were many potential tax changes outlined on the campaign trail, as well as the 2025-26 Federal Budget handed down in March. Optima Partners outlines the tax policies to expect in the coming years.
Instant asset write-off
The returning Labor government has committed to a 12-month extension on the instant asset write-off, to June 30 2025. In its current form, the instant asset write-off allows eligible businesses to claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, up to $20,000.
Instant work expense deduction
The Government will introduce a new instant work expense tax deduction from the 2026-2027 financial year. This will allow taxpayers to claim an immediate $1000 deduction for work-related expenses without the need for receipts or records.
Introduced as a cost-of-living measure, this reform will benefit roughly 5.7 million taxpayers who currently claim less than $1000 on their tax return.
15% tax on super balances over $3m
While the Division 296 measure failed to pass during the final Parliament sitting before the 2025 Federal Election, the returning Labor Government has signaled intentions to push on with the Bill. In its current form, this measure would see a 15% tax incurred on superannuation balances over $3 million.
Income tax cuts
In the Federal Budget the Government outlined income tax cuts for the lowest bracket. From July 1, 2026, the tax rate for those earning between $18,201 and $45,000 will decrease from 16% to 15%. This will decrease again to 14% from July 1, 2027.
