Key Highlights for Small to Medium Businesses in the 2025 Australian Federal Budget

$999 Million in ATO Funding to Strengthen the Tax System

The government is allocating $999 million over four years to enhance the Australian Taxation Office’s (ATO) compliance and enforcement efforts. This funding will extend and expand existing programs, including the Tax Avoidance Taskforce, which focuses on large taxpayers, as well as initiatives targeting the shadow economy and tax non-compliance. Additionally, efforts will be ramped up to ensure timely payment of tax and superannuation liabilities by medium and large businesses and wealthy individuals.

As a result, there will be an increase in audit and compliance activities across all taxpayer categories, with greater scrutiny on tax lodgements.

Energy Bill Relief for Small Businesses

The government is extending the cost-of-living support measure introduced in the previous budget by an additional six months, running until December 2025.
Eligible small businesses and households will receive an automatic $150 rebate on their energy bills for the September and December 2025 quarters. No action is needed—electricity providers will apply the rebate automatically.

Additional Support for Alcohol Producers

The budget includes $165 million in support for brewers, distillers, and wine producers.
Draught beer excise increases will be paused for two years starting in August 2025, with biannual indexation resuming from August 2027. The Excise Remission Scheme cap for alcohol manufacturers and the Wine Equalisation Tax Producer Rebate will both increase from $350,000 to $400,000 from 1 July 2026.

No Further Extension of the $20,000 Instant Asset Write-Off

Last year’s budget extended the $20,000 instant asset write-off for small businesses until 30 June 2025, but this measure is still awaiting legislation.
The government has not announced a further extension for 2025-26, meaning that unless additional changes are made, the instant asset write-off will revert to $1,000 from 1 July 2025.

Increased ASIC Funding for Business Oversight

To strengthen corporate regulation, the government is providing $207.8 million over four years (from 2025-26) to enhance ASIC’s business registers and reform financial reporting governance.
ASIC will use this funding to link Director Identification Numbers with company registers, improving detection of illegal phoenix activity and corporate misconduct.

$12 Million for Small Business & Franchisee Protections

The government is allocating $12 million over four years to improve regulation and oversight in several areas:

• Franchising Code of Conduct enforcement
• Enhanced detection of phoenixing activities
• Support for social enterprises focused on employment opportunities for disadvantaged Australians
• Exploration of extending protections against unfair trading practices to small businesses

Banning of Non-Compete Clauses for Certain Workers

As part of broader competition reforms, the government plans to ban non-compete clauses for workers earning below the Fair Work Act’s high-income threshold (currently $175,000).

Businesses will no longer be able to restrict employees from working for competitors after leaving their jobs. The government will also close legal loopholes that allow businesses to cap workers’ wages and conditions without their consent or use ‘no-poach’ agreements to prevent hiring by competitors.

A consultation process will be conducted to determine exemptions, penalties, and transition arrangements. Further discussions will also explore potential restrictions on non-solicitation clauses and non-compete agreements for high-income earners.