Federal budget 2025: what’s in it for small business?
More opportunities to deliver products and services to federal government agencies and less red tape for tradies are two of the big pluses for small businesses from the 2025 federal budget. The federal government has also outlined a strategic framework to foster Australia's digital asset industry.
The federal government announced a deficit of $27.6 billion this financial year, growing to a deficit of $42.1 billion next year. Structurally higher spending means more budget deficits are expected in the medium term.
An additional surprise small tax cut was announced, in addition to tax relief for hospitality venues, brewers, distillers and wine producers.
“Our economy is turning the corner. Inflation is down, incomes are rising, unemployment is low, interest rates are coming down, debt is down and growth is picking up momentum,” federal treasurer, Jim Chalmers, said in his 2025 budget speech.
Chalmers acknowledged the volatile economic environment, including global trade disruptions and slowing Chinese growth, have the potential to impact economic conditions in the year ahead.
The federal government expects growth to rise from 1.5 per cent this financial year to 2.5 per cent in the 2026/27 financial year, with private demand to double.
Fairer trading conditions for small business
To support revenues in the small business sector and to help smaller entities square off against US tariffs, the federal government is formalising rules around what constitutes an Australian business. This includes more than 50 per cent Australian ownership, Australian tax residency and a principal place of business in Australia.
These updated guidelines align with the Buy Australia Plan under the Future Made in Australia agenda. They mandate Commonwealth government departments consider broader economic benefits like job creation and regional development in tender evaluations.
This initiative raises the target the Commonwealth government needs to reach for procuring from small business to 25 per cent for contracts of up to $1 billion and to 40 per cent for contracts below $20 million. Small businesses must also be better included in government tenders.
Tradies become more mobile
The federal government is putting together a national licensing scheme for electrical tradespeople through the National Competition Policy (NCP) framework.
The licensing scheme saves tradies’ time and money and makes it easy for them to work across different states and territories and have their qualifications and certifications recognised.
This reform addresses housing affordability by easing labour shortages holding back new home construction by making it easier for skilled workers to move around the country.
Productivity Commission modelling shows streamlining licensing across a range of industries could increase economic output by up to $10.3 billion.
Digital asset regulations in focus
As part of this year’s budget announcements, the federal government outlined a framework to foster Australia's digital asset industry. The framework sets out a regulatory strategy for digital asset platforms (DAPs) and includes stablecoins in payment licensing reforms.
There are plans to review the digital asset regulatory sandbox to boost innovation and explore how digital assets could be used in financial markets and the broader economy.
Steadfast brokers are here for small businesses through all budget and economic cycles. If you’d like to review your current policies or discuss your requirements for the year ahead, contact your Steadfast broker today.
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