Australia’s 2025 Federal Budget announced
Treasurer Jim Chalmers delivered the 2025–2026 Australian Federal Budget on 25 March, prioritising economic stability, tax compliance, business growth, industry support and international trade and visa policies.
By Ro Elvinia
A key focus of the budget is keeping Australia attractive to foreign investors by maintaining stable regulations and economic policies. Chalmers noted that Australia’s economy is on track for steady growth, with GDP expected to rise from 1.5% in 2024–2025 to 2.25% in 2025–2026. Inflation is projected to ease to 3%, while the unemployment rate is forecast to remain at 4.25%.
For businesses, tax compliance will be a major priority. The government is increasing audits, especially on transfer pricing and cash transactions, and introducing tougher penalties for late tax lodgements and unpaid debts. To support these efforts, $999 million has been allocated to the Australian Taxation Office (ATO), with $717.8 million targeting multinational tax avoidance and $155.5 million focused on small businesses under-reporting income.
Small businesses will also see some relief. The government is investing $12 million to tighten franchising laws and combat illegal business practices, such as “phoenixing.” To ease financial pressure, small businesses will receive a $150 energy rebate, and payment processing times will be shortened to improve cash flow.
Several industries are set to benefit from significant funding. The budget allocates $5 billion to green manufacturing, particularly aluminium and iron production. Transport infrastructure will receive a $17.1 billion boost, while $61.7 million is earmarked for advancing Australia’s defence submarine programme. The hospitality sector will also see some relief, saving $165 million through excise tax cuts.
New regulations will also reshape the property market. Starting in April 2025, non-residents will be banned from purchasing established homes for two years, encouraging foreign investment in other areas. Meanwhile, tariffs on goods from Russia and Belarus will remain in place, affecting trade relations.
Workplace laws are also set to change. From 2027, non-compete clauses will be banned for employees earning under $175,000, making job transitions easier. In addition, updates to the Permanent Migration Programme and the Temporary Skills Shortage Visa could impact hiring strategies for businesses.
ABN Australia’s Managing Director closely followed the announcements and said, “While industry-specific announcements may create new opportunities for international businesses, there is also heightened scrutiny from the tax office on compliance matters, particularly in connection with cross-border transactions and transfer pricing. I urge them to take their tax compliance matters seriously in Australia as they plan for the future.”
Published: 01st April 2025 | Last updated: 01st April 2025