The Labor Party made a raft of promises in the run-up to this month’s Federal election. Here’s a look at some of the changes it has proposed that could have ramifications for your business over the next three years.
Tax
One that could directly affect your bottom line and improve your cash flow is the extension of the instant asset write-off for another year. This means you can immediately deduct the full cost of eligible assets costing less than $20,000 first used or installed for use by 30 June 2026, rather than depreciating them over time.
The $20,000 threshold applies per asset so you can claim multiple purchases, including for new tools for tradies, computers and tablets, office equipment and kitchen equipment and coffee machines for cafes.
The workplace
On the labour front, the returned government intends to legislate to protect penalty rates in awards to ensure wages don’t go backwards. The move is aimed at thwarting applications made by several employer groups to reduce the entitlements for some workers in exchange for higher pay.
Labor also plans to ban non-compete clauses for workers earning less than $175,000 a year to make it easier for them to change jobs and to stop the misuse of these clauses.
In addition, the party has vowed to close loopholes in competition law that allow anti‑competitive arrangements that cap workers’ pay and conditions, without the knowledge and agreement of affected workers. “No‑poach” agreements which block staff from being hired by competitors will also be stamped out.
Making it easier to do business
Labor has pledged $207 million over two years from 2025/26 to continue the stabilisation of Australia’s business registers and undertake targeted uplifts, including linking Director Identification Numbers to the Company Register.
Also on its agenda are plans to extend Unfair Trading Practices protections to small businesses and strengthen the enforcement of codes of conduct in the food, grocery and franchising sectors.
In addition, the Labor government will provide extra funding to the Australian Competition and Consumer Commission to ensure a more transparent and effective regulatory framework for the franchising sector.
Nationally, the returned Labor government says it will cut red tape by working with the states and territories on national licensing for electrical trades and developing a national screening check for workers in the care sector. It will also collaborate on streamlining commercial planning and zoning and removing barriers that inhibit the take-up of modern construction methods.
To support the hospitality sector, it will pause indexation on draught beer excise and provide tax relief to brewers, distillers and wine producers.
Australia Made
The Labor government has also announced a $20 million campaign to encourage more Australians to buy locally made products.
This campaign will take place in stores, online and across media around Australia. It will also support more local manufacturers and producers in getting Australian Made certification. It will also work on improving the online Made in Australia directory, making it easier to search for and find Australian products.
Stamping out bad behaviour
The government is also taking action to detect and prosecute illegal phoenixing and other shadow economy activity.
Firstly, it is providing $3 million to improve the Australian Securities and Investments Commission’s ability to identify and act against those involved in illegal phoenixing in more susceptible sectors and particularly the construction industry.
The returning government is also providing $155.5 million to extend and expand the Australian Taxation Office’s Shadow Economy Compliance Program, enabling it to reduce shadow economy behaviour such as worker exploitation and under-reporting of taxable income that enables non-compliant businesses to undercut those doing the right thing.
Summary
Labor’s second term brings a wide range of proposed reforms that could influence how SMEs operate over the next three years. While some policies aim to ease the cost of doing business and streamline compliance, others signal tighter regulation and increased oversight. Now is the time to review how these changes may affect your business planning, workforce, and growth strategy.