The 2025 Australian federal election has ushered in a fresh wave of policy directions that business owners, high-net-worth families, and their advisers need to understand. While the election did not deliver sweeping tax overhauls, it confirmed a range of targeted measures likely to impact corporate strategies, personal wealth management, and the broader advisory landscape. In an environment of economic uncertainty and rising costs, understanding these changes is critical for informed decision-making. Below we break down the most relevant developments in key areas and what they mean for businesses and advisers moving forward.
Tax Reform
Despite much political discourse, broad tax reform remains more of a long-term discussion than an immediate reality. Neither major party campaigned on radical tax system changes, and the election outcome reflects a continued focus on incremental adjustments rather than wholesale reform. For instance, the previously legislated Stage 3 income tax cuts (effected from July 2024), have been enacted to simplify the marginal tax brackets and reduce rates for middle and high-income earners. Business owners and investors earning in higher brackets should see relief as the 32.5% marginal rate is eliminated and a 30% rate applies on incomes from $45,001 to $135,000. The 37% tax bracket (previously $90,001 – $180,000 ) has also been amended for incomes from $135,001 to $190,000. This change will ease bracket creep for many professionals and entrepreneurs, increasing post-tax cash flow and potentially influencing how profits are taken from companies or trusts.
It’s worth noting that comprehensive tax reform – tackling areas like GST, state taxes, or the complexity of the system – was largely absent from the election debate. A significant backlog of previously announced but unenacted tax measures still looms in the background, awaiting clarity on whether they will be pursued or left on the shelf. For advisers, this means the overall tax landscape remains relatively stable in the short term, but staying alert to future reform discussions is wise. In practice, the current environment gives an opportunity to plan under known rules: for example, reconsidering remuneration strategies (salary vs. dividends) in light of the new personal tax rates, and taking advantage of any existing tax concessions while they last.
It’s also notable what won’t be happening as a result of this election. The opposition had floated several tax incentives targeted at businesses – such as a $1,000 instant deduction for work-related expenses, special low tax rates for start-up companies, and an increase of the instant asset write-off threshold to $30,000 – but these proposals will not proceed under the returned government. Business owners should therefore base their planning on the current law and confirmed changes, rather than on campaign promises that won’t become law. The emphasis for now is on utilising the relief from already-scheduled tax cuts and ensuring compliance with existing obligations, while keeping an eye out for any renewed push towards meaningful tax reform in the coming parliamentary term.
Superannuation
Superannuation emerged as a key topic this election, particularly for wealthy individuals. The re-elected government is moving ahead with its plan to increase taxes on extremely large super balances – a change that will affect only a small minority of superannuation members but is important to note in the advisory community.
Although the reform is not yet law as at May 2025, the proposed legislation will take effect from 1 July 2025. If legislated, earnings on individual super fund balances above $3 million will attract a higher tax rate (effectively 30%, up from the standard 15% in accumulation phase). In practical terms, this means about 80,000 Australians will see an increase in tax on the portion of earnings attributable to their balances beyond $3 million. For those affected – often high-net-worth individuals and family business owners with significant retirement savings – this measure will modestly reduce the tax advantages of keeping large sums in super. It also sets a precedent that the government is willing to adjust superannuation tax concessions to improve budget balances, a point not lost on wealth advisers.
For the vast majority of Australians, superannuation settings remain unchanged and continue to provide generous tax benefits. Contribution caps, tax-free retirement income up to the transfer balance cap, and other fundamental features of the system were not contested in this election, so they remain in place. In fact, super will remain one of the most tax-effective investment structures for most people. That said, those who are approaching the $3 million balance mark (or already beyond it) should review their retirement strategies. Advisers may counsel impacted clients on strategies such as redistributing assets (for example, using withdrawals above the cap to invest in other vehicles or to re-invest in a spouse’s super if that spouse’s balance is lower) or simply acknowledging the slightly higher tax as a trade-off for keeping funds in a protected, compounding environment. It’s a good time to revisit projections for high-balance SMSFs and determine whether any adjustments are needed before the new tax kicks in.
Another notable aspect is what didn’t happen: the opposition’s proposal to allow first-home buyers to tap into up to $50,000 of their super for a house deposit will not go forward. The concept of using super savings for non-retirement purposes was debated during the campaign, but the policy status quo means superannuation will remain preserved for retirement except in existing exceptional circumstances. Business owners and family enterprises can take comfort that their employees’ super will continue to grow for long-term financial security, and that the system’s stability is being maintained aside from the high-balance tax tweak. Additionally, employers should remember that the superannuation guarantee rate is already on a legislated path to increase to 12% by July 2025 (from 11.5% currently). This incremental rise was unaffected by the election and will slightly increase employment costs moving forward. Organisations need to budget for these higher contributions, but they also contribute to a better retirement outcome for staff, which can aid in talent retention and morale.
In summary, superannuation remains a cornerstone of wealth-building with mostly predictable settings. The new hurdle of the $3 million balance tax is a focused change signalling the government’s intent to ensure equity and fiscal sustainability. Advisers to wealthy families should keep a close watch on any further signals in this area – for example, debates about defining an objective for superannuation or potential future limitations on generous tax concessions – but for now, measured adjustments and proactive planning will keep clients on track.
SME Support
Small and medium-sized enterprises (SMEs) have not been overlooked in the post-election policy landscape. Both major parties acknowledged the vital role of SMEs and pitched cost-relief and growth measures during the campaign. With the government returned, we can expect the implementation of several initiatives aimed at reducing operating costs and encouraging business investment for SMEs. Key support measures include:
- Energy cost relief: An energy rebate of $150 for eligible small businesses has been confirmed for the next financial year.
- Battery installation subsidy: A 30% subsidy on battery system installations will be available to help businesses manage electricity bills and improve sustainability.
- Excise freeze: Draft beer excise indexation will be frozen from August 2025, supporting hospitality businesses and small brewers.
- HELP debt and Medicare support: Broader measures such as a 20% HELP debt reduction and expanded bulk billing indirectly support business operators and their staff through improved household budgets.
While generous, these measures are largely incremental. Some ambitious pre-election promises – including large wage subsidies, instant asset write-off expansions, and major small business tax offsets – will not proceed. Business owners should plan accordingly, using what’s been legislated, and not banking on unpassed proposals.
For SMEs and their advisers, now is the time to assess where these programs can reduce costs, fund investments, or support workforce planning. Small savings add up, and when combined with tax planning and strategic forecasting, they can materially affect business outcomes.
Strategic Advice
Advisers have a crucial role in translating post-election policy into practical outcomes. Here’s where to focus:
- Tax Planning: Reassess profit distribution strategies, especially for owners earning under $190k, to take advantage of lower marginal rates.
- Super Strategy: For clients nearing or exceeding the $3 million cap, review contribution timing, alternative investment vehicles, and withdrawal plans.
- Grants & Incentives: Ensure clients access available subsidies and energy rebates, and prepare capital investment plans that align with asset write-off rules.
- Compliance Readiness: Confirm payroll systems are adjusted for the rising SG rate, and review other compliance obligations to avoid penalties.
The election result offers a window of stability. Businesses and families who plan ahead, rather than reacting last-minute, will be best placed to benefit.
Final Thoughts
The 2025 election outcome offers continuity rather than disruption – and that’s an opportunity in itself. For those willing to engage proactively with their advisers, the year ahead presents real potential to optimise financial strategies, manage risk, and take advantage of targeted support.
At Xcel Advisory, our role is to simplify the complex and turn policy into practical action. Whether you’re a business owner, professional, or high-net-worth family, we’re here to help you make sense of the shifts and stay on the front foot.
If you’d like to review how the election outcomes may affect your business or personal financial strategy, get in touch with our team today.