Labor’s Election Victory: What It Means for Australian Taxpayers and Small Businesses

In a decisive result, the Australian Labor Party, led by Prime Minister Anthony Albanese, has secured a second term following the 2025 federal election. With a platform focused on easing cost-of-living pressures, improving healthcare, and supporting small business, the result marks a significant continuation of Labor’s economic and social agenda.

Among the most closely watched promises are Labor’s proposed tax reforms and support measures for households and small business owners.

💸 Tax Reforms for Individuals

One of the headline promises was personal income tax relief targeted at low and middle-income earners:

• Lower Marginal Tax Rates: From 1 July 2026, the lowest marginal tax rate will drop from 16% to 15%, with a further reduction to 14% from July 2027. This benefits taxpayers earning between $18,201 and $45,000, delivering annual savings of up to $536.

• $1,000 Automatic Work Expense Deduction: From FY 2026–27, individuals can claim an automatic $1,000 deduction for work-related expenses without needing receipts — simplifying tax time for millions.

• HECS/HELP Relief: A one-off 20% reduction in student debt will apply across the board, benefiting around 3 million Australians with an average debt reduction of over $5,000 per person.

🏠 Cost-of-Living Relief

To combat rising expenses, Labor has pledged several immediate support measures:

• $150 Energy Rebate: Paid in two instalments starting July 2025 to help households offset electricity bills.

• Cheaper Medicines: PBS co-payments will be capped at $25 per script.

• Boosted Healthcare Access: Funding of $8.5 billion over the next four years will expand bulk billing, telehealth, and urgent care services.

🧾 Small Business Support

Small businesses have not been left out of Labor’s tax and economic plan. Key initiatives include:

• $20,000 Instant Asset Write-Off Reinstated
  From 1 July 2023 through 30 June 2025, small businesses with turnover under $10 million can immediately write off the full cost of eligible business assets costing less than $20,000 each. This is designed to support investment in tools, equipment, and technology.

• E-Invoicing and Red Tape Reduction
  Labor has promised to expand adoption of e-invoicing and reduce compliance overheads for small businesses, particularly in dealing with the ATO and government procurement systems.

• Increased Government Procurement Opportunities
  A target has been set for 30% of Commonwealth contracts to go to small and medium businesses, creating greater access to major project work.

• Digital Growth Grants
  New grants and funding opportunities will be made available to help small businesses improve cybersecurity, adopt digital tools, and grow online.

These measures aim to improve cash flow, reduce complexity, and encourage capital investment in the sector that employs more than 40% of Australians.

🌱 Housing & Energy Reforms

Labor has also committed to:

• Building 100,000 new homes via a $10 billion housing future fund.

• Expanding the Help-to-Buy scheme for eligible first-home buyers.

• Investing in solar battery rebates and community energy upgrades with a renewable energy target of 82% by 2030.

📌 What Happens Next?

While many of these initiatives have been flagged for the 2026–27 financial year or later, legislation is expected to begin flowing through Parliament shortly. As always, taxpayers and small business owners should speak with their accountant to plan for these changes and take advantage of early opportunities — especially when it comes to asset purchases before 30 June 2025.