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This election’s tax and superannuation policies explained.
Making sense of the election policies
01 May 2025
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15 minute read
2025 federal election
On the eve of the 2025 federal election, with polling day on 3 May 2025, the respective parties have spent months, and more particularly the last five weeks, setting out their campaign policies should they be elected to form government. While a number of tax and superannuation measures have been announced during the run-up to the election, tax reform has been conspicuously absent throughout the major parties’ campaigns, with little commitment to either progress or abandon the long list of announced but unenacted measures (ABUMs).
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This article provides the key facts about the tax and superannuation measures announced by the Australian Labor Party (ALP) and the Liberal Party of Australia (Coalition) during their campaigns. Measures not related to the tax and superannuation laws are not considered here.
At this stage, it is unclear whether any of these measures will become law, as they are subject to the outcome of the election and passage of enabling legislation through the Parliament.
The author and The Tax Institute do not express a view on the merits of these policies at this time.
ALP announcements
20% reduction on all student loans
Prime Minister Anthony Albanese announced in a media release on 3 November 2024 that a re-elected Albanese government would reduce all student loans by 20 per cent by 1 June 2025.
Around 3 million Australians with HELP, VET Student Loans, Australian Apprenticeship Support Loans and other income-contingent student support loan accounts that exist on 1 June 2025 would see their loans reduced by approximately $16 billion. For example, an average HELP debt of $27,600 would be reduced by around $5,520 from 1 July 2025.
$1k instant tax deductions for work-related expenses from 2026–27
The Prime Minister announced in a media release on 13 April 2025 that a re-elected Albanese government would introduce a $1,000 instant tax deduction for individual work-related expenses (WRE) from the 2026–27 income year.
Under the measure, individuals would:
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not need to keep receipts to substantiate their deductions for WREs totalling less than $1,000;
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be able to choose to claim the $1,000 deduction instead of claiming individual WREs;
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have to earn labour income to be eligible for the instant tax deduction — taxpayers who earn only business or investment income and no labour income would continue to claim their deductions under the normal rules;
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still be able to claim WREs of more than $1,000 in the usual way; and
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continue to be able to claim charitable donations and other deductions that are not work-related, on top of the instant tax deduction.
This measure has similar features to the standard deduction measure announced by the former Treasurer, the Hon Wayne Swan, on 11 May 2010 as part of the federal budget 2010–11. It was proposed that individual taxpayers would be able to claim a standard deduction of $500 for WREs and the cost of managing tax affairs from 1 July 2012, increasing to $1,000 from 1 July 2013. However, that measure was never legislated.
Extension of $20k IAWO for 12 months to 30 June 2026
The Prime Minister announced in a media release on 4 April 2025 that a re-elected Albanese Government would extend the $20,000 small business instant asset write-off (IAWO) threshold for a further 12 months to 30 June 2026.
This would allow small businesses (aggregated annual turnover of less than $10 million) to continue to be able to deduct the full cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use for a taxable purpose by 30 June 2026.
This follows the now legislated temporary increase in the IAWO threshold to $20,000 for 2024–25.
Addressing financial abuse
The Prime Minister announced in a media release on 22 April 2025 that a re-elected Albanese government would commit to new practical steps to crack down further on perpetrators and address financial abuse in Commonwealth systems.
Part of the ALP’s plan, Building Australia’s future: Labor’s commitment to women (the Plan), focuses on ending financial abuse — a fast-growing and insidious form of domestic and family violence where perpetrators incur tax or social security debts in their partner’s name.
The plan proposes to:
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prevent perpetrators from using the tax and corporate systems to create debts as a form of coercive control, and make perpetrators accountable for these debts if they do;
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look at making perpetrators liable for social security debts incurred by a victim-survivor due to coercion or financial abuse; and
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look at how the government can stop perpetrators of domestic and family violence from receiving their victims’ superannuation after death.
Thanks to the efforts of those who are tirelessly advocating for change and have worked assiduously to ensure that addressing financial abuse is on the national agenda, a groundswell of support is leading to real change.
More information on the impact of financial abuse and what is needed to support victim-survivors can be found in my Accountants Daily column published on 6 March 2025.
Coalition announcements
Cost-of-living tax offset
The Coalition announced in a media release on 13 April 2025 that an elected Dutton government would deliver cost-of-living relief from 1 July 2026 in the form of a one-off income tax offset of up to $1,200.
The tax offset would be available to Australian residents for tax purposes who have a taxable income of up to $144,000:
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those earning between $48,000 and $104,000 would receive the full $1,200 tax offset;
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those earning less than $48,000, and more than $104,000 but no more than $144,000, would receive an offset of less than $1,200.
The tax offset would be delivered after lodgment of the 2025–26 income tax return.
First home buyers – access to super
As part of the Coalition’s Plan to get Australia back on track, published on its website on 20 January 2025, an elected Dutton government would deliver more affordable housing to Australians by allowing first home buyers to access up to $50,000 of their super for a home deposit.
The money initially withdrawn from super would need to be returned when the house is sold to support retirement.
First home buyers — mortgage interest deductions
The Coalition announced in a media release on 13 April 2025 that an elected Dutton government would enable first home buyers to deduct mortgage interest payments for new build homes.
Under the scheme:
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first home buyers would be eligible if they purchase a newly built home as their principal place of residence;
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individuals earning up to $175,000 and joint applicants earning up to $250,000 would be eligible (once eligible, participants would retain access to the deduction even if their income rises);
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first home buyers would be able to deduct from their assessable income the interest paid on up to $650,000 of their mortgage; and
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the overall size of the mortgage or price of the home would not be capped, but only the interest on the first $650,000 of the loan would be deductible.
$20k deduction for business-related meal and entertainment expenses
The Coalition announced in a media release on 19 January 2025 that an elected Dutton government would allow small businesses with a turnover of up to $10 million to claim up to $20,000 worth of deductions for meal and entertainment expenses. The expenditure would also be exempt from fringe benefits tax.
The deduction would be available for meal and entertainment expenses that have a connection with business activity and income, including dining and entertainment provided to clients, vendors, and employees. Alcohol would be excluded. The measure is proposed to run for an initial two years.
Measures for small and family businesses
The Coalition announced in a media release on 19 April 2025 that an elected Dutton government would implement and deliver its Plan for Small and Family Business (the Plan), which aims to rebuild small businesses and revive entrepreneurship. The plan includes two new incentives for Australians to launch and grow their own small business.
Entrepreneurship Accelerator
The new Entrepreneurship Accelerator would support newly incorporated businesses for the first three years of operation with reduced taxes on the first $200,000 of income as follows:
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in the first year of operation, a tax offset at the rate of 75 per cent on the first $100,000 of taxable income and 50 per cent on the second $100,000 of taxable income;
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in the second year of operation, a tax offset at the rate of 60 per cent on the first $100,000 of taxable income and 40 per cent on the second $100,000 of taxable income; and
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in the third year of operation, a tax offset at the rate of 50 per cent on the first $100,000 of taxable income and 30 per cent on the second $100,000 of taxable income.
Tech Booster
For the first two years of a Dutton government, the new Tech Booster would provide an incentive for small businesses to invest in the digital tools needed to grow. The incentive would provide small businesses with an annual turnover up to $10 million with a bonus tax deduction of $2,000 for spending of $4,000 or more on upgrading eligible technology.
Eligible investments would include:
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digitally enabling technology (e.g. connectivity tools);
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digital media and marketing (e.g. websites and CRMs);
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eCommerce tools (e.g. modern point-of-sale systems); and
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cyber security (e.g. training and monitoring systems).
Make the increased IAWO threshold permanent
A Dutton government would also:
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permanently increase the small business IAWO threshold (currently, the legislated threshold is temporarily increased to $20,000 — see above); and
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increase the threshold to include assets costing up to $30,000 for small businesses with an annual turnover of up to $10 million.
Position on the Code of Professional Conduct in the TASA
An elected Dutton government would repeal the Tax Agent Services (Code of Professional Conduct) Determination 2024 which imposes eight additional Code obligations on registered tax agents under the Tax Agent Services Act 2009 (TASA) from 1 January 2025 for larger agents (more than 100 employees) and 1 July 2025 for smaller agents (no more than 100 employees).
Position on proposed Division 296 tax
An elected Dutton government has indicated that it would reject the Division 296 tax, which would tax at 15 per cent the earnings attributable to the part of an individual’s total superannuation balance that exceeds $3 million.
This measure is proposed to apply from 1 July 2025 and is contained in the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023. This Bill is currently before the Senate and will lapse immediately before the new parliament commences.
Strengthening financial systems to eradicate financial abuse
The Coalition announced in a media release on 24 April 2025 that an elected Dutton government would commit an additional $90 million to further address family and domestic violence across Australia.
Among other measures, the Coalition would strengthen Commonwealth taxation, welfare and super systems where practicable to eradicate financial abuse, coercive control and unfair outcomes following family and domestic violence.
Reinstating the junior minerals exploration incentive
In a doorstop interview on 3 April 2025, the Coalition stated that an elected Dutton government would reinstate the junior minerals exploration incentive (JMEI).
Detailed in the Liberal Party of Australia’s Plan for a strong Australian resources industry, the proposed investment of $100 million over four years to the JMEI would allow greenfield exploration programs to distribute their tax losses as a credit to investors, enabling smaller players to take the risks needed to unearth the next large-scale mineral deposit.
What happens next?
The proposed policies outlined above are contingent on the outcome of the election and the subsequent passage of enabling legislation through parliament. The terms of 40 newly elected senators beginning on 1 July 2025 (with the exception of the four territory senators whose terms will commence on the date of their election) will change the composition of the Senate.
The caretaker period is a convention during which the business of government and ordinary matters of administration continue, but the government does not:
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make any major policy decisions that are likely to commit an incoming government;
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make significant appointments;
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enter into major contracts or undertakings.
The caretaker period continues until the outcome of the election is clear or, if there is a change of government, until the new government is appointed by the Governor-General, Her Excellency the Honourable Ms Sam Mostyn AC.
While the parliamentary sitting days calendar for 2025 shows scheduled days in May, the timing of the return of the election writs and the swearing in of the new government make it unlikely that parliament will sit in May. It is more likely that parliament will resume briefly in June, ahead of the winter recess in July.
What does this mean for legislation before the parliament when the election was called?
Where parliament is prorogued and an ordinary general election is held, all bills before the House of Representatives and the Senate lapse, although the timing of this varies. Bills that were before the House of Representatives lapsed on the day of dissolution (i.e. 28 March 2025). Bills that are before the Senate will lapse immediately before the commencement of the next parliament.
There is no provision for proceedings to be carried over from one parliament to the next, so a new bill must be introduced if the new government wants to proceed with a bill that has lapsed.
Robyn Jacobson is the senior advocate at The Tax Institute.
About The Tax Institute
The Tax Institute is the leading forum for the tax community in Australia. Our reach includes membership of over 10,000 tax professionals from commerce and industry, academia, government and public practice and 40,000 Australian business leaders, government employees and students. We are committed to representing our members, shaping the future of the tax profession and continuous improvement of the tax system for the benefit of all, through the advancement of knowledge, member support and advocacy. Read more at taxinstitute.com.au
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