OnDeck Australia looks at what the 2025 Federal Budget held for Australia’s small business community.
Federal Treasurer Jim Chalmers has handed down the 2025 Federal Budget, and it has to be said, there’s not much in it for small businesses.
Looking at the Budget broadly, Cameron Poolman, CEO OnDeck Australia, says, “We saw a lot of focus on consumers, which is great for households – and we may see some uptick in consumer confidence and spending as a result. But small business has done it just as tough as anyone else.”
While around 14 million individual taxpayers are set to receive modest tax cuts[1], the Government also expects approximately 1.5 million sole traders to benefit from the changes[2].
The $17.1 billion in tax cuts over the next four years, will see the 16% tax rate reduced to 14%, delivering a modest $5.15 per week from July next year and $10.3 per week from July 2027[3].
Cameron comments, “This seems barely enough, considering the costs for sole traders in running their small businesses. While every bit helps, many small business owners need more meaningful support to manage rising costs and grow their ventures.”
“Many small business owners need more meaningful support to manage rising costs and grow their ventures.”
No extension to the $20,000 Instant Asset Write-Off
In particular, the Budget made no mention of the Australian Governments Instant Asset Write-off, which currently allows businesses with a turnover of less than $10 million to immediately deduct the cost of assets up to $20,000, rather than depreciate them over time[4].
Without an extension – and the Budget didn’t offer one – the $20,000 instant write-off will end on 30 June 2025 and revert back to its rock-bottom legislated rate of $1,000 next financial year.
Cameron notes, “This makes it critical for small businesses to get cracking if they plan to buy plant, equipment, vehicles, IT gear, or even refurbish their premises because the $20,000 write-off ends in just a few months.
“And remember, the assets have to be in place, not just on order, by 30 June in order to make a tax claim.”
$150 energy rebate
The Budget has extended the cost-of-living support we saw in last year’s Budget to the end of 2025.
It means small businesses and households can be entitled to an energy bill rebate of $150, which would cover the second half of 2025.
“In most cases, the rebate will be applied automatically so business owners don’t need to take action,” says Cameron. “However, a $150 break on power bills can hardly be called a tremendous helping hand given that the Australian Energy Retailer recently announced that small businesses could see their electricity bills rise between 4.2% and 8.2%[5].
In addition, the Energy Efficiency Grants for Small and Medium Sized Enterprises program is providing $56.7 million in grants of up to $25,000 to over 2,400 businesses. This funding will be available for a range of energy upgrades, such as replacing inefficient appliances and improving heating systems[6].
Non-compete clauses to be banned
The Budget announced a plan to ban non-compete clauses for workers earning less than the high-income threshold in the Fair Work Act (currently $175,000)[7].
If passed into law, this is expected to impact nearly 3 million workers and is part of the Federal Government’s crackdown on anti-competitive practices.
The logic here is that non-compete clauses, which often affect trades such as hairdressing and finance broking, with aggregators having non-compete clauses in employment agreements for brokers, can act as a drag on the creation of new enterprises.
Cameron observes, “On one hand, banning non-compete clauses drives competition, which is good for the consumer.
“But right now, one of the biggest challenges facing small businesses is attracting and retaining good staff. A lot of our clients approach OnDeck for funding needs around hiring.
“Staffing can become a nightmare if a small business owner invests time and money training their people, only to lose them either to a new enterprise the employee starts up, or to a competitor.
“It is such a big burden on small businesses,” adds Cameron. “I would argue it takes three to six months of training before you get real value from an employee. And if they stay with the business for just one year you haven’t really recouped your investment.”
“…One of the biggest challenges facing small businesses is attracting and retaining good staff.”
Cheers to a freeze on beer excise
The Government is supporting the hospitality sector and alcohol producers by pausing the increase in draught beer taxes and offering financial support through existing programs. This is estimated to save brewers and distillers $165 million over five years from 2024–25.
Levelling the playing field for franchising
Small business owners will be buoyed by the Government’s decision to provide $7.1 million over two years from 1 April to strengthen the Australian Competition and Consumer Commission’s enforcement of the Franchising Code. The franchising sector is an important sector, employing around 520,000 people and contributing more than $135 billion to the economy each year[8].
The Government will extend protections from Unfair Contract Terms and Unfair Trading Practices to businesses regulated by the Franchising Code, subject to consultation.
Digital and cyber security supports
Since the 2023–24 Budget, the Government has committed more than $60 million to support small businesses in strengthening their digital and cyber security capabilities. This investment is being delivered through several initiatives, including the Digital Solutions program, the Cyber Wardens program, the Small Business Cyber Resilience Service, and the Cyber Health Check.
“These programs help small businesses adopt digital tools and grasp the opportunities that going online offers and prevent and bounce‑back from cyber‑attacks, but it still seems like lip service considering the threats cyber criminals pose to small and medium business owners,” Cameron says.
The frequency and cost of cyber-attacks on small to medium businesses is growing. In the 2022-23 financial year, the average cost of cybercrime increased to $46,000 for small businesses and $97,000 for medium businesses[9].
Adding it all up
Overall, Cameron feels it was a ‘pretty underwhelming’ Budget for the small business community. That said, he does see some positives.
“There are some tax breaks for consumers – though they are tiny, adding up to about a cup of coffee a week. However, a large tax cut would be inappropriate right now given the potential risk to inflation, which would just see the Reserve Bank hike rates again.”
“The Federal Government is expecting inflation to stay within 2-3%, which is good, and we’ll see GDP growth. The elephant in the room is tariffs imposed by the US, but right now, that is very much a moving feast.”
For your small business funding needs talk to your OnDeck BDM or call us on 1800 676 652.
Sources
[1] https://www.pm.gov.au/media/new-cost-living-tax-cuts-under-labor
[2] https://budget.gov.au/content/06-economy.htm
[3] https://www.amp.com.au/resources/insights-hub/economic-implications-federal-budget-2025-26
[4] https://www.ato.gov.au/about-ato/new-legislation/in-detail/businesses/small-business-support-20000-dollar-instant-asset-write-off
[5] https://www.aer.gov.au/news/articles/news-releases/default-market-offer-dmo-2025-26-draft-determination
[6] https://budget.gov.au/content/06-economy.htm
[7] https://ministers.dewr.gov.au/chalmers/cracking-down-non-compete-clauses-boost-wages-and-productivity
[8] https://ministers.treasury.gov.au/ministers/julie-collins-2024/media-releases/albanese-labor-government-taking-further-action-support
[9] https://business.gov.au/news/improve-your-cyber-security
OnDeck does not provide tax, legal, or accounting advice. Any references to tax obligations or financial matters are for general information only and should not be relied upon. We recommend speaking with a qualified tax professional or financial advisor for guidance specific to your situation.
