On 3 May 2025 the Federal Election was held to elect members of the 48th Parliament of Australia. The Australian Labor Party (ALP) won re-election for a second consecutive term in office, and at the time of writing this article hold 92 seats, with a further 8 seats yet to be decided.
Now that the election has been run and won, we now wait for legislation to be passed for key Labor policies which were announced during the campaign.
Firstly, the ALP committed to delivering new tax cuts which was announced in the 2025/26 Federal Budget, which would commence from 1 July 2026 for individual taxpayers. The current tax rate of 16% for incomes between $18,201 and $45,000 will be reduced to 15%, with a further reduction from 1 July 2027 to 14%. These cuts have already been legislated, but during the election was intended to be repealed if the Coalition took power.
Secondly, the ALP announced an extension of the current temporary $20,000 instant asset write-off for small businesses by 12 months until 30 June 2026. This is currently only legislated to 30 June 2025, so this will hopefully provide surety to small businesses on what the threshold is for immediate deductions for the next financial year.
Another measure announced was an introduction of a $1,000 instant tax deduction from 2026-27. Taxpayers who earn labour income can claim this deduction for work-related expenses without receipts, instead of claiming individual work-related expenses, and can also claim charitable donations and other non-work-related deductions on top. If you only earn business or investment income and no labour income this deduction is not available to you, and if you have over $1,000 in work-related deductions you would continue to claim in the same manner you do now.
Finally, for first home buyers, the ALP has campaigned to guarantee a portion of a first home buyer’s home loan, so that a home can be purchased with a 5 per cent deposit and not pay Lenders Mortgage Insurance. A further $10 billion will be invested with state developers and industry to build up to 100,000 homes, with these homes reserved for sale only to first home buyers.
With the ALP not having enough numbers in their own party to pass legislation in the Senate, support would be required from other parties. In the new Senate, Labor is predicted to hold 28 seats and the Greens 11, which will give these two parties the numbers to pass legislation without relying on other cross benchers.
It will be interesting to see whether these announcements pass in their current form or with other legislation to help pay for these commitments. There may also be horse trading with the Greens, who campaigned for tax reform, including a 10% tax on the net wealth of Australia’s 150 billionaires, a 40% tax on excess profits for corporations with over $100 million in turnover, and the phasing out of negative gearing and the 50% Capital Gains discount