Tax cuts for all, reform for none.
In his fourth budget, Treasurer Jim Chalmers has continued his promise of cost-of-living relief in what many would say is the unofficial launch of the Government’s election campaign.
As a pre-election budget, it ticks all the boxes and sets the scene for the campaign ahead: income tax cuts, energy bill rebates, HECS/HELP relief, and alcohol excise reductions. There are also measures to secure regional communities, boost Medicare, strengthen Defence, and reduce inflation. Almost every Australian is promised at least some monetary benefit from Federal Budget 2025.
At the end of the day, there are tax cuts all around, with no money left in the tin for the Opposition to fund promises it may wish to make.
Measures pitched to boost the ATO’s revenue collection will likely be more effective at increasing the compliance burden on small businesses, large corporates, and tax practitioners. Against the backdrop of a continually evolving regulatory landscape, this adds another hurdle to navigate.
At its core, this year’s budget is a re-election pitch, and the changes Australia’s tax system needs remain off the table. The reluctance of almost any Australian politician or party to discuss tax reform means the budget deficit increases during the forward estimates period. This will leave the Opposition to fund any election promises from either further borrowing or cuts to existing and announced spending.
Without a commitment to even think about tax system reform, the question remains: how long can Australia afford to continue down this path?
Explore our insights on specific topics below or download our full analysis as a PDF report (1.84mb).
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