What’s in the budget? Experts break it down

“The budget largely overlooked small business during the most challenging environment in living memory. With decade-high insolvencies and crippling energy, rent, and input costs, this Budget had the opportunity to provide a long-term roadmap for small business growth. Unfortunately, it largely recycles existing policies and fails to substantially deliver for the 2.5 million small businesses in Australia and the 5 million people they employ. Small business needs certainty when it comes to the Instant Asset Write-Off. Not only is this measure unaccounted for in the budget, but it is yet to even be legislated for this financial year. In a volatile economic environment, the IAWO should be made permanent to provide an added incentive to invest and improve business.”

“Businesses and their advisers will find little in the federal Budget that will help offset the pain all-too-many small businesses have been experiencing. The Budget lacks ambition and a thorough understanding of what business needs. SMEs—many of which have thin margins—needed a Budget that would significantly alleviate the cost pressures they face every day. The instant asset write-off is a prime example. Tonight, it should have been made permanent—but it remains in limbo.”

“This Budget offers some practical support but falls short on ambition. Small businesses will welcome energy bill relief and stronger protections against unfair trading, but where’s the investment in growth? There’s no broad tax relief, no new digital transformation funding, and no real incentives to help businesses expand or innovate. Australia’s small business owners don’t just need help keeping the lights on—they need policies that help with recovery and fuel long-term success.”

“Xero is pleased to see the proposed support for Australia’s 2.6 million small businesses, especially the extension of energy bill relief and funding to encourage consumers to spend with Aussie businesses under the Buy Australian Campaign. However, while these measures offer some quick and short-term relief, they don’t help solve the systemic challenges preventing small businesses from thriving. Productivity for small businesses has stalled, and the government needs to invest in policies that encourage innovation and help small businesses adopt technology to work smarter.”

“The Government talks a big game about innovation, but when it comes to the digital economy, we didn’t see the bold investment we were hoping for. Sure, there are significant funds for initiatives like the $1.7 billion Future Made in Australia Innovation Fund—mostly aimed at green manufacturing and clean energy tech—but where’s the equivalent ambition for our digital economy and fintech sector? Digital finance feels like an afterthought here, and as a fintech CEO, I’d like to see our sector put front and centre, not left on the sideline.”

“The digital economy is the backbone of Australia’s future competitiveness, especially for small businesses, yet this Budget delivered mostly incremental measures. Other countries are investing heavily in their digital ecosystems—grants for e-commerce, incentives for going cashless—and that’s the kind of forward-thinking investment we’d hoped to see here. Instead, the Budget’s approach to the digital economy felt cautious. It’s a missed opportunity to more aggressively back fintech and online commerce innovations.”

“We’re surprised—and frankly disappointed—to see nothing on AI in this year’s budget, despite it being mentioned in tonight’s speech. If Australia wants to compete on the global stage, we can’t afford to fall behind in accelerating the adoption of AI. We need targeted support—especially for small businesses—to access AI tools, training, and infrastructure.”

“Despite the government’s recent policy announcement to regulate crypto exchanges and fintechs similarly to traditional financial services, this year’s Federal Budget fails to mention digital assets in any shape or form. This oversight is disappointing, especially given the significant role that cryptocurrency, particularly Bitcoin, has played in other developed countries like the US over the past six months. Australia is continuing to fall behind in adopting and accepting crypto as a legitimate asset class.”

“It is dismaying to see that crypto is once again completely absent in this year’s budget. Australia ranks third in crypto ATM installations globally, which is a clear indication of the wide adoption of crypto in this country and the promising future it could bring to the crypto sector. We would have liked to see that commitment reflected in the Federal Government’s broader fiscal policy.”

“Cybercrime is one of the fastest-growing threats to small businesses and the fintech sector. The lack of new funding or a stronger national strategy is a real concern. We need bold, proactive action now to protect the trust that underpins digital payments. Businesses can’t carry the burden alone. Government should lead with better resourcing, stronger coordination, and strategic investment.”

“The 1% reduction in the tax rate for the lowest bracket is a modest, yet welcome change. Unfortunately, it stops short of the broader tax reform necessary to truly empower low-income earners. SuperAPI urges the government to balance immediate tax relief with long-term financial stability by adopting the superannuation industry’s proposals to ensure contributions are made for all individuals under 18, regardless of their working hours.”

“Putting more money back in Australians’ pockets with additional tax cuts is a step in the right direction. However, this year’s budget has unfortunately missed a key opportunity—payroll tax reform. The Commonwealth has a real chance to lead by working through the National Cabinet to harmonise payroll tax across states and lift the threshold.”

“With inflation being tamed and retail investors looking to diversify their portfolios amid global market volatility, there was an opportunity here to incentivise local traders to back ASX-listed companies more. This would be win-win, providing greater support for local businesses while rewarding local retail investors who back Aussie innovation.”

Australia has delivered a budget that does not mention AI once. While this isn’t the first time this has happened, it is now becoming increasingly unusual as other major global governments and funds prepare to spend billions on securing a foothold with this new technology.  That, in itself, sets the tone for a federal budget that has so little to say about technology, that any sparse mention of a policy becomes a focal point. In that regard, this year’s budget has its sights firmly, and rightly set on cyber security, which we know from our customers is a major issue for small businesses. A breach can cost a business anywhere in the ball park of $50,000 to resolve. But when you do some napkin math, the Federal Government is today committing roughly $20 per business towards protecting them. Considering the hardship faced by a breach, and the impact it can have on a business this hardly seems appropriate. Much like Australia’s Front Door program, the UK also introduced a similar policy regarding overseas investment. But rather than encourage more investors, it simply created another barrier for investment. While more capital is always better, could the funds be better spent unlocking capital in Australia? We know from dealing with high-net worths and family offices that so much of their wealth is still locked in property. With the right settings, that help derisk their investment, that could be re-deployed towards startups.  The details aren’t all here, and we’re still yet to see what will come out of an impending election. But even digging a teaspoon into the bigger picture policies of this budget that affect business sees them unravel.

This year’s budget was always going to focus on cost-of-living relief, especially with an election on the horizon. The challenge was whether it could also lay the groundwork for innovative solutions to some of the country’s biggest issues. There are positive signals. Policies like the Front Door for investors and efforts to streamline M&A processes are welcome steps for the VC community, though we’ll need more clarity on how they’ll be implemented. At the same time, the budget leans heavily on direct government spending to address key challenges. While investment in areas like mental health and climate action is critical, there’s an opportunity to better leverage Australia’s entrepreneurial talent to develop scalable, long-term solutions. With the right support, founders could not only tackle these problems but also drive job creation and economic growth.

This is a federal budget aimed at winning votes with a headline tax cut, but has very little substance for the business or startup community. It’s arguable that the only businesses who directly benefit from an uptick in consumer spending will see a tangible benefit from this budget. Of the big ticket items that do affect emerging business, perhaps the most questionable is the Front Door for investors, which has been introduced as part of the Future Made In Australia policy. While addressing this is a step forward, do we really need another committee to vet investments coming into Australia? FIRB’s current level of transparency with its decisions on overseas property investment is questionable at best. More broadly, while we may see more measures announced during the impending election, it’s a shame to see that there’s no broader appetite for structural tax reform — the kind that throws income tax, GST and business tax on the table, with the aim of creating a fairer system for all. There’s appetite from the broader community on this, but a lack of political willpower.

This latest budget has seen fintech fall off the Federal Government’s agenda, which is a shame, as it perhaps one of the greatest solutions to boosting productivity and addressing cost of living. cThose two points could be seen as the major themes of this budget. But the Consumer Data Right, which was allocated funding in prior budgets, was championed previously as a solution for both. Beyond this, we welcome a cautious approach toward surcharging — which is hinted at in the papers, but talked around in Chalmer’s Budget Address. Empowering the ACCC to address excessive surcharging is the right move forward. But we’re still wary that an outright ban could actually set the payments industry backwards and in turn inadvertently hurt consumers. The Future Made in Australia and National Productivity Fund are welcome commitments. We would welcome more discussion about how this could better interact with both the startup and fintech ecosystem to drive growth. A good start would be a discussion on the R&D Tax Incentive, for which a review was canvassed ahead of this budget, but failed to get a mention in the papers. 

We may be better off becoming a zoo keeper in Australia than a startup founder. The Federal Budget found funds for Pandas in Adelaide, but many of the big ticket startup impacting items flagged ahead of the budget, like a re-examination of R&D Tax Incentives, were given a firm swerve. In their place, we got reform to encourage overseas investment into business — albeit via yet another new committee. And a continued focus on the energy transition. In my view the non-compete clause reform won’t really affect the startup ecosystem that much either. Well, at least not for us, as we don’t practice in poaching staff. That’s not to say the budget is all bad. Tax cuts will flow onto consumer spending, and the focus on cutting red tape and improving productivity is welcome — especially if that means a closer look at government services offered to the business community.  But it’s getting harder and harder to see how the Federal Budget will genuinely impact founders or anyone planning to innovate in Australia. Perhaps this is the goal? But it’s an alarming trend with State Government’s nationally not being in a fantastic position to pick up the slack.