Glimpses of cost-of-living relief for voters as business ignored – again

The Federal Government has continued its tradition of leaving business wanting as it delivered band-aid solutions and tinkered around the edges of economic policies, in Pitcher Partners’ first take on the Federal Budget. 

Among the announcements was a change to tax thresholds, with the 16 per cent tax rate that applies to $18,201 and $45,000 dropping to 15 per cent from 1 July 2026, then to 14 per cent from 1 July 2027. 

Cost of living featured strongly as expected, with measures confirmed including a $150 power bill rebate for every household, reduced Pharmaceutical Benefit Scheme medicine costs, and funding for more bulk-billed GP visits. 

Pitcher Partners National Chairman John Brazzale said it was a typical pre-election Budget that targeted voters but ignored the businesses that were doing the heavy economic lifting. 

“Voters are front and centre of this Budget, with changes to the income tax thresholds and the shift away from means testing for childcare providing some relief for households,” Mr Brazzale said. 

“But it’s also surface-level relief and continues a long tradition of no structural reform and band-aid solutions to income tax brackets. 

“These measures, designed to appeal to voters struggling with rising expenses, are unlikely to make a substantial difference to many households, in the face of earnings erosion from bracket creep, inflation and the ever-rising cost of housing.” 

Mr Brazzale said despite a decline in commodity prices and a pullback in the jobs market, the Budget did little to address political instability and business concerns. 

“Absent from this Budget is a vision and a plan to reinforce the nation’s finances or address looming tariff concerns and other international pressures,” he said. 

Australia’s gross debt is forecast to be $1,022 billion, which is more than 35% of GDP, and the deficit in 2025–26 is projected to be $42.1 billion. The Federal Government is expected to collect $357.8 billion in income tax and $145 billion in company and resource rent tax, which makes up more than two-thirds of the nation’s forecast $750.3 billion revenue take. 

Mr Brazzale said there remains no appetite for genuine economic reform to lift productivity or provide support for business investment. 

“The decision not to expand the instant asset write-off is a clear signal of business being on the backburner in this Budget,” he said.  

“There are levers that a government can pull in the face of domestic and global economic instability, and in the absence of these levers being pulled, the nation’s economic direction risks meandering. 

“This Budget is another missed opportunity to lift investment confidence and strengthen the economy to one that relies on more than just mining, building and infrastructure. 

“As our economy’s resilience wanes, our financial position remains highly vulnerable to pressures outside of its control. 

“Revenue has narrowed to income tax and corporate tax revenue, which are at record highs and leave the nation’s businesses and workers doing all the economic lifting.” 

The decision to ban non-compete clauses for people earning up to $180,000 may remove a barrier that prevent employees from starting their own businesses. 

“This decision improves the mobility of the nation’s labour force and does provide some value,” he said. 

“However, there remains a raft of red tape and Federal taxes that are slowing business activity and reducing available private funding for the commercial sector to invest and innovate. 

“It’s business investment that holds the key to solving or at least addressing challenges such as housing supply, and ensuring international competitiveness.   

“It would be great to see Budget policy that really gets serious about encouraging long-term sustainable business investment to fulfil to these aspirations.” 

ENDS