May 3 election called: Where Labor and Coalition stand on small business
The federal election has been called for May 3. As battle lines are drawn, here’s how both sides of the aisle are wooing small businesses.
It’s on! Australia is heading to the polls on May 3. Prime Minister Anthony Albanese has called the federal election after a meeting with Governor-General Sam Mostyn at Government House this morning.
Today’s formal announcement kicks off a five-week campaign between Prime Minister Albanese’s Labor Party and the Coalition, led by Opposition Leader Peter Dutton, as they compete for the country’s leadership.
This comes just a handful of days after the 2025-26 Federal Budget and hours after Dutton’s budget reply speech, putting economic management and cost of living pressures at the centre of the campaign.
With early polls suggesting a possible hung parliament, both major parties will not only focus on each other, but also on the independent crossbenchers who could play a decisive role in forming government.
Small businesses in the 2025 federal election
While much of the election conversation will centre on household cost of living relief, small business policies are also emerging as a key battleground.
One major point of contention is the instant asset write-off. The measure, which has long been a key tac break policy for SMEs, currently allows businesses with turnover under $10 million to immediately deduct the cost of eligible assets up to $20,000.
This was extended for 2024-25 just yesterday. However, an extension went missing from the 2025-26 budget papers. And unless new legislation is passed, the threshold will drop to $1,000 from July 1, 2025.
The Coalition has long criticised Labor for not committing to a longer-term policy, and has proposed a permanent $30,000 instant asset write-off.
Labour could still propose its own refreshed write-off during the campaign.
For the time being, the federal government maintains that its broader economic policies, including cost of living relief and competition reform, will support small businesses.
Tax policy was also a central theme in Dutton’s budget reply speech. He pledged to halve the fuel excise for 12 months, arguing this would immediately help alleviate cost pressures.
The Coalition has criticised Labor’s income tax cuts, calling them a ‘hoax,’ and has positioned its fuel excise cut as a faster way to help households than Labor’s revised tax cuts, which are scheduled to take effect in July 2025.
Another policy divide is the Coalition’s proposed $20,000 meal and entertainment tax deduction for small businesses. The Coalition argues this would stimulate hospitality businesses and encourage spending.
However, Labor has dismissed the plan as unnecessary, framing it as a tax break for business lunches rather than targeted economic support.
The federal budget also included a $365.5 million boost for ASIC and the ATO to crack down on tax fraud and illegal phoenixing. While this move is aimed at levelling the playing field, some small business owners are concerned about increased compliance requirements.
Meanwhile, campaign messaging is already heating up publicly.
As Albanese met with the Governor-General on Friday morning, Minister for Education Jason Clare and Deputy Opposition Leader and Shadow Minister for Small Business Sussan Ley clashed on Sunrise.
Clare framed the election as a choice between “higher taxes under Peter Dutton or lower taxes under Labor”.
Ley countered that “this election is about who can manage the economy better, who can help Australians to get ahead”.
The two also sparred over the Coalition’s new natural gas reservation policy, with Clare calling it a “con” and arguing that Labor had already secured six times as much gas as Dutton’s plan proposed.
Ley defended the Coalition’s position, saying they had to “correct the train wreck of a policy” that had been in place.
Election issues facing SMEs
Beyond tax policy, other proposed changes could have a significant impact on small businesses. Labor’s plan to ban non-compete clauses for workers earning under $175,000 is positioned as a way to increase worker mobility and encourage entrepreneurship.
That policy proposal will be watched closely, especially in fields where workers can take large numbers of clients with them if they change employers, and in businesses with high up-front training costs.
Energy policy is another key difference between the parties. Labor has focused on renewable energy investments, arguing that transitioning to cleaner power sources will ensure long-term affordability.
Meanwhile, Dutton has proposed a National Gas Plan that prioritises domestic supply to lower wholesale prices, which he argues will benefit manufacturers and businesses facing high energy costs.
Clare criticised this gas policy, calling it inadequate, and has pointed to existing Labor policies that have already secured additional gas supply and reduced prices.
Dutton’s reply speech also made a commitment to scrapping Labor’s $14 billion in production tax credits for green hydrogen, arguing that the government’s spending in this area is wasteful and won’t deliver economic returns.
Instead, the Coalition is proposing further investment in manufacturing and energy production, including nuclear power, which it has committed to developing as part of a long-term energy transition strategy.
Trade and migration policies are also in focus. The Coalition has proposed cutting migration by 25% and imposing a temporary ban on foreign investors purchasing existing homes, arguing this will help address housing affordability.
Back in February Labor also announced a two-year ban on foreign investors buying established homes, beginning April 1, 2025. The policy aims to ease housing pressures while more homes are built under Labor’s broader housing plan.
Additionally, the government is cracking down on land banking by foreign investors, increasing compliance measures through the ATO and Treasury to ensure land is developed within a reasonable timeframe rather than being held for speculative gains.
The crackdown is part of a $32 billion Homes for Australia plan, which Labor argues is a stark contrast to the Coalition’s approach, which it claims would cut housing investment.
Lastly, potential tariff changes, shifts in trade agreements, and increased protectionist policies in the US could have ripple effects on Australian businesses, especially in industries reliant on exports and supply chains.
This makes trade policy and Labor’s Buy Australian Plan another issue for businesses to monitor closely.
With five weeks of campaigning ahead, both major parties will ramp up their promises to small businesses, particularly in competitive seats around Melbourne and Sydney.
Should neither major party secure a dominant majority in Parliament, independents and crossbenchers will play a crucial role. This could also see small business policies as a key area of negotiation leading up to the election.
You can find all of SmartCompany’s budget coverage here.
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