2025 Australian Federal Election: Overview of Tax and Superannuation Policies of Major Parties and Independent MPs

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As the 2025 Australian federal election approaches, major political parties and independent MPs have proposed various tax and superannuation policies aimed at addressing key issues such as rising living costs, housing affordability, and retirement savings. Below is an objective summary of the primary policy positions from the Australian Labor Party, the Coalition, the Greens, One Nation, and select independent MPs. 

• Superannuation Tax Reform: The Australian Labor Party has proposed that, starting from 1 July 2025, an additional 15% tax be applied to earnings on superannuation balances exceeding AUD 3 million. This measure is projected to generate approximately AUD 9.7 billion in additional tax revenue over five years.

• Personal Income Tax Reform: The Labor Party plans to reduce the lowest marginal tax rate from 16% to 15% beginning in 2026, with a further reduction to 14% in 2027. By the 2027–28 financial year, these changes are expected to provide annual tax savings of up to AUD 536 for taxpayers.

• Automatic Tax Deduction: To simplify the tax filing process, the Labor Party proposes introducing a standard AUD 1,000 automatic deduction for work-related expenses starting from the 2026–27 financial year. Eligible taxpayers would not be required to provide receipts or detailed documentation to claim this deduction.

• Housing Support: The Labor Party has pledged to invest AUD 10 billion to construct 100,000 new homes exclusively for first-time buyers. Under this initiative, eligible individuals can purchase a home with a 5% deposit, with the government guaranteeing the remaining 15% of the loan, thereby eliminating the need for Lenders Mortgage Insurance.

  
  

• Opposition to Superannuation Tax: The Coalition has pledged to repeal the Labor Party’s proposed 15% tax on the portion of superannuation balances exceeding AUD 3 million, expressing concern that the policy may have long-term negative effects on younger workers.

• Relief Measures: A one-off tax offset of AUD 1,200 is proposed for middle-income earners, along with a provision allowing first-home buyers to deduct interest on mortgages for newly built homes from their taxable income over a five-year period.

• Fuel Excise Reform: The Coalition has proposed halving the fuel excise and road user charge for 12 months in an effort to reduce consumer costs.

• Superannuation Guarantee Proposal: Some backbench MPs have suggested reducing the superannuation guarantee rate from 12% to 9%, a proposal that has been criticized by the Australian Council of Trade Unions (ACTU), which argues it could undermine retirement savings.

• Excess Profits Tax Policy: A 40% excess profits tax would be applied to large corporations with annual turnover exceeding AUD 100 million. The aim of this policy is to strike a balance between corporate profitability and social contribution, ensuring that highly profitable businesses bear a fair share of responsibility for supporting public services.

• Resource Sector Tax Reform: The policy proposes a revision of the tax regime for offshore oil and gas projects to address existing loopholes and improve compliance. Additionally, a 40% windfall tax would be imposed on excess profits generated by coal and mining operations to reflect compensation for environmental and social impacts associated with resource extraction.

• Wealth Tax for High-Net-Worth Individuals: A 10% annual wealth tax is proposed for approximately 150 Australian residents whose net assets qualify them as billionaires. Revenue from this tax would be directed toward funding public services and implementing measures to alleviate cost-of-living pressures.

• Digital Services Tax Framework: A 3% digital services tax would be levied on multinational companies (such as Meta and Google) that generate more than AUD 20 million in digital services revenue within Australia, with the objective of ensuring greater tax equity in the digital economy.

• Paid Parental Leave Policy: The proposal aims to extend paid parental leave to 52 weeks by 2030 in order to better support families and promote gender equity in caregiving and the workforce.

• Education and Student Debt: The policy calls for the cancellation of all student debt, intending to relieve the financial burden on nearly three million Australians.

• Family Taxation Policy: Proposes allowing couples with at least one dependent child to combine their incomes and split them equally for tax purposes, aiming to reduce the financial burden on families.

• Support for Self-Funded Retirees: Suggests increasing the tax-free threshold to $35,000 for self-funded retirees over 67 who do not receive government payments, to encourage personal retirement savings.

• Housing Construction Incentives: Recommends a temporary moratorium on the Goods and Services Tax (GST) for building materials used in constructing new homes valued up to $1 million, intending to lower construction costs and support the building industry.

• Excise Tax Reforms: Proposes eliminating the excise tax on beer and spirits served in pubs and clubs to reduce consumer costs.

• Multinational Taxation: Opposes any increase in the GST and the reintroduction of death duties, while advocating for a tax regime that ensures multinational corporations pay their fair share of taxes within Australia.

Several independent MPs have put forward proposals focusing on tax reform, small business support, and addressing bracket creep:

• Allegra Spender MP: Released a Tax Green Paper outlining six reform priorities, including lowering personal income taxes, enhancing business productivity, and supporting the transition to a low-carbon economy. She emphasizes initiating tax reform in the next parliamentary term to tackle issues like cost of living and housing affordability.

• Dr. Sophie Scamps MP: Advocates for introducing a $20,000 tax-free threshold for small businesses with annual turnovers under $10 million, aiming to reduce tax burdens and support business growth. She also supports extending the $20,000 instant asset write-off policy.

• Zali Steggall MP: Supports increasing the instant asset write-off threshold to $50,000 and making it a permanent feature to encourage small business investment and expansion.

• Addressing Bracket Creep: A group of independent MPs advocate for indexing income tax brackets to inflation to prevent bracket creep and ensure that taxpayers are not unintentionally pushed into higher tax brackets due to inflationary wage increases.

If you have specific questions about how these policies may affect you or your business, please feel free to contact our professional team. We are committed to providing personalized advisory services to help you navigate the evolving policy landscape and make informed decisions.