Australia's peak accounting body, Chartered Accountants Australia and New Zealand (CA ANZ), has welcomed the announcement of two new tax cuts for Australian taxpayers as part of cost-of-living measures in the Federal Government's 2025-26 Budget, but continues to call for a meaningful discussion about the nation's taxation system.
"Australia relies heavily on personal income tax collections to prop up the nation's revenue and hard-working Australians deserve the two additional tax cuts coming their way, as they continue to face cost-of-living pressures," said Susan Franks, CA ANZ Tax, Superannuation and Financial Services Leader.
With the federal election approaching, CA ANZ used its pre-budget submission to highlight this very issue, and CA ANZ is pleased to see the Federal Government has listened.
"We agree with the Treasurer – Australians should keep more of what they earn and two additional tax cuts for Australian taxpayers is an important step in the right direction. There is still a lot of work to be done to address bracket creep and improve equity in the tax system, especially for future generations.
"As we head to the polls, we again urge both major parties to commit to a roadmap for tax reform," said Ms Franks.
Tax Practitioners Regulation and Compliance
CA ANZ acknowledges the announcement in the Federal Budget to strengthen the sanctions available to the Tax Practitioners Board (TPB), modernise the registration framework for tax practitioners, and the commitment of funding to the TPB to implement these changes and undertake additional compliance targeting higher-risk practitioners from 1 July 2025.
"We support the proposition that the TPB should have a robust sanctions regime to deter misconduct and impose appropriate penalties proportionate to the level of wrongdoing, but it has to be flexible so as to allow for the consideration of a tax practitioner's circumstances and include a fair process," said Ms Franks.
"CA ANZ will participate in the consultation process on the changes promised by the Government tonight, to ensure the legislation that comes before parliament is fit-for-purpose and doesn't create any unintended consequences.
"The vast majority of the tax profession already adheres to high standards, and we must not punish hardworking accountants, including our members in smaller practices, who are doing the right thing each and every day.
"We're also pleased to see the government has listened to CA ANZ and will not pursue an earlier proposal to remove the professional association accreditation and registration pathway. The removal of the pathway would have worsened the current shortage of tax professionals," said Ms Franks.
Support for Small Business
CA ANZ is pleased to see the Government specifically call out the backing of small businesses in the Federal Budget but believes there's been a missed opportunity.
"The instant asset write-off which is a useful cashflow support has been extended time and time again, with the extension in the last budget yet to be legislated," said Ms Franks.
"Small businesses relying on the continuation of the instant asset write off will be disappointed as there is no budget announcement extending it beyond 30 June 2025.
"CA ANZ calls upon the Government to make the instant asset write-off permanent and the threshold consistent, to reduce red tape for both business, Government and tax agents.
"There are also numerous announced but unenacted measures impacting small businesses and tax agents across Australia that continue to impose unnecessary uncertainty and pressure."
CA ANZ notes more than $200 million has been allocated to stabilise Australia's business registers and undertake targeted uplifts, including linking Director Identification Numbers to the Company Register.
However, CA ANZ's Sustainability and Business Reform Leader, Karen McWilliams said that it is important to note that the Government previously halted the modernisation of the registers for cost reasons.
"These efforts to now stabilise the registers also come at a cost with limited benefit to users," said Ms McWilliams.
"CA ANZ has long advocated for register searches to be free of charge, which was intended as part of the modernisation program.
"This is increasingly important now as the approximately 80,000 professional services providers and real estate entities to be brought into the Anti-Money Laundering and Counter-Terrorism Financing regime will need to access registers to fulfil their duties. Many are small businesses and this is an additional cost of compliance to them."
Superannuation
CA ANZ remains concerned that superannuation reform is not included in the Budget and continues to call for the annual superannuation contribution caps to be replaced with lifetime caps and all Australians to have access to financial advice by allowing qualified accountants to provide it.
"As Australia's population ages, it is critical that older people can easily navigate their retirement options, and a lack of financial advisers is adding unnecessary confusion," Tony Negline, CA ANZ Superannuation and Financial Services Leader said.
"Our members are highly trained and skilled and can assist older Australians through this difficult transition period, but the regulatory environment needs urgent reforms.
"CA ANZ also remains staunchly opposed to the Government's changes to superannuation that will see people with more than $3 million in total superannuation assets slugged with an additional 15 per cent tax, and we're urging the Senate to reject the Bill if it comes up for debate this sitting week.
"The annual superannuation contribution caps negatively impact those with broken work patterns, such as women who pause work to have children, and needs to be replaced with a lifetime cap.
"Scrapping the annual superannuation cap is a significant and practical step towards building and safeguarding superannuation in Australia, while improving women's financial security."
CA ANZ is disappointed that the government did not make a specific allocation to the Australian Taxation Office so it could develop appropriate reporting to all employers to help them comply with the Pay Day Super reforms that will commence on 1 July 2026.
Economic Impact
"The Treasurer handed down a budget fit for an election, but with all the fiscal challenges that we already knew about," said CA ANZ Chief Economist Richard Holden.
"The underlying deficit for the 2024-25 fiscal year came in at $28.3 billion. Over the total period of the forward estimates the underlying deficits total $179.5 billion. The total actual "headline" deficits over the forward estimates are considerably larger, coming in at $283.4 billion.
"In the long run, the only way to deal with a deficit is by increasing taxes or reducing spending, so this is the key figure that will drive major policy decisions, whoever is in government after the election," Professor Holden said.
Professor Holden also highlighted the budget's economic growth forecast, which anticipates growth of 1.5 per cent in 2024-25, 2.25 per cent in 2025-26 and 2.5 per cent in 2026-27.
"This is arguably rather bullish in a world marked by global uncertainty with U.S. President Donald Trump set to announce a new wave of tariffs on 2 April, on top of the existing disruptions to global supply chains that have already occurred, and the substantial uncertainty about European security arrangements," he said.
Chartered Accountants ANZ's economic and tax experts, Chief Economist Professor Richard Holden and, Tax, Superannuation and Financial Services Leader Susan Franks CA, are available for Federal Budget commentary, on request.
