The Federal Labor party has been elected to return to government in the new parliament for another 3 years, with a clear majority. With the power they will hold in the parliament, it is likely they will push to legislate their election promises. Whilst the details and implications of these policies are still unclear, we make the following comments regarding some of these.

“Wipe 20% off student debt”

  • The date as to which this is to be effective has not yet been announced. If the date is in the future, there is little incentive to pay down these debts in advance or lodge outstanding tax returns inclusive of HELP debt repayments. Doing so may reduce the value of the 20% discount that is proposed to be applied.
  • Note the annual indexing on the HELP debt is legislated to be applied on 1 June 2025 at a rate of 3.2%.

“Additional tax on superannuation balances over $3 million”

  • Prior to the election being called, Labor had tabled a bill before parliament to enact this measure from 1 July 2025 however was unable to get it legislated due to opposing members of parliament.
  • Under the before mentioned bill, whilst the start date was 1 July 2025, the tax would only be levied if a members superannuation balance was over $3m as at 30 June 2026.
  • Therefore, even if the previously tabled bill was legislated unchanged in the new parliament, superannuation members have until 30 June 2026 (rather than 1 July 2025) to review their affairs concerning the new tax.
  • Noting the $3m threshold was not proposed to be indexed, under the before mentioned bill, and is therefore designed to gradually ensnare a growing portion of the population.

“Taxing of unrealised gains in superannuation”

  • Whilst a troubling fundamental change to tax policy, this measure is currently only proposed to apply to superannuation members with more than $3 million in superannuation. It is not proposed to affect members with balances less than $3 million (other than via additional administration costs).

“Tax cuts for every taxpayer”

  • Labor has proposed to:
    • From 1 July 2026, reduce tax on incomes between $18,201 and $45,000 from 16% to 15%.
    • From 1 July 2027, further reduce this tax rate from 15% to 14%.
  • Noting the tax rate on superannuation contributions is unchanged at 15% (30% for those with adjusted taxable incomes over $250,000), this measure reduces the incentive for lower income earners to contribute to superannuation, and may in fact penalise them.

“$1,000 standard tax deduction for all taxpayers” (from 1 July 2026)

  • This is proposed to only apply to people earning “labour income” in the form of wages, and not those who simply have investment income or are sole traders.
  • Will not benefit the taxpayers who incur more than $1,000 of work-related expenses, often including motor vehicle, travel, home office, self-education expenses.
  • Creates an incentive for wage earners to salary sacrifice work related expenses to effectively gain an additional non-incurred $1,000 tax deduction.
  • Creates an incentive for business owners who were previously remunerated by way of dividend or trust distribution to instead receive a small wage, to be eligible for the additional tax deduction.

“Tax relief for small business”

  • This proposal is simply to extend the $20,000 instant asset write off to 30 June 2026 (noting it was due to expire on 30 June 2025, and reverting to a $1,000 limit from then on).
  • The prospect of a future extension will assumedly be raised in the lead up to 30 June 2026 (as has been the case annually in recent years).

Feel free to contact our office to discuss how the proposed policies may affect your personal tax affairs.