What is happening in 2025: Key Changes and Challenges 

Life has never been the same since 2020, even as things go back to “normal”. 

Looking at the news, you may feel there’s uncertainty everywhere. 

Here in Australia, we’re already a quarter of the way through 2025 and are already seeing signs of big changes to tax, retirement, cost of living, and small businesses. 

Here’s a simple overview of what’s happening, what to expect, and how you can prepare for the year ahead. 

1. Election Changes  

2. Superannuation Updates 

3. Small Business Asset Write-Off 

4. New Wage Theft Laws  

5. New Car Emission Standards  

6. Cost Of Living and Interest Rates  

1. Election Chaos (and Opportunities Too) 

What’s Happening 

Australian Federal Election has been called for 3 May 2025

What to Expect 

• Political advertising everywhere—on social media, TV, billboards 

• Temporary incentives or relief measures for small businesses (meant to win over voters) 

How To Prepare: 

• Track policy announcements specific to your city and industry – these may have a big effect on your business or household 

• Ask your accountant how to take advantage of any election-year changes (such as temporary relief programs) 

2. Retirement: Superannuation Updates 

What’s Happening 

• #1 A 30% tax had been proposed on superannuation fund earnings over $3 million. It’s still held up in the senate. 

• #2 Super rate increases: The super guarantee rate rises from 11.5% to 12% on July 1, 2025. which adds to payroll costs if you have employees 

• #3 Super for parental leave: Starting July 1, 2025, you can earn super contributions while on paid parental leave 

What to Expect 

• If you have employees, then #2 super rate increase will add to payroll costs 

How To Prepare: 

• Update your payroll systems now to ensure smooth super compliance starting in July 

• Let your team know about super for parental leave — it can boost morale for working parents 

3. Foreign resident capital gains changes on sale of property 

What’s Happening 

• Foreign property sales: Starting January 1, 2025, foreign residents selling Australian property face a 15% withholding tax on the whole of all Australian land and buildings. 

• This means higher taxes for overseas property investors.  

4. Small Businesses: $20,000 Instant Asset Write-Off  

What’s Happening 

• The popular $20,000 instant asset write-off has still not been passed for 2024/25 financial year. 

• Small businesses are in abeyance waiting for this measure to be passed by Parliament.  If it isn’t passed the instant asset write-off limit reduces to $1,000. 

What to Expect 

• Possible stricter limits on deductions and tax write offs 

• Big purchases like vehicles or equipment possibly won’t have the same tax advantage as before 

• Potential for delayed spending decisions in the B2B space as businesses adjust to the change 

How To Prepare: 

• Talk to your accountant about tax and deductions before making big purchases 

• Keep an eye out for temporary measures announced closer to election time. Incentives can sometimes return during budget negotiations 

5. Small Businesses: New Wage Theft Laws 

What’s Happening 

• Starting 1 January 2025, intentional underpayment of wages is officially criminalized. 

• The penalty is up to 3x the unpaid amount to a maximum of $7.825 million 

What to Expect 

• Regulators focusing more putting more focus on workplace compliance 

• More random audits 

• Stiffer penalties for businesses that miscalculate wages (deliberate or accidental) 

How to Prepare 

• Double-check payroll records and systems for compliance. Even unintentional underpayment could now bring huge fines. 

• Consider getting an outside perspective if your payroll seems complicated or outdated 

6. New Car Emission Standards 

What’s Happening 

• Starting January 1, car manufacturers will face stricter CO2 emissions standards. 

• Failure to meet targets means penalties. Exceeding targets generates tradable credits. 

What to Expect 

• More eco-friendly cars coming to market. These could also come with tax incentives or rebates 

• Businesses with fleets may feel pressure to adopt greener vehicles faster 

How to Prepare 

• If you have a fleet of vehicles, 2025 may be a good year to upgrade to fuel-efficient models 

• If you plan on getting a new car – check the latest green vehicle incentives. There could be rebates or credits to help offset costs. 

7. Cost of Living and Interest Rates 

What’s Happening 

• Interest rates have already dropped and may continue between now and June 2025 as inflation cools. 

• Cost-of-living pressures are still here and won’t disappear overnight. 

What to Expect 

• Some financial relief for mortgages and business loans, if interest rate cuts arrive as predicted 

• Continued challenges in managing rising costs for essential goods and services 

How to Prepare 

• If rates drop, consider refinancing loans to free up cash flow for your business or personal expenses 

Be Ready, Stay Informed 

2025 has already brought plenty of changes. Many of these bring opportunities if you can set yourself up for success.  

For small businesses, it can seem like costs are increasing. But knowing, planning, and implementing can help you stay ahead of these shifts.  

The good news is you don’t have to figure it all out alone. Talk to your accountant or trusted advisor about navigating the details. And do it now — so you can come out ahead. Get in touch if you’d like a free consultation.