From our perspective, this Budget treads carefully, avoiding bold reform in favour of cautious political maneuvering. It appears both major parties have internalised the lesson that sweeping tax reform doesn’t tend to play well with voters come election time.

Unfortunately, what we see in the numbers is a concerning economic trajectory. With an underlying budget deficit of $42.1 billion and Gross Debt projected to hit $1.29 trillion by 2028-29, the figures paint a picture of rising spending outstripping GDP growth and no meaningful plan to return to surplus. It’s a troubling long-term outlook that hasn’t been addressed head-on.

One immediate issue we feel compelled to highlight is the ongoing uncertainty around the small business instant asset write-off threshold. Nominally $1,000 and increased to $20,000 in the May 2024 Budget for FY25, legislation formalising the change has yet to pass. With no clarity on this in the March 25 Budget, small businesses are left in limbo. Our advice to clients is to approach new asset purchases with caution until the legislative landscape becomes clearer.

Another potential red flag for the business community is the Government’s proposed ban on restraint-of-trade clauses. While stamping out exploitative practices is laudable, we urge careful consideration here. The challenge for policymakers will be to strike the right balance, protecting employees from unreasonable restrictions while preserving the legitimate rights of business owners who invest heavily in their operations and staff development. Overreach could risk stifling investment and innovation, a concern we’ll be watching closely.

In summary, we share the sentiment expressed by many commentators: this is a politically strategic Budget, but not an economically visionary one. It addresses the electoral narrative but leaves much to be desired in terms of long-term fiscal sustainability.

More detailed analysis of the key announcements follows.