Looming election offers reprieve from regulatory uncertainty
Accountants may be spared from further reforms in 2025 with the Federal Election expected to occur by May, according to a tax expert.
The federal budget has been scheduled for March 2025, a clear indication that an election would likely occur before the usual release of the budget in May.
Head of tax education at Accurium and TaxBanter, Lee-Ann Hayes, said tax agents could provide a reprieve from any unexpected tax reforms in 2025.
Speaking at the Tax Practitioners Day hosted by Accurium, Hayes shared her predictions that unforeseen tax announcements from the government or Treasury were unlikely.
“We have got government bringing the federal budget forward, which to me signals an election sometime before May,” she said.
“This is quite interesting, as from a tax front, usually that means that everything just stops. We won’t see the big scale changes or any new big announcements from what we know is coming.”
Hayes also noted from a government perspective that if an early election were on the agenda, proposing tax changes would be unwise.
“I think the government has learned from past mistakes, with going into an election with a tax plan or proposal for reform.”
“So, what I am expecting to see in 2025 is a lot of the continuation of the compliance discussions coming out of the Tax Office.”
Hayes outlined the expected upcoming legislative changes for tax in 2025, including CGT withholding, changes to amendment periods, GIC and SIC deductions, Division 296, and an increase in the super guarantee rate.
Hayes said CGT withholding legislation had been passed by the House of Representatives but was yet to be passed by the Senate. If passed this week within parliament, the new withholding rate of 15 per cent up from 12.5 per cent would apply from January 1 2025.
However, if not passed this week, the new withholding rate would not be introduced in January, Hayes said.
Along with discussions on other tax introductions, Hayes said payday super, set to be introduced in July 2026, was a major point her clients continued to enquire about.
Hayes said the proposed legislation was “all about narrowing the super guarantee pay gap” and would require employers to meet the Tax Office’s obligations.
“Even though it is still quite a long way down the track, it is causing some concern for accountants and what it means for their clients,” she said.
“The biggest concern would be cash flow implications. If you’re not a high cash business and you transition into payday super, that will probably be the part with the biggest impact.”
In the webinar, Hayes also touched on ATO consultations and hot topics which was recommended for all accountants to keep an eye on.
ATO ‘hot topics’ for 2025 included professional services income, debt collection and trust issues.
About the author
