Treasurer Jim Chalmers handed down the Federal Budget on Tuesday 12 May 2026. For small business the headline measures are genuinely useful; the catch is timing. The two biggest wins start from 1 July 2026 at the earliest and every measure in this update is an announcement, not law. Until legislation passes Parliament, nothing changes for the financial year ending 30 June 2026.
The instant asset write-off goes permanent (from 1 July 2026)
The Budget announced that the $20,000 instant asset write-off will be made permanent from 1 July 2026. The threshold applies per asset and covers businesses with aggregated turnover under $10 million. The government puts the compliance saving at about $32 million a year.
One point matters more than any other. Until legislation passes, the law for this financial year is unchanged: the $20,000 threshold applies to 30 June 2026. If you are planning asset purchases around the write-off, work to the current rules, not the announcement.
Loss carry-back returns, permanently
The Budget announced a permanent two-year loss carry-back for companies with turnover up to $1 billion, applying to income years starting 1 July 2026. The amount is capped by the company’s franking account balance. The government expects about 85,000 companies to benefit. For companies coming off a strong year into a softer one, this is the most significant structural measure in the Budget. Again, it needs legislation before anyone can rely on it.
The slower-burn measures: 2027 and 2028
Several measures land further out:
- A permanent $250 Working Australians Tax Offset from 1 July 2027, which the government says will benefit around 1.5 million sole traders.
- A $1,000 instant work-expense deduction, with no receipts required, from 2027-28.
- An opt-in to monthly PAYG instalments from 1 July 2027.
- Free access to Australian Standards, worth up to $1,600 a year per business.
- The removal of 497 nuisance tariffs.
- Start-up loss refundability from 1 July 2028: companies under $10 million turnover in their first two years could convert losses to a refundable offset, capped at the PAYG withholding and FBT they have remitted.
- Changes to the R&D Tax Incentive from 1 July 2028: the core offset rises by 4.5 percentage points, the minimum spend threshold rises from $20,000 to $50,000 and the expenditure cap rises from $150 million to $200 million.
The dates are the message. None of these touch the current financial year and the 2028 measures are two budgets away from mattering.
Fuel and energy
The Budget includes temporary fuel excise relief in response to the oil shock, alongside a $10.7 billion long-term fuel security package. There is no new energy bill relief; the Energy Bill Relief Fund ended on 31 December 2025 and was not revived.
The Budget also flagged bigger-picture tax reform, including changes to the CGT discount and negative gearing, which sits outside the scope of this update.
The Industry Growth Program pause
Also on Budget day, the Industry Growth Program was paused to new applicants from 12 May. We will cover what that means for grant planning in a separate update.
What this means for your EOFY
Nothing in this Budget changes the year ending 30 June 2026. The $20,000 instant asset write-off remains law to 30 June 2026; the announced permanent threshold from 1 July 2026 is not yet law. Plan EOFY decisions on the rules as they stand and treat every Budget measure as conditional until it passes Parliament. The Budget papers are at budget.gov.au.
Before you act
This update is general information only; it is not tax or financial advice. Budget measures are announcements, not law, until legislation passes Parliament. Confirm how any measure applies to your circumstances with a registered tax agent before acting.