TAX CARVE-OUT FOR BUSINESS; MIGRATION DIPS
CGT backdown for small business and start-ups
Prime Minister Anthony Albanese has announced major changes to the capital gains tax reforms unveiled in the May Budget, with special concessions for small businesses and innovative start-up ventures. With Treasurer Jim Chalmers, the PM flagged a reinstatement of the 50 per cent CGT discount to early-stage investors, including founders and employee share scheme participants in start-ups. In addition, the government announced an increase, from $2 million to $10 million, in the turnover threshold for the existing small business 50 per cent active asset CGT reduction. Mr Albanese said that all 2.7 million active small businesses and 98 per cent of all active businesses would be eligible for this concession. In addition, the PM confirmed that income from all types of testamentary trusts would be exempt from the proposed 30 per cent minimum tax. The latest amendments will be incorporated into legislation presently before Parliament.
Surgeons, property investors head tax rankings
Meanwhile, the Australian Taxation Office collected almost $631 billion in tax revenue in 2023-24, with just over half the contribution from individuals. Companies paid more than $144 billion or 22.7 per cent of the tax haul, with the goods and services tax reaping more than $85 billion, or 13.6 per cent. The figures for the latest available year are revealed in the ATO’s Taxation Statistics, which found that net capital gains reported by individuals rose from $37.8 billion to $40.6 billion, with the biggest source of capital gains for individuals derived from real estate. Superannuation funds paid $32.7 billion in income tax, the report found. In addition, the ATO said that for the last 15 years, surgeons had remained the highest-paid occupation, with the 4280 individuals reporting an average taxable income of almost $520,000 in 2023-24.
WA leads nation in population growth
Australia’s population edged toward 28 million over 2025, as the nation grew by 1.5 per cent or by more than 400,000 people. Figures from the Australian Bureau of Statistics show that annual net overseas migration of 301,000 – while easing by nine per cent – made up almost 73 per cent of the total population increase to 27.8 million. All states and territories registered an increase in population, with Western Australia the fastest (2.2 per cent) and Tasmania the slowest, at 0.5 per cent, over the 12 months to December 2025. WA and Queensland, however, were the only states or territories to record an increase in annual net interstate migration.
RBA holds on cash rate, warns on embedded inflation
The Reserve Bank of Australia has kept the cash rate target at 4.35 per cent but again warned that inflation was too high, with the effect of higher fuel prices continuing to flow through to goods and services. In its Monetary Policy Board statement, the RBA said financial conditions were tighter after three increases in the cash rate target. Growth in demand needed to slow to reduce capacity pressures and help bring inflation back to target (2-3 per cent). The RBA board said it remained focused on ensuring that inflation did not become embedded once the impulse from higher oil prices had passed through. In the most recent Consumer Price Index, trimmed-mean inflation (the RBA’s preferred measure of inflation) rose to 3.4 per cent.
China, resources maintain exports domination
China easily remained Australia’s largest export and import markets in 2025, with iron ore again the dominant export, according to the latest trade figures. In 2025, Australia exported more than $195 billion and imported $130 billion in goods and services, as recorded by the Department of Foreign Affairs and Trade. Exports to China eased slightly but imports from China rose 12.5 per cent over the year. Japan ($65 billion) and the United States – which recorded a 46 per cent rise to almost $60 billion – were the next largest export markets. The US ($98.5 billion) and Japan ($32 billion) were the largest import sources by size after China. Iron ore and concentrates accounted for $121 billion in exports, well ahead of coal ($64 billion) and natural gas (almost $60 billion), just edging out gold exports, which soared by 66 per cent to $59.5 billion. Personal travel (excluding education-related) was the top-ranking import ($68.5 billion), ahead of refined petroleum and passenger motor vehicles. Gold imports soared by 108 per cent, to $20.6 billion.