“Finally.”
Australians expressed collective relief last week as the Prime Minister’s 3 May election call brought a welcome end to the first quarter of 2025 defined by election speculation.
The 5-week campaign now underway presents a fresh set of commercial and regulatory challenges for organisations doing business in Australia.
This KWM insight explains:
- What happens until voters chose a new Government.
- What we’re watching on the policy front.
Caretaker mode
Caretaker Alert Summary: The upcoming Federal election in May 2025 has initiated a caretaker period, during which the incumbent government will refrain from making significant policy decisions, entering major contracts, or making key appointments. Businesses should anticipate delays in government decision-making and contract negotiations, as the focus will shift to routine operations. Corporate Commonwealth entities (CCEs) and Commonwealth companies will operate under caretaker conventions but will prioritise their legal obligations. This includes the Australian Taxation Office that will generally refrain from implementing any tax policy changes until after the election. Companies should plan for potential disruptions and delays that could impact significant transactions during this period.
For more detail, read our full alert here.
Impact on FIRB (Foreign Investment Review Board) decision-making
The impending Federal election may significantly affect the processing of Foreign Investment Review Board (FIRB) applications, particularly during the caretaker period. Delays are expected, especially for sensitive applications related to critical infrastructure and high-value proposals, which may extend until mid-2025. If the current government is re-elected, normal processing may resume quickly, but a change in government will likely result in additional delays as new ministers get oriented. An unclear election result and minority government could have further and ongoing delay impacts on FIRB processing. Companies should be aware of these potential delays and plan accordingly for their investment strategies and negotiations.
For more detail, read our full alert here.
Political donations
Political donations – including both monetary and gifts ‘in kind’ – are regulated for transparency and fairness in the political process. Campaign-period specific rules are now in play.
More on what constitutes a ‘gift’ here. The key changes that apply during an election period are:
- The disclosure requirement: If your organisation makes gifts to one candidate or one Senate group that in aggregate exceed $16,900, you must disclose those gifts to the Australian Electoral Commission (AEC) in an election return (not in the standard annual return)
- Disclosure timeline: An election return must be submitted within 15 weeks of polling day (ie by 16 August 2025). This is made public on the Transparency Register 24 weeks after polling day. Expect those returns to be scrutinized by media and other interested parties.
- Foreign donor prohibitions: If your business does not have a significant business presence in Australia, you are generally prohibited from making gifts to a candidate, senate group or political party (subject to limited exceptions). It is also an offence to establish an arrangement to avoid foreign donation restrictions.
Applying these requirements in practice requires a case-by-case assessment of each gift. Did you know:
- a person starts being a ‘candidate’ 6 months before the day they announced/nominated as a candidate?
- attendance at an election function where the commercial value or benefit of attending is equal to the price of the ticket is not disclosable?
- gifts made to political parties or an endorsed candidate’s campaign committee must be disclosed in your annual return (not your election return)?
KWM can help you navigate compliance with the political donations regime – both during an election and throughout the year, including with a user-friendly self-help tool.
Key promises so far and what we’re watching
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LABOR
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COALITION
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Example
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Cost of Living
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The Labor Government will provide $1.8 billion over two years from 2025–26 to continue energy bill rebates of $75 per quarter for eligible Australian households and small businesses until 31 December 2025 as part of its cost-of-living relief measures. |
A Coalition Government will halve the fuel excise for 12 months, and then review it, at a policy cost of $6 billion. Unlike the legislated tax cuts that don’t commence for 15 months (see “Tax” below), the Coalition has committed to halving the fuel excise on the first day that Parliament sits after the election. |
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Tax
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The Government announced in the Federal budget – and has subsequently legislated – two new tax cuts:
Every Australian individual taxpayer will receive an extra tax cut of up to $268 from 1 July 2026 and up to $536 every year from 1 July 2027, compared to 2024–25 tax settings. |
The Coalition has promised to repeal these tax cuts and, instead, halve the fuel excise (see “Cost of Living” above). It is unclear if the Coalition will also commit to scrapping the controversial measure to impose an additional 15% tax on particular ‘earnings’ on superannuation balances above $3 million. A Bill to legislate this measure was before Parliament but, with the calling of the election, this has lapsed. Further, while one of the Government's key tax measures - the extension of the enhanced instant asset write-off measures for 2024-25 – has also now been legislated, there was no mention in the Budget of extending it to future income years. The Coalition has responded by announcing that it will increase the instant asset write-off from $1,000 to $30,000 and to make this arrangement ongoing. |
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Health
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The Government will provide additional funding of $8.4 billion over five years from 2024–25 (and $2.5 billion per year ongoing) to increase access to bulk billing, including $7.9 billion over four years from 2025–26 (and $2.4 billion per year ongoing). The Government will expand eligibility for bulk billing incentives to all Australians from 1 November 2025 and introduce the new Bulk Billing Practice Incentive Program for general practices if they bulk bill every visit under Medicare. Just prior to the Federal Budget, the US lobby group Pharmaceutical Research and Manufacturers of America urged the Trump Administration to consider Australia's Pharmaceutical Benefits Scheme an “unfair trade practice” and to impose “reciprocal” tariffs. The Government has stated that it will not negotiate the PBS. |
The Coalition says it will match those pledges and promises to invest $9.4 billion into health. That includes incentivising junior doctors, as announced by the Coalition last year, to work as GPs to address the current shortages at local clinics. The Coalition has also promised that they will boost Medicare bulk billing, guarantee cheaper medicines and lower the Pharmaceutical Benefits Scheme co-payment to $25. The Coalition has also committed to raising the number of subsidised psychology sessions from ten to 20 and spending an extra $400 million on youth mental health services. The Coalition has also indicated that protecting the PBS is “sacrosanct” in trade negotiations with the United States. |
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Defence
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Defence Budget for 2025 is $51.5bn -6.6% of the total Budget. This includes Defence capability investment – an additional $50.3bn for the Integrated Investment Program over the next decade. Labor’s stated policy goal is to increase Defence expenditure to 2.3% of GDP by early 2030s. |
In his Budget-in-reply speech (see here), Opposition leader Peter Dutton promised the Coalition will announce a “significant funding commitment to defence” during the election campaign. Coalition has revealed its policy goal of increasing Defence expenditure by up to 2.5% of GDP by 2029. |
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Jobs & Education
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The Government will reduce outstanding student debts by 20%, which will remove $16 billion in debt, and will make the repayment system fairer by moving to a marginal repayment system with a higher minimum repayment threshold. The Government will ban non‑compete clauses for workers earning less than the high-income threshold in the Fair Work Act (currently $175,000). This could increase affected workers’ wages by up to 4 per cent or $2,500 per year by freeing many Australian workers to move to more productive, higher‑paying jobs and start their own business. |
The Coalition has committed to introducing the Guaranteed Funding for Health, Education and Essential Services Bill (plus three other critical pieces of legislation) on the first sitting day of the next Parliament. The Coalition has set a target of 400,000 apprentices and trainees in training across Australia and has promised to provide small and medium businesses with $12,000 to support them to put on a new apprentice or trainee in critical skills areas for the first two years of their training. The Coalition has not yet formed a view on whether to proceed with the non-compete clauses. |
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Energy
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The Prime Minister says Australia already has power to divert gas if needed, under the Australian Domestic Gas Security Mechanism (introduced by the previous Coalition Government). In May 2024 the Government released a medium and long-term strategy that establishes the role gas will play in the transition to net zero by 2050. Additional gas polices may be announced in the coming weeks. Labor has committed to boost renewables to 82% of the grid by 2030 and plans to unlock $8 billion of additional investment in renewable energy and low emissions technologies through a $2 billion expansion of the Clean Energy Finance Corporation. |
The Coalition has announced its National Gas Plan which “will prioritise domestic gas supply, address shortfalls, and reduce energy prices for Australians”. The Coalition will immediately introduce an east coast gas reservation to secure an additional 10 to 20% of the east coast’s gas demand for domestic use, which would otherwise have been exported. The Coalition’s nuclear power policy is a key differentiator between the two main parties. While initial costings were released in late 2024 ($300 billion) based on the first power plant operational by 2036, the path to delivery of that plant is less clear. As is the impact on the current investments into clean energy transition, although Rewiring the Nation and Production Tax Credits for hydrogen are in the firing line. The Plan also includes reinstating $300 million Strategic Basin Plan and investing $1 billion into a Critical Gas Infrastructure Fund to increase gas pipeline and storage capacity. The Opposition has also promised to:
The Coalition believes these measures will support the transition to nuclear by the mid to late 2030s. |
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ESG & Future Made in Australia
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Building on the Government’s existing $22.7 billion Future Made in Australia agenda – including the enactment of the Future Made in Australia legislative framework and legislating $13.7 billion in hydrogen and critical minerals production tax incentives in late 2024 / early 2025 – the Government announced in the Federal budget:
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The Coalition has reiterated that it will look to scrap the Government’s production tax credits for green hydrogen if elected. It remains unclear whether it will also look to scrap the production tax credits for critical minerals, and perhaps even the Future Made in Australia framework more generally. |
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Industry Assistance
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The government will freeze the indexation on draught beer excise for two years. The Federal and South Australian Governments have committed $2.4 billion to supporting the Whyalla Steelworks, currently in administration.
The Government is also providing up to $130 million in secured loans to keep Rex Airlines operational during its extended voluntary administration to 30 June 2025, while a competitive sale process is held. The Government has pledged $2 billion (over 19 years) to assist aluminium smelters to transition to renewable energy, with payments to be available from 2028-29 for a period of 10 years. The credits will be issued pursuant to an emissions-linked credit contract, which will be tied to the amount by which aluminium smelters reduce scope 2 emissions with the intention of the regime to encourage smelters to shift to renewable electricity before 2036. |
Consistent with its stance on other ‘green’ and ‘renewable energy’ measures, (see above) the Coalition opposes the Government’s proposed green aluminium production credit scheme. |
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Housing
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Banning foreign persons (including temporary residents and foreign‑owned companies) from purchasing established dwellings for two years from 1 April 2025, unless an exception applies (such as investments that significantly increase housing supply or support the availability of housing on a commercial scale, and purchases by foreign‑owned companies to provide housing for workers in certain circumstances). This measure is supported by additional ATO funding of $5.7 million over four years from 2025–26 to enforce the ban. The temporary ban has apparent unintended implications for commercial real estate (including Build to Rent), agricultural and energy and resource sectors. We hope both the Government and Coalition meaningfully engage with business to address the apparent oversights and to reflect the policy of increasing housing supply. |
The Coalition will support the Government’s measure to ban foreign investors and temporary residents from purchasing existing Australian homes for a period of two years. Note: see ‘Facilitating investment – a sensible focus on economic security (below) for analysis of both parties’ positions on foreign investment. |
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Technology & Digital
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The Government will continue to support a number of key initiatives:
The Government’s regulatory push on high-risk AI appears to have slowed, while it has focused on big bets on quantum technology as a key pillar of their innovation policy and national quantum computing strategy. |
Based on Opposition Leader Peter Dutton’s statements in June 2024, we expect that the Coalition will support the social media minimum age requirements. Similarly, based on his Budget-in-reply speech, the Coalition intends to encourage new areas of the economy like artificial intelligence, automation, cyber security, space, and bio and nanotechnologies. |
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Public service
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Continued investment into increasing staff numbers and capability, through recruitment, minimising outsourcing and conversion of contractors to employees. |
Slash 36,000 jobs – and do more with less. While no DOGE, we can expect to see higher expectations for those remaining and potentially some influence from overseas in expectation setting. |
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Facilitating investment - a sensible focus on economic security
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Establish a new ‘Front Door’ for investors with major transformational proposals to make it simpler to invest in Australia and attract more global and domestic capital. Act as a single‑entry point for investors, providing priority projects with coordinated facilitation services, guided by an Investor Council. Read our analysis of the Government’s (May 2024) changes to streamline FIRB for frequent users here, and analysis of what FIRB conditions on M&A transactions mean for dealmakers here. |
Establish new agency “Investment Australia” as an umbrella organisation of FIRB, the Major Project Facilitation Agency and Takeovers Panel. Facilitate investment and call in powers to reduce delays, for non-sensitive commercial applications including financial services, construction, energy and resources (including nuclear). Streamline FIRB approvals for 5 Eyes + Japan + India. |
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You can find our full analysis of the 2025-2026 budget here.
