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Mixed reactions have poured in over Treasurer Jim Chalmers’ pre-election budget, with some applauding the initiatives and others labelling the budget as insufficient in a variety of ways.
Treasurer Jim Chalmers handed down his fourth federal budget on Tuesday (25 March), which, if not for Cyclone Alfred, reportedly wouldn’t have been delivered by the Labor government as the plan for an April election was scrapped.
The budget was quickly met with a mixture of reactions from heavy-hitters spread across the Australian workplace – perhaps highlighting the growing allegiances attached to the upcoming federal election, which must take place on or before 17 May 2025.
The effects, or non-effects rather, that the newly compromised budget will have on small businesses and employees were key takeaways.
‘Underwhelming for business’
Business NSW chief executive Daniel Hunter, like many critics, was quick to label the budget as “underwhelming” – claiming the budget lacked the “vision” that businesses and the economy require.
“Being so close to the federal election, this budget lacks the vision that business – and the Australian economy more broadly – needs right now. There is scant mention of business, tax reform, and the need to improve lagging productivity,” Hunter said.
“The federal government has more than $1 billion stashed in its back pocket for 2025–26 under ‘decisions taken but not announced’.
“Small and medium-sized enterprises must be at the centre of any serious economic growth agenda and at the forefront of Australia’s response to rapidly changing global trade and geopolitical conditions. Just as households struggle with a once-in-a-generation cost-of-living crisis, SMEs face a cost of doing business crisis.”
Ben Thompson, chief executive at Employment Hero, who’s previously been extremely critical of what he deems as “compliance burdens” for small businesses, once again hit out at “red tape” measures that are drawing SMBs’ focus away from growth.
“We’re disappointed to see that there was no change to Fair Work’s definition of a small business, as the current definition is too restrictive,” he said.
“Capping it at 15 employees doesn’t reflect reality – when businesses with up to 25 employees face the same challenges but get hit with compliance-heavy regulations designed for much larger companies.
“Raising the business threshold to 25 employees would not only benefit over 46,000 businesses but also ease their burden, letting them focus on growth instead of red tape.”
CPA Australia chief executive Chris Freeland AM shared Thompson’s disdain for “over-regulation” and “red tape”, arguing the budget does nothing to “offset the pain” Aussie SMBs are currently experiencing.
“Businesses and their advisers will find little in the federal budget that will help offset the pain all too many small businesses have been experiencing.
“The budget lacks ambition and a thorough understanding of what business needs. Not enough is being done to slash red tape or create the conditions and improve policy development that would shift the dial on Australian productivity and competitiveness,” Freeland said.
“SMEs – many of which have thin margins – needed a budget that would significantly alleviate the cost pressures they face every day.”
Freeland said that if the budget had taken a more “business-centric” approach, it would have “benefited all Australians because small businesses are significant contributors to the economy and job creation”.
“The instant asset write-off is a prime example. Tonight, it should have been made permanent – but it remains in limbo. Making it permanent would provide the certainty and opportunity businesses need to invest and grow. They cannot make serious long-term financial decisions when the rules could change every year.”
Mixed bag on benefits for employees
In terms of the direct benefits of the budget for workers, it goes without saying that the banning of non-compete clauses is a win for more than 3 million Australian workers.
“Banning non-compete clauses and closing wage-capping loopholes open new doors for workers and recruiters alike,” Martin Herbst, chief executive at JobAdder, said.
“Workers can now pursue better jobs or start their own ventures without contract constraints … That said, enforcement and industry impact remain key concerns. A more open job market is a win, but the transition won’t be without challenges.”
Both the aged-care workforce and early childhood workforce are in line for pay rises under the new budget – with plans to invest $2.6 billion for aged-care nurses and a $3.6 billion wage increase for early childhood workers.
“The government’s $3.6 billion investment in early childhood education wages is a crucial step towards attracting and retaining skilled educators. Higher pay will help bring in talent, improve retention, and create more stability for children, families, and providers,” Herbst said.
“However, wages alone won’t solve workforce shortages. Ongoing support, training, and clear career pathways are just as important for a sustainable sector.”
Health Services Union national secretary Lloyd Williams praised the changes to the Medicare budget but argued that more needed to be done for workers in the health sector.
“Labor has a real plan to make health cheaper for everyday Australians, cut wait lines for critical health services, and reduce the gender pay gap, all while taking the pressure off frontline health workers,” Williams said.
“But there’s unfinished business, with disability workers desperately needing a fair pay rise to stop them leaving the sector in huge numbers.”
Despite the praise, Thompson believes the budget “doesn’t do much” for more employees, following the disenchanted theme towards hopes that Chalmers would have delivered more substantial approaches.
“This budget offers employees some important wins: tax cuts will put more money in pockets, and wage increases in aged care and early childhood education will help those sectors retain workers,” Thompson said.
“But for most employees, it doesn’t do much to drive real wage growth or long-term career security. There’s no broad support for upskilling, no incentives for businesses to invest in their workforce, and no major reforms to modernise workplace conditions.”
“If we want a stronger, more resilient workforce, we need policies that go beyond short-term relief and focus on future-proofing jobs and skills.”
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
