Federal Budget – Key Measures for Business

The 2026–27 Federal Budget contains some of the most significant proposed tax reforms in recent years, with major changes announced around capital gains tax, trusts and investment structures. Importantly, many of these measures are still subject to consultation, Senate review and potentially future election outcomes, meaning the final legislation and commencement dates may change. Already following strong feedback from the business community, the Government announced on 18th June that a number of targeted carveouts and concessions for small businesses and startups will be made as well as for testamentary discretionary trusts.

The measures announced are expected to significantly increase compliance complexity for taxpayers, businesses and advisers over the coming years. Key proposed commencement dates include 1 July 2027 and 1 July 2028.

1. Increased ATO Compliance and Integrity Focus

Consistent with previous budgets, the Government continues to invest heavily in ATO compliance programs and data-matching activity. Businesses should expect:

• greater scrutiny of payroll and superannuation compliance
• increased GST and BAS review activity
• stronger debt collection activity
• continued focus on contractor arrangements and trust structures
• expanded use of real-time data through Single Touch Payroll and digital reporting systems

You may have already received an email from Archer in relation to Audit Shield. This is an offering being requested by clients, but also Archer’s way of helping to risk manage your business from this additional compliance activity. Please read through the information sent and in this newsletter and contact us if you’d like to discuss further.

The Government’s continued focus on tax integrity reinforces the importance of:

• accurate record keeping
• timely lodgements
• cashflow forecasting for tax obligations
• proactive tax planning and governance

Archer’s Fractional CFO/COO advisory offering can help you to navigate this. Please contact our Principal Stacey Quinn to discuss further how we may be able to assist.

2. Capital Gains Tax Changes (including Small Business CarveOuts)

A major proposed reform remains the replacement of the current 50% CGT discount with an indexation methodology from 1 July 2027.

Under the broader CGT reform proposal:

• gains accrued before 1 July 2027 may still access the existing 50% discount
• gains after this date may instead use indexed cost bases
• additional concessions may apply for eligible small businesses and innovation-focused entities

The announced changes could materially impact:

• investment decisions
• property ownership structures
• timing of asset disposals
• retirement and succession planning

However, the Government confirmed on the 18th June there will be several important carveouts for small businesses and startups:

• the small business 50% active asset reduction threshold will be increased from $2 million to $10 million turnover, significantly expanding eligibility
• a new innovation/startup CGT concession is proposed, expected to provide additional tax relief for founders, employees and early-stage investors in qualifying innovative businesses.

3. Trust Tax Measures – Updated Position

The Budget initially proposed a new 30% minimum tax on capital gains and certain trust structures.

However, following consultation and feedback, the Government has confirmed key carveouts:

• testamentary trusts will be exempt from the proposed 30% minimum tax, including future discretionary testamentary trusts
• broader trust measures remain subject to refinement and ongoing consultation

If legislated in its current or amended form, these reforms may still significantly alter:

• investment structuring
• discretionary trust planning
• family group distributions
• long-term asset holding strategies

We anticipate these proposals to continue to evolve through consultation and Senate review before implementation.

4. Increased ATO Compliance and Integrity Focus

Consistent with previous budgets, the Government continues to invest heavily in ATO compliance programs and data-matching activity. Businesses should expect:

• greater scrutiny of payroll and superannuation compliance
• increased GST and BAS review activity
• stronger debt collection activity
• continued focus on contractor arrangements and trust structures
• expanded use of real-time data through Single Touch Payroll and digital reporting systems

You may have already received an email from Archer in relation to Audit Sheild. This is an offering being requested by clients, but also Archer’s way of helping to risk manage your business from this additional compliance activity. Please read through the information sent and in this newsletter and contact us if you’d like to discuss further.

The Government’s continued focus on tax integrity reinforces the importance of:

• accurate record keeping
• timely lodgements
• cashflow forecasting for tax obligations
• proactive tax planning and governance

Archer’s Fractional CFO/COO advisory offering can help you to navigate this. Please contact our Principal Stacey Quinn to discuss further how we may be able to assist.

Capital Gains Tax Changes

A major proposed reform is the replacement of the current 50% CGT discount with an indexation methodology from 1 July 2027.

Under the proposal:

• gains accrued before 1 July 2027 may still access the existing 50% discount
• gains after this date may instead use indexed cost bases
• new residential property investors may potentially have a choice between methods

The announced changes could materially impact:

• investment decisions
• property ownership structures
• timing of asset disposals
• retirement and succession planning

Proposed 30% Minimum Tax on Capital Gains and Trusts

The Budget also announced proposals introducing a:

• minimum 30% tax rate on net capital gains; and
• minimum tax settings applying to trusts.

If legislated, these reforms may significantly alter:

• investment structuring
• discretionary trust planning
• family group distributions
• long-term asset holding strategies

We anticipate these proposals to generate substantial consultation and possible amendment before implementation.

Changes to Negative Gearing

Another significant proposed reform is the restriction of negative gearing to newly constructed properties from 1 July 2027.

Under the proposal:

• existing negatively geared investments may be grandfathered
• future negatively geared established properties may only offset losses against rental income or residential property capital gains
• excess losses may need to be carried forward

This could materially impact property investment strategies, cashflow modelling and future housing market behaviour.

Pre-CGT Assets Entering the Tax System

The Budget also announced that assets acquired before 20 September 1985 (“pre-CGT assets”) may become subject to CGT on gains arising from 1 July 2027 onwards.

Owners of pre-CGT assets may need to consider:

• obtaining market valuations prior to commencement
• succession and estate planning implications
• disposal timing strategies
• restructuring considerations

This represents a substantial long-term structural tax change for many taxpayers and family groups.

Instant Asset Write-Off and Business Investment

The Government also announced that the instant asset write-off would be made permanent, providing ongoing support for eligible small business investment and certainty around capital expenditure planning.

Electric Vehicle and FBT Changes

Further refinements to the fringe benefits tax exemption for electric vehicles were also announced. Businesses with novated leasing programs or EV fleets should monitor these developments as detailed rules emerge.

How Archer Can Help

Given the scale of the proposed reforms, businesses and investors should begin considering:

• structure reviews
• trust distribution strategies
• investment holding entities
• succession planning
• capital gains tax modelling
• payroll and superannuation readiness
• cashflow management for tax liabilities

We expect significant further guidance and legislative refinement over the coming months and will continue providing updates as detail becomes available.

South Australian State Budget – Highlights

The 2026–27 South Australian Budget delivered a strong focus on cost-of-living relief, education investment, housing supply and reducing regulatory burden, while avoiding the introduction of new state taxes.

Record Cost of Living Relief

The State Government announced a $500 million cost-of-living package described as the largest in South Australia’s history. Measures are expected to provide relief to households and may indirectly support broader consumer spending and business confidence.

No New State Taxes

Importantly for business, the Budget confirmed:

• no new state taxes
• no increases to RevenueSA administered taxes, levies or duties

This provides some certainty for businesses managing increasing operating costs and interest rate pressures.

Red Tape Reduction Review

The SA Productivity Commission will undertake a Red Tape Reduction Review aimed at streamlining business dealings with government and reducing regulatory burden.

This initiative may eventually provide:

• simpler compliance processes
• reduced administrative burden
• more efficient government interaction for businesses

Housing and Property Measures

Key property-related initiatives include:

• full stamp duty relief for eligible seniors aged 60+ downsizing to new homes up to $2 million
• additional housing and development support measures to increase supply

These measures are expected to stimulate housing activity and development across the state.

Education and Workforce Investment

The Budget includes significant investment in education and workforce capability, including:

• fee-free public schooling from reception through to graduation from 2027
• STEM pathway funding
• early employment support for student teachers

These initiatives are intended to strengthen long-term workforce participation and productivity within South Australia.

South Australia Land Tax – 2026–27 Update

The South Australian Government has released updated land tax thresholds, effective from 1 July 2026, reflecting movements in property site values.

The new thresholds are:

• Threshold A: $936,000
• Threshold B: $1,504,000
• Threshold C: $2,188,000
• Threshold D: $3,504,000

For land held in trust, a lower starting threshold of $25,000 continues to apply before standard thresholds.

There has been no change to land tax rates, however movements in property values may impact overall liabilities.

Clients holding investment property or land in trust structures should review their position ahead of the new year.