Labor Or Liberal: How The Business Landscape Could Change After The Elections

As Australia prepares for the upcoming federal election, business owners across the country are keeping a watchful eye on potential policy shifts that could reshape the commercial landscape. With the Labor Party and the Coalition (Liberal/National) presenting distinct visions for Australia’s economic future, understanding these differences is crucial for businesses of all sizes.

Whether you’re running a small family business or managing a growing medium-sized company, the outcome of this election could significantly impact everything from your day-to-day operations to your long-term growth strategy. Let’s explore what each party is proposing and how these policies might affect your business.

Business Incentives, Support, and Deregulation

The fundamental differences between Labor and the Coalition stem from their core political and economic philosophies, which naturally extend to their approach to business policy. When it comes to practical policy measures, both parties offer distinct packages of support and incentives for businesses.

Labor’s Collaborative Approach

The Labor Party emphasises a coordinated, whole-of-government strategy for supporting businesses, particularly small and medium enterprises. Their vision centres around creating a cohesive business environment through collaboration between federal, state, and territory governments, while amplifying the voice of small business in policy development processes by engaging decision-making bodies like departments and commissioners. This is best exemplified by their National Small Business Strategy, which aims to create a more integrated approach to supporting Australia’s SME sector.

Labor’s National Small Business Strategy represents a $640 million investment in coordinated support across all levels of government. Rather than focusing primarily on deregulation, Labor emphasises:

• Policy coordination to ensure businesses receive consistent support regardless of location
• Targeted financial assistance for innovation and growth initiatives with plans to extend the $20,000 Instant Asset Write Off for 12 months if re-elected. This allows small businesses to deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2026
• Compliance frameworks designed to create fair marketplace conditions

Coalition’s Deregulation Focus

In contrast, the Coalition prioritises deregulation and lesser government intervention, with direct incentives for business growth and development. They plan to cut unnecessary bureaucratic processes to accelerate project approvals and reduce tax burdens on businesses to stimulate economic activity. The Liberal-National Coalition traditionally positions itself as the party of business, with a strong emphasis on creating conditions where enterprises can thrive with minimal government interference.

The Coalition’s approach leans heavily toward direct tax incentives and deregulation, including:

• Continuation and possible expansion of instant asset write-off provisions (up to $30,000)
• New deductions for business expenses, including meal expense deductions
• Targeted subsidies for businesses taking on apprentices with $12,000 to hire and train a new apprentice or trainee in critical skills areas
• A strong commitment to cutting “red tape” and streamlining regulatory requirements

The Coalition has pledged to halve project approval times and significantly reduce compliance burdens, which could benefit businesses engaged in development and infrastructure projects.

Economic Priorities and Industry Focus

The parties demonstrate distinctly different visions for Australia’s economic future through their industry and infrastructure priorities.

Labour’s Future-Focused Approach:

Labor’s industry policy tilts toward emerging and sustainable sectors:

• Prioritises emerging and sustainable sectors like clean energy, renewables, and advanced manufacturing
• Invests in clean energy infrastructure and supports businesses transitioning to a low-carbon economy
• Aligns infrastructure spending with broader environmental and economic objectives

Their focus appears to be on positioning Australia for emerging economic opportunities while managing the transition toward a lower-carbon economy. For businesses in the renewable sector, this could present significant opportunities, while those in traditional energy may face transition challenges.

Coalition’s Traditional Strengths Strategy:

The Coalition tends to emphasise support for:

• Established resource industries including mining and agriculture
• Traditional manufacturing sectors and construction
• Re-establishing industry watchdogs like the Australian Building and Construction Commission

They position themselves as taking a more ‘balanced’ approach to energy, proposing:

• A diverse energy mix including renewables, gas, and potentially nuclear power
• Prioritising energy affordability and reliability for businesses
• Accelerating infrastructure projects by cutting approval times
• Investing in productivity-enhancing assets and housing development

Their promise of cheaper, more reliable energy could benefit businesses across all sectors, particularly those with high energy consumption.

Skills, Workforce, and Training

With skills shortages affecting businesses across numerous sectors, both parties recognise the importance of workforce development—though they approach it differently.

Labor’s Long-term Workforce Planning

Labor advocates for better coordination in workforce policy, with:

• Long-term planning mechanisms and a framework to address structural skills gaps
• Collaborative approaches involving industry, education providers, and government leading to more relevant policies
• Integration of workforce development with broader economic planning
• Upskilling and training incentives including free TAFE access, allowing Australians to acquire qualifications and enhance workforce capabilities

Their National Small Business Strategy includes specific provisions for addressing skills shortages through coordinated action rather than simply incentivising employment.

Coalition’s Immediate Skills Incentives

The Coalition’s approach is more direct and immediate:

• A $12,000 subsidy for SMEs hiring apprentices or trainees in critical skills areas
• A target of 400,000 apprentices and trainees in training
• Focus on addressing current skills shortages rather than long-term structural planning

This approach could provide immediate relief for businesses struggling to find qualified staff, though questions remain about its ability to address systemic workforce challenges.

Their promise of cheaper, more reliable energy could benefit businesses across all sectors, particularly those with high energy consumption.

Compliance and Regulatory Framework

The parties also diverge in their approaches to business competition and regulatory compliance.

Labour’s Fairness Emphasis

Labor places greater emphasis on:

• Creating a level playing field through regulatory frameworks
• Increased Australian Taxation Office funding to close loopholes
• Ensuring larger businesses meet their compliance obligations

This approach aims to create fairer market conditions, though some businesses may experience increased compliance requirements.

Coalition’s Small Business Focus:

The Coalition emphasises:

• Competition policy specifically designed to benefit small businesses
• Reduced regulatory scrutiny for SMEs
• A more business-friendly compliance environment with fewer demands on small enterprises

This could reduce administrative burdens for smaller businesses while potentially creating different compliance expectations based on business size.

Preparing Your Business for Either Outcome

With the election still ahead, prudent business owners should prepare for either potential outcome. Consider reviewing your business strategy to identify potential risks and opportunities under each party’s policies and assessing your current and future workforce needs in light of proposed skills and training initiatives. Evaluating your energy usage and costs, and how different energy policies might affect your operations would also be prudent, as well as making sure you understand how changes to tax incentives and deductions could impact your financial planning.

Regardless of which party forms government, businesses that stay informed and adaptable will be best positioned to navigate the changing policy landscape.

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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.