2025 Budget vs Coalition Predecessors – A Small Business Perspective

The Opposition’s Budget Response: Critique and Alternative Vision

The official Liberal Party response to the 2025 Budget pulled no punches in condemning the government’s fiscal stewardship. In a statement titled “A budget for the next five weeks, not the next five years,” Shadow Treasurer Angus Taylor painted Labor’s budget as a failure on multiple fronts​. He asserts that “living standards have suffered the biggest collapse on record” under this government, leaving Australians “poorer after three years of Albanese Labor”​. Taylor’s critique centres on the idea that Labor’s budget is an election-year sugar hit that ignores underlying economic problems. Key charges from the Opposition include:

• Short-term focus: Labeling the tax cuts and handouts as an “election bribe by a weak Prime Minister” that offers mere cents a day in relief​. The Opposition argues the budget does little to immediately alleviate families’ financial stress (e.g. “Seventy cents a day… is not going to help address the financial stress [of] Australian families”​) and instead times benefits to the other side of the election. This implies a lack of genuine commitment to improving livelihoods now.
• Fiscal profligacy: Taylor claims “Labor has lifted spending by $425 billion” in its term​, an enormous expansion that the Coalition insinuates is wasteful. He highlights that deficits persist indefinitely and warns that “inflation is staying higher for longer under Labor”​– essentially accusing Labor of stoking an inflationary fiscal policy. (It is worth noting that the Coalition’s budgets projected ongoing deficits, but the Opposition is framing Labor’s additional spending choices as the culprit for extended inflation.)
• Public service and regulation: The Opposition notes there are 41,000 more public servants in Canberra now “at a time when services have not improved.”​ This digs at Labor’s expansion of government bureaucracy. Similarly, they decry Labor’s approach to energy and migration as poorly managed (e.g. “migration is out of control”​), suggesting the government is not effectively planning for housing and infrastructure needs. All these points underpin the Coalition’s broader narrative that Labor is inept and “incompetent” in economic management​.
• Lack of productivity agenda: Perhaps surprisingly, the Opposition finds common ground with some economists’ concerns on the issue of productivity. They cite “Labor’s own budget papers” to say the economy will be weaker due to failure to boost productivity, noting “productivity has collapsed by 6% under Labor” with nothing in the budget to reverse it​. The Coalition posits that its government would do better by fostering business-led growth and investment (though specific productivity measures in their critique are thin, aside from cutting red tape).

What is the alternative vision the Coalition offers? In broad strokes, Taylor and Dutton promise a return to what they brand as responsible, long-term thinking: “A Coalition Government will always better manage the economy so we can pay for essential services and keep our country safe”​. Concretely, this means lower taxes (they pledge taxes will “always be lower under a Dutton government”​), targeted spending restraint, and pro-business reforms. Dutton’s campaign promises (as discussed) include making the instant asset write-off more generous and permanent, repealing parts of Labor’s industrial relations laws, and likely maintaining Stage 3 tax cuts in full. On the budget’s contentious tax cuts for 2026, the Coalition has drawn a line: they would vote against them. This could be read as fiscally hawkish (not endorsing a $17 billion tax expenditure without a way to pay it) or politically opportunistic (denying Labor a victory while hinting they will devise their own tax relief later). Either way, the Opposition is gambling that voters – especially small business owners and higher-income professionals in their base – prefer a vision of bigger, structurally lower taxes and spending discipline rather than Labor’s temporary and delayed measures.

From the perspective of small businesses and sole traders, the Liberal opposition’s critique hits some sympathetic notes. Many business communities feel the 2025 Budget is “designed for an election” rather than tackling long-term challenges​. For instance, the Australian Chamber of Commerce and Industry welcomed the tax cuts but lamented the lack of ambition on productivity and tax reform beyond the election cycle​. The Opposition’s promises to “get Australia back on track” by cutting regulatory burdens and providing certainty (in tax policy, energy, and industrial relations) resonate with small business operators who often cite compliance costs and unpredictability as key concerns. A tangible example is the instant asset write-off: a permanent $30k write-off, as pledged by Dutton​, would give small firms more confidence to plan investments each year instead of lobbying for extensions. Likewise, rewinding complex industrial relations rules could alleviate fears of unintended breaches among small employers. On the other hand, some of the Coalition’s rhetoric needs scrutiny for realism. Pledging significant increases in defence spending​and possibly new industry subsidies (as some pre-election announcements hint) while also cutting taxes raises the question: How will they fund these commitments without pushing deficits higher? The Coalition criticises Labor’s deficits, yet aside from opposing the 2026 tax cut, they have not outlined offsetting savings in detail. The likely targets would be trimming public service growth, cancelling specific Labor programs or grants, and reducing migration-driven costs – all politically sensitive areas.

It is also important to note voices beyond the major parties. The Greens have been largely critical of both Labor and Coalition approaches to cost-of-living, arguing for direct measures like free dental care, higher income support for the vulnerable, and taxing super-profits of big corporations to fund services. While not specifically small-business oriented, the Greens’ stance is that relieving poverty and investing in public services ultimately benefits the whole economy (including local businesses) by boosting consumer demand and social well-being. In the context of the 2025 Budget, Greens leader Adam Bandt slammed the tax cuts as money that would be better spent lifting unemployed and low-income Australians out of hardship. This fundamentally different priority set emphasises equity over broad tax reduction. The teal independents and other crossbenchers, many of whom have business backgrounds, have taken nuanced positions. For example, independent MP Sophie Scamps has proposed a dedicated $20,000 tax-free threshold for small business income as an election policy, alongside extending the $20k instant write-off​. This idea reflects an entrepreneurial perspective: letting sole traders keep the first $20k they earn tax-free (analogous to individuals’ tax-free threshold) could encourage more startups and give new small businesses a better chance to survive early years. It is a reminder that alternative solutions exist beyond the binary of Labor vs Coalition – ideas, like targeted tax-free thresholds or additional support for solo operators (who often don’t benefit from significant investment write-offs), could address the specific needs of the smallest businesses. Independent Senator Jacqui Lambie, as noted, blasted the Labor budget for lacking small business support and poorly targeted tax relief​. Her criticism that the government is “no friend of small business” underscores a growing sentiment that neither major party has fully delivered a comprehensive plan to reinvigorate Australia’s struggling small business sector.