Is Economic Reform on the Horizon?
Economic Reform on the Horizon: What the 2025 Election Means for Investors
Following Labor’s decisive win in the 2025 federal election, Treasurer Jim Chalmers has made a bold call: it’s time for a new era of national economic reform. If you’ve heard the headlines and wondered what it means for your financial future, here’s what you need to know.
Why Now?
According to Chalmers, Australia’s economy is facing several long-term structural challenges:
🔹 Low productivity growth
🔹 Rising government spending
🔹 Increased global volatility
These issues aren’t new, but with inflation cooling and the election behind us, the government says now is the time for a collaborative reset involving business, unions, economists and policymakers.
A Look Back to Look Forward
This isn’t the first time Australia has taken bold steps to reform its economy.
In the 1980s and 90s, two waves of reform reshaped our financial system:
- The Hawke-Keating era floated the dollar, deregulated banks, and introduced the social wage, which laid the foundations for Medicare and superannuation.
- The Howard-Costello government introduced the GST and overhauled tax and public funding systems.
The result? Decades of uninterrupted economic growth.
Today’s reform push echoes that history, but with a modern lens: digital disruption, energy transition, budget pressure, and global uncertainty.
What’s Going Wrong?
Here are the core challenges driving this reform agenda:
1. Productivity Growth Has Slowed
Productivity is the engine of rising living standards. From 2017 to 2024, it grew at just 0.6% per year, well below the long-term average of 1.6%. The lower the growth, the longer it takes for future generations to enjoy higher living standards.
2. Budget Sustainability is Under Pressure
Government spending is increasing faster than revenue. Six structural costs are driving this trend:
- Health and hospitals
- Defence
- Aged Care
- NDIS
- Early childhood education
- Interest on national debt
3. Economic Resilience is Fragile
COVID, supply chain issues, and geopolitical instability have revealed how exposed we are to external shocks. Chalmers says future reforms must build resilience into our systems.
What Could Reform Look Like?
The upcoming Productivity Roundtable in August will bring together 25 leaders across the economy, including the RBA, unions, and business peak bodies — to begin shaping the reform agenda.
Key topics are expected to include:
✅ Tax reform — Chalmers has flagged that this is “central” to the conversation. While GST increases are not currently on the table, they are not being ruled out.
✅ Red tape reduction — but without compromising environmental or regulatory standards.
✅ Productivity drivers — investment in R&D, infrastructure, skills, and digital capacity.
✅ Sector reform — including care industries, energy transition, and education.
What This Means for Investors
While policy changes won’t happen overnight, it’s important to stay ahead of the curve. These reforms may affect:
- Superannuation tax treatment (e.g. Division 296 is still a go)
- Broader tax structures for high income and wealth
- Incentives for private investment in innovation or infrastructure
- Housing policy and migration-linked planning
For investors, these kinds of reform cycles often bring both risk and opportunity.
Our Perspective
At Poole Advisory, we welcome long-term thinking and national conversations about sustainability. But we also know that reform creates uncertainty, and uncertainty demands strategic planning.
If you’re looking to protect and grow your wealth in a changing policy landscape, we’re here to help you assess the risks and adjust your strategy with clarity and confidence.
Want to be financially prepared for the next wave of reform?
Contact us to discuss what these potential reforms could mean for your financial goals.
Compliance Disclaimer:
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns.
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
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