What does Labor’s win mean for small and medium-sized enterprises (SMEs)?
What does Labor’s 2025 Western Australian election victory mean for small and medium-sized businesses?
Labor’s re-election is likely to bring continued support for SMEs through grants, advisory services, and commitments to reduce regulatory burdens, while maintaining significant investment in housing, infrastructure, skills training, and regional development. However, businesses may continue to face challenges from rising energy costs, inflation, interest rates, wage pressures, and payroll tax, making it important for SMEs to monitor both emerging opportunities and ongoing cost pressures under the new government.
The recent Western Australian state election resulted in a third consecutive victory for the Labor Party, led by Premier Roger Cook. While Labor’s primary vote decreased from their record-breaking 2021 win, they still secured a comfortable majority in the Legislative Assembly.
For small and medium-sized enterprises (SMEs) in Western Australia, this Labor victory could have several implications:
- Small business growth grants: Labor has pledged to deliver a $1.3 million small business growth grants program for the South West region. This program will offer grants of up to $10,000 to help small business owners access specialised support, including financial health checks and business planning.
- Continuation of existing initiatives: the grant program will run alongside other state government small business initiatives, including electricity credits and free advisory services for regional WA businesses.
- Regulatory relief: Labor has made generic commitments to cut government regulation for small businesses and reduce their transaction fees, which could potentially ease some administrative burdens for SMEs. However, the proof will be in the pudding, as WA state debt is now projected to hurtle to $40 billion (despite two record breaking budget surpluses).
- Increased energy costs for SMEs: energy costs will likely continue to mount as the WA Labor government seeks to transition the WA energy system away from traditional energy sources to alternative renewable sources, with the government having committed to retiring its state-owned coal-fired power stations by 2030, and to replacing them with renewable electricity generation.
These implications are in the context of SMEs continuing to face challenges, such as:
- The persistence of inflation and elevated interest rates, which have increased borrowing costs for businesses and reduced consumer spending power.
- Pressure for wage increases due to the high inflation rates and low unemployment, which impact SMEs’ operating costs.
- Payroll tax, with the average WA business paying $3,285 in payroll tax per employee, compared with the national average of $2,463.
Meanwhile, the Labor government has promised to spend big on a number of social policies, including:
- Assistance to help lower-income earners purchase new apartments or townhouses.
- For 800 social and affordable homes.
- To establish a build-to-rent fund.
- For key worker, community, and local, regional and subdivision housing projects.
- Raising exemption thresholds for stamp duty for first homebuyers.
- Fee-free TAFE courses in construction.
- To build 11 schools and upgrade others.
- To expand the emergency department at Royal Perth Hospital.
- For more community housing.
- For rebates on residential batteries.
- For the Albany Airport upgrade.
- For the TradeStart program over three years in the South West and Great Southern regions.
- To expand the Swan River ferry network.
- For Warwick Stadium to become the new home of the Perth Wildcats and Perth Lynx.
- For a motorsports precinct at Burswood.