Federal election 2025: what directors need to know

This month’s federal election has seen the ALP government re-elected with its strongest majority in the House of Representatives since John Curtin’s victory in 1943.

This month’s federal election has seen the ALP government re-elected with its strongest majority in the House of Representatives since John Curtin’s victory in 1943.

Whilst the Senate composition is still being finalised, it is very likely the ALP has won additional seats, allowing it to choose negotiating solely with the Coalition or Greens - rather than any crossbench independents - to secure legislation passage.

The election result means the potential for an ALP third-term looks strong, offering the opportunity to take a long-term view and tackle some chronic challenges facing the nation. On 12 May, Prime Minister Anthony Albanese announced his new Cabinet with a number of new ministers and reshuffled portfolio responsibilities (further details below).

More broadly, both the Liberals and Greens have lost their respective leaders in the election, heralding a possible shift in direction for both political parties.

We break down below some key takeaways for boards in major policy areas, including where the AICD has been actively involved.

An overarching message from the AICD in our government engagement will be encouraging a long-term policy approach and a commitment to match key trading partners such as the UK, US and EU commitment to rebalance regulation towards productivity and growth. A failure to do so risks Australia’s international competitiveness.

Productivity & industrial relations

Post the election win, Treasurer Jim Chalmers said that this term of parliament will be primarily focused on productivity, without forgetting inflation. Against a backdrop of sluggish domestic economic growth and volatility in global markets triggered by US tariffs, the government’s productivity agenda is relatively limited - at least at this stage.

The Treasurer has said he is focused on rolling out the government’s election platform, including the Future Made in Australia industry policy, housing reforms and enhanced national competition policy in collaboration with the States.

Before the election, the Productivity Commission had already been tasked with a number of relevant inquiries aimed at reinvigorating national competition policy and fostering a dynamic and resilient economy.

The AICD is engaging with key reviews and hopes to see them used as a catalyst for evidence-based policy that genuinely tackles Australia’s long-term productivity challenges.

Given the strong majority enjoyed by the Albanese government – a stark contrast to recent parliaments - there have been calls from business and policy experts for a more ambitious approach.

Equally, in areas such as industrial relations, there are influential union voices calling for even greater reforms. These go beyond the ALP’s first term changes and this election’s commitments to preserve penalty rates, legislate minimum wage increases and ban non-compete clauses for certain workers. Amanda Rishworth is the new Minister for Employment and Workplace Relations.

Major tax reform remains off the table, at least for now...

Climate change and energy

Going into the election, a key difference between the ALP and Coalition platforms were highly contrasting approaches to climate and energy policy.

With the ALP returned to office, there is greater policy certainty, including the government’s commitment to a 43 per cent reduction in 2005 level national emissions by 2030 and the roll-out of mandatory climate reporting for thousands of Australian businesses. Going into the next Parliament, the AICD will continue to call for the smallest entities captured by the regime, including NFPs, to be carved out given the costs involved.

Critically, the government is expected to announce its 2035 national emissions target by November this year, with the Climate Change Authority developing advice for a figure likely in the range of 65 per cent to 75 per cent - a significant step up in ambition if adopted and requiring major investment in new infrastructure.

More broadly, with Australia running hard to host next year’s key global climate summit (COP 31), in collaboration with climate-exposed partners in the Pacific, there will be pressure to take a leadership position.

Minister for Climate Change and Energy Chris Bowen will continue in his position.

Cyber security, privacy and AI

The previous parliament saw the government introduce a range of legislative reforms to implement its 2030 Cyber Security Strategy, including a new Cyber Incident Review Board, mandatory ransomware payment reporting and heightened obligations on critical infrastructure providers.

Looking ahead, most reforms in the cyber portfolio are moving to implementation phase, although there remains a risk that a major incident, or significant deterioration in the threat environment, could prompt a major new regulatory intervention.

In the area of privacy, however, the government has significant unfinished business. With only a small number of the 116 recommendations of the Privacy Act legislated last year, a second tranche of more controversial reforms are expected to be advanced this parliamentary term. These could include a new direct right of action for privacy breaches – expected to be a major new source of class action risk, a right of erasure (sometimes known as a ‘right to be forgotten’) and removal of the small business exemption.

These issues and more will find themselves in the in-tray of the new Attorney-General, Michelle Rowland.

Given the weight of regulation facing business, the AICD is calling for a halt on further implementation of privacy reforms until an independent cost benefit analysis can be conducted. Critically, complex and opaque data retention laws should be prioritised prior to layering new obligations. We are also continuing to advocate for the removal of sensitive director personal information from the ASIC companies register.

On artificial intelligence regulation, we await clarity on the government’s final position post last year’s consultation on proposed mandatory guardrails. This comes against a backdrop of US President Trump repealing relevant executive orders governing AI, and ongoing controversy over the EU regime which is causing tension with tech giants and the US government - prompting Brussels to scrap plans to introduce new compensation laws.

Senator Tim Ayres is the new Minister for Industry & Innovation and will be tasked with leading the government’s approach to AI.

Audit regulation

Another key unsettled area of policy is the approach to the question of audit and consulting firm regulation, in the wake of the PwC tax leaks scandal.

Late last year, a major report from the Parliamentary Joint Committee on Corporations and Financial Services was issued outlining wide-ranging recommendations including banning consulting services being offered by Big Four firms to audit clients; operational separation of audit and non-audit services; introduction of a new internal controls management sign-off; and mandatory 10-year audit tenders.

With some exceptions, the PJC recommendations were largely bipartisan in nature, increasing the prospect of the package of reforms being legislated.

With the PJC inquiry taking place alongside a parallel Treasury consultation, we still await a final government position. Following Stephen Jones’ retirement at the election, Dr Daniel Mulino will become the new Assistant Treasurer and Minister for Financial Services, and likely assume responsibility for these issues.

Environmental reforms

A flashpoint in the previous parliament was the government’s ‘nature positive plan’ to introduce a new federal Environment Protection Agency and reform the widely-criticised Environment Protection and Biodiversity Protection Act.  

The reforms were heavily contested by environmental and business groups, with the Western Australian government taking a prominent role in opposing. The result was the plans being frozen in the leadup to the federal election.

With the government now strengthened by a large parliamentary majority and the PM recently re-committing to a new EPA, we will wait and see whether reforms can be legislated that better protect the environment and provide business with faster planning decisions.  

New Minister for the Environment and Water, Senator Murray Watt, will assume responsibility.