Australia’s government has proposed significant changes to its corporate reporting rules, including raising the threshold of companies required to publish audited financial and sustainability reports to exempt those with revenues under A$100 million and assets of $50 million.
Alongside the proposed changes, unveiled with the release of Australia’s 2026 Budget, the government also announced plans to consult on reforms to reduce compliance burdens related to climate-related reporting, including “setting clearer boundaries on supplier information requests, to reduce costs and complexity, particularly for small businesses.”
The new proposals form part of a series of regulatory reforms aimed at simplifying regulations for companies, which the government said it anticipates will reduce regulatory burden by A$10.2 billion per year once fully implemented.
The proposed reforms come as Australia is in the middle of rolling out its corporate sustainability reporting regime. Introduced in 2024, the new law introduced mandatory climate-related reporting requirements for large and medium sized companies, including disclosures on climate-related risks and opportunities, and on greenhouse gas emissions across the value chain.
Reporting requirements apply to all public companies and large proprietary companies required to provide audited annual financial reports that meet specific size thresholds, which started in 2025 with companies with over 500 employees, revenues over $500 million or assets over $1 billion, as well as asset owners with more than $5 billion in assets, apply in 2026 for medium sized companies with 250+ employees, $200 million+ revenue, and $500 million assets, and are currently set to apply to smaller companies with 100+ employees, $50 million+ revenue, and $25 million+ assets in 2027.
The government’s new proposal would significantly reduce the number of companies within the smaller company group set to begin reporting next year, doubling the thresholds from $50 million revenue and $25 million assets to $100 million revenue and $50 million assets, while retaining the 100 employee threshold. Companies hitting 2 of the thresholds are considered within the scope of the reporting obligations.
According to the government’s Budget summary, “Australian businesses that cease to meet the thresholds due to this increase would no longer need to lodge an annual audited financial report, directors’ report or sustainability report.”
The budget also includes a pledge by the government to consult on measures aimed at “improving the efficiency of climate related financial disclosures,” including clarifying how key concepts such as the “undue cost or effort” apply in practice, adjusting assurance settings, and setting boundaries on supplier information requests – with a particular focus on reducing costs for smaller businesses.
The government’s release did not include a timeline for the legislative process to put the proposed changes in place.
