What are the changes to sustainability reporting in the federal budget?
If enacted, these proposals could significantly reduce reporting obligations for a broad range of Australian entities, writes BDO’s Aletta Boshoff.
The Federal Government’s 2026 Budget included a suite of measures aimed at improving productivity and reducing regulatory burden, with a strong focus on financial and sustainability reporting. If enacted, these proposals could significantly reduce reporting obligations for a broad range of Australian entities.
Among the most significant proposals are changes that would increase the size thresholds for large proprietary companies and simplify reporting requirements for corporate groups. If implemented, these reforms could reshape how reporting obligations apply across the market.
These changes may be particularly relevant for organisations approaching current reporting thresholds.
Higher thresholds for large proprietary companies
- Doubling the monetary thresholds for large proprietary companies lodging financial statements and sustainability reports with the Australian Securities and Investments Commission (ASIC).
| Thresholds | Current thresholds | Proposed thresholds |
|---|---|---|
| Consolidated revenue for the financial year | $50 million | $100 million |
| Consolidated gross assets at the end of the financial year | $25 million | $50 million |
| Group employees at the end of the financial year | 100 | 100 (no change) |
If enacted, entities that cease to meet these thresholds may no longer be required to lodge audited annual financial reports, directors’ reports and sustainability reports (for ‘Group 3’ entities) with ASIC.
Simplified reporting for corporate groups
- It will be easier for wholly-owned subsidiaries to obtain relief from lodging separate financial reports with ASIC, with the Government proposing to replace complex deeds of cross-guarantee with a simplified statutory process.
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Changes to climate-related disclosures
- Improving the efficiency of climate-related financial disclosures, including:
- Clarifying how key concepts, including ‘undue cost or effort’, apply in practice
- Adjusting assurance settings to ensure they are proportionate and practical
- Setting clearer boundaries on supplier information requests to reduce costs and complexity, particularly for small businesses.
While the timing and legislative details of these proposals are yet to be confirmed, organisations should begin to consider how potential changes to reporting thresholds and disclosure requirements may affect their current and future obligations. Early consideration will be particularly important for entities approaching existing thresholds or operating within corporate group structures. BDO will continue to monitor developments and provide updates as further information becomes available.
Organisations impacted by sustainability reporting requirements can explore our related insights on AASB S2 and climate disclosures for further guidance on upcoming obligations.
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