The Council of Small Business Organisations Australia (COSBOA) has welcomed measures in the Federal Budget that support productivity and reduce regulatory burden. However, it has concerns about the impact of proposed tax changes on many small business owners.
COSBOA CEO Skye Cappuccio, said “There are some encouraging signs in this Budget that recognise the need to improve the operating environment for small business and reduce friction across the economy.
“Small businesses are looking for certainty, simplicity and practical support to help them manage the cumulative pressures of fuel, energy, insurance, wages, rent, freight and compliance costs,” Cappuccio said.
COSBOA highlighted the following commitments as positive:
- Making the $20,000 Instant Asset Write-Off permanent from 1 July 2026
- Progressing the “tell us once” principle across government agencies and regulators
- Harmonising payroll tax and licensing arrangements across State and Territory borders
- Streamlining secure access to government services through Digital ID
- Reducing regulatory burden by $10.2 billion annually in compliance costs
- Initiating a Productivity Commission inquiry into regulatory barriers impacting business dynamism
However, there is concern about the complexity and possible unintended consequences of proposed tax changes:
- Changes to the Capital Gains Tax discount calculation
- The introduction of a minimum 30 per cent tax on capital gains after 1 July 2027
- The application of a 30 per cent minimum tax rate to trust distributions after 1 July 2028
- Delays to the delivery of the proposed $250 tax offset
Tax and trust changes could prove disruptive
“The proposed changes to Capital Gains Tax and the taxation of trusts have the potential to significantly disrupt the retirement plans of many small business owners,” Cappuccio said.
“For many Australians, their business is their retirement asset. Changes that reduce the value of business sale proceeds or associated property holdings could have major long-term consequences for owners who have spent decades building their businesses.”
The council is urging the Government to work closely with stakeholders to avoid unintended consequences, and ensure workable reforms.
COSBOA also suggested a specific carve-out for small business trusts and for Government support to help business owners understand the implications of the proposed changes.
An initial response from the Franchise Council of Australia has indicated it too has concerns over the Budget as it undertakes a deep dive into the finer points, CEO Jay Westbury told Franchise Executives.
“We’re working through the Budget detail but we’re already very concerned about the impact on small business. I’m in Canberra for all the Budget briefings including the Opposition reply tomorrow and I’ll have a much clearer picture beyond the headlines very soon,” Westbury said.
