The Federal Budget has landed with tax cuts, instant asset write-offs and a productivity agenda. But what do the founders and leaders actually building Australian businesses make of it?
The Federal Budget 2026 arrived with ambition. A productivity package, significant savings, tax reform, and a suite of measures designed to help small and medium-sized businesses invest, innovate, and hire.
Treasurer Jim Chalmers called it the government’s most responsible budget yet. For the founders, CEOs, and investors building Australia’s businesses, the verdict is more complicated than that. A genuine welcome for structural signals, real concern about what has been left out, and pointed questions about whether the measures will actually reach the businesses that need them most.
From deep tech to small business compliance, our readers respond to the Federal Budget 2026 with praise, concern and some pointed questions the government may not have answers for yet.
Liza Noonan, Former Investment NSW Executive and CEO, Cicada Innovations
“Without clear mechanisms to support the commercialisation journey, Australia risks losing not just companies, but the sovereign capability, talent and economic value they represent.”
“The Federal Budget is unashamedly focused on intergenerational equality and a direct response to a world being reshaped by conflict, cost-of-living pressure and the accelerating energy transition.”
Noonan welcomed the meaningful reforms to the Research and Development Tax Incentive as structural settings that will make Australia a more attractive place to build and back a deep tech company, though she was quick to add that the detail will matter. “Deep tech operates on lengthy timeframes that routinely exceed those of other sectors, and the eligibility settings must reflect that.”
She also welcomed the Startup Loss Refundability Measure as practical relief for founders in critical early years, but advocated for a deep tech extension for hardware and biotech firms where two years rarely covers the proof-of-concept phase. The expansion of venture capital tax incentives and the increased expenditure cap for core R&D, she said, send a clear signal that Australia is serious about backing its most ambitious companies.
But Noonan’s most pointed concern sits in the middle of the innovation journey, the gap between discovery and commercial viability that typically takes seven to ten years. With the Australian Economic Accelerator gone and the Industry Growth Programme running out of road, she warned that Australia’s innovation pipeline is most exposed at exactly that point. “Without clear mechanisms to support the commercialisation journey, Australia risks losing not just companies, but the sovereign capability, talent and economic value they represent. Once lost, these things are not easily rebuilt.”
Steve Baxter, Founder and CEO, Beaten Zone Venture Partners
“You are taxing the journey, not just the destination.”
“The decision to replace the 50% CGT discount with an inflation-indexed model, while framed as restoring fairness, risks a significant disincentive effect on private capital formation.”
Baxter did not mince words. Australia competes globally for mobile capital, he said, and mobile capital is by definition mobile. When comparable jurisdictions offer more favourable treatment of long-term investment gains, capital will follow. “This is not a theoretical concern. It is basic portfolio behaviour.”
His deeper concern is how the indexation model misunderstands early-stage company building. When a founder or investor backs a startup, the capital base at inception is effectively zero. Value creation happens over years, sometimes a decade or more, before any liquidity event. “Applying an inflation-indexed cost base across that holding period dramatically understates the real return that investors require to justify the risk they took on day one.”
The same problem, he argued, cascades to the people who actually build these companies. Startup employees routinely accept below-market salaries in exchange for equity issued at very low early-stage valuations, often cents on the dollar compared to what that equity might be worth at exit. If the gains on that equity are indexed from the date of issue, the financial logic of accepting equity in lieu of wages collapses. “You are effectively penalising the engineer, the salesperson, the operator, who backed themselves and backed their company. The result is fewer talented people willing to take that bet, and more startups that simply cannot compete for the talent they need to grow.” The VC tax incentive expansion is welcome, Baxter said, but it does not offset the broader signal this sends to investors about Australia’s appetite for private risk capital.
Karlie Cremin, CEO, Dynamic Leadership Programs Australia
“Productivity gains do not happen automatically. They happen when leaders can set direction, communicate change, build trust and help teams perform.”
“While it’s great to see support of small businesses in terms of tax changes, it is hard to imagine that those levels of cuts will overcome the burden of workplace legislation we have, particularly for medium-sized businesses who still have that burden but seem to have missed out on the tax incentives.”
Cremin identified a structural problem with applying the small business measures to turnover rather than headcount. “Applying these measures to small business according to turnover and not headcount is just asking for the rise of zombie businesses, as in the Covid JobKeeper days.” If productivity is the goal, she argued, there should be a minimum headcount requirement. “There’s a lot of sole traders operating as pty ltds. For productivity purposes it doesn’t make sense to incentivise those businesses. They are more likely to be unprofitable and operate just to collect the tax benefits on what would otherwise be personal income.” Her recommendation was direct: incentivise businesses with five or more employees as a minimum, and stop forgetting medium-sized businesses that get squeezed from both sides.
On the broader productivity agenda, Cremin pointed to what she sees as the missing link. “This Budget gives businesses more ways to invest, innovate and access skilled workers, but the missing link is leadership capability. Productivity gains do not happen automatically. They happen when leaders can set direction, communicate change, build trust and help teams perform. If Australia wants these reforms to translate into real workplace outcomes, leadership development cannot be treated as optional.”
Her closing point was equally direct. “We also need to be careful not to confuse technology or tax incentives with innovation itself. Innovation is human before it is technical. It requires curiosity, courage, adaptability and leadership. The most productive thing many businesses can do right now is invest in the people who are responsible for leading change.”
Dan Copsey, Founder, Admosis Media Group
“The costs associated with consulting, integration, and staff hours to stand up these technologies remain a significant barrier for many.”
“Making the instant asset write-off permanent is a win for small businesses. However, it would have been more meaningful if the scope and threshold were increased to reflect how SMBs actually invest today.”
Copsey’s main disappointment was the limited support for R&D incentives specifically around AI adoption. “Many small businesses I speak with are keen to leverage technologies such as AI to disrupt and transform their sectors. However, the costs associated with consulting, integration, and staff hours to stand up these technologies remain a significant barrier for many.” Introducing measures that better support and recognise the cost of AI adoption, he said, would have made a real difference for Australian small businesses.
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