COSBOA CEO Skye Cappuccio says a proposed cash flow reform helps company-structured businesses, but leaves trusts and sole traders exposed.
The Council of Small Business Organisations Australia (COSBOA) wants a proposed tax reform rewritten so it doesn’t leave most small businesses out in the cold.
In a supplementary submission to the Senate Economics Committee, COSBOA backed the general aim of the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026, which is meant to help businesses manage cash flow during tough trading periods. But the group says the bill, as it stands, only really works for one type of business owner.
COSBOA Chief Executive Officer Skye Cappuccio put it plainly: “We support the intent of these reforms. Our concern is that the benefits should be available to all small businesses, regardless of how they are legally structured.”
That distinction matters more than it might sound. Plenty of small operators assume “small business” and “company” are basically the same thing. They’re not. Family businesses often run through trust structures. Others operate as sole traders or in partnerships. None of those get the same treatment under the current draft.
“Many Australian small businesses do not operate as companies. Family businesses commonly use trust structures, while many others operate as sole traders or partnerships,” Cappuccio said. “Businesses facing the same economic circumstances should have access to the same support. Tax settings should reflect the diversity of Australia’s small business sector, rather than favouring one business structure over another.”
Who gets left out
COSBOA’s submission spells out exactly where the gaps sit. Losses inside a trust stay trapped there, with no way to carry them back. Sole traders and partners have no carry-back facility at all. And even companies that pay out profits to support the people actually running the business may end up with a limited benefit, despite technically qualifying.
COSBOA isn’t just flagging the problem, it’s proposing a specific mechanism. Its recommendation: once current-year tax relief has already been applied, any genuine business losses that still can’t be used should be able to be carried back against tax the business previously paid, whether it’s operating as a trust, partnership or sole trader. Rather than building something new, COSBOA wants this done through existing tax reporting processes already in place.
“Our submission provides a practical pathway that builds on existing tax administration processes,” Cappuccio said.
What COSBOA wants next
If those changes can’t be squeezed into the current bill, COSBOA has a fallback ask: a government commitment to consult on extending loss carry-back to non-company small business structures, treated as a priority rather than something to revisit later.
“We look forward to working with Government, Treasury and the Australian Taxation Office to ensure this important reform supports the broadest possible cross-section of Australia’s small business community,” Cappuccio said.
Whether the committee takes up COSBOA’s recommendation, or how the government responds to it, remains to be seen. For now, the group’s position leaves a clear question hanging over the bill: should tax relief depend on how a business happens to be structured, or on whether it’s genuinely doing it tough?
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