COSBOA is calling on the government to modernise small business CGT concessions, raise eligibility thresholds, and consult the sector before any changes proceed.
For many small business owners, the decision to build rather than sell, to reinvest rather than draw income, and to sacrifice short-term comfort for long-term value has always been underpinned by a basic assumption: that when the time came to sell, the tax system would recognise what that risk and sacrifice was worth. The government’s proposed Capital Gains Tax changes are putting that assumption under pressure.
The Council of Small Business Organisations Australia says it is hearing that concern clearly and consistently from business owners across multiple industries. COSBOA CEO Skye Cappuccio said the conversation goes deeper than tax. “What we are hearing very clearly from small businesses is that this is not just a conversation about tax. It is about whether Australia still encourages people to back themselves and build something over the long term.”
The feedback coming through to COSBOA reflects a specific frustration. “Small business owners are telling us they have spent years reinvesting profits back into their businesses, staff and equipment instead of paying themselves larger incomes, because they believed building long-term value through their business would eventually pay off,” Cappuccio said. The problem, she added, is that the existing framework has not kept pace with the businesses it was designed to protect. “Whilst there are established CGT exemptions for eligible small businesses, the thresholds no longer reflect the realities or operating scale of many modern small businesses.”
A Melbourne mortgage broker’s perspective
Damien Roylance, Managing Director of Entourage Finance and a Mortgage and Finance Association of Australia member, has been in business for ten years. He does not describe himself as an established operator. “I still consider myself a start-up 10 years into business because we’ve spent that entire time reinvesting back into growth, staff and building the business,” he said.
The logic behind that reinvestment has always been straightforward. “Like many small business owners, I could have taken a bigger income personally, but instead you back the business because you believe the long-term investment will eventually pay off.” The proposed changes, he says, are shifting that calculation. “The concern with the proposed CGT changes is that they alter the equation for people who are taking those risks. A lot of small business owners are now questioning whether having a go in Australia is worth it anymore, particularly when the current thresholds no longer reflect modern business realities.”
A Victorian farmer’s succession dilemma
For Ryan Milgate, a Victorian grain and sheep farmer, the CGT debate is inseparable from the question of what happens to his farm when it is time to pass it on. “When the current thresholds were introduced, our farm would have qualified,” he said. Since then, land values and the operating scale of modern farming have both shifted significantly, even though the economics of farming itself have not necessarily followed. “People see land value and assume farming families are sitting on huge wealth, but farming doesn’t work like that. You can be land-rich and cash-poor at the same time.”
The practical consequences Milgate is weighing are direct. “The concern is these changes could force families to delay succession, take on more debt or even sell parts of the farm just to manage the tax impact.” Farming income, he noted, remains seasonal, unpredictable, and heavily affected by weather and commodity prices, variables that land valuations do not reflect.
What COSBOA is asking for
COSBOA says the concerns raised by Roylance, Milgate, and others are consistent with feedback it is receiving from small business owners across the country, and that they reflect the broader positions of the National Farmers’ Federation and the MFAA. The organisation is calling on the government to take three specific steps before implementing any changes.
First, modernise the existing Small Business CGT Concessions by increasing eligibility thresholds to include businesses with annual turnover under $10 million and net capital assets under $12 million. Second, ensure fair and practical valuation arrangements are available from 1 July 2027 if the CGT measures proceed. Third, undertake further consultation with the small business sector before implementing any changes.
Cappuccio said the asks are practical and targeted. “Small business owners need confidence that the years of risk, sacrifice and reinvestment required to build a business will still be recognised and supported. Small businesses are critical to Australia’s productivity and economic resilience, and policy settings should encourage entrepreneurship.”
The government has not yet publicly responded to COSBOA’s specific proposals. Further consultation with the sector, the organisation says, is not optional. It is necessary.
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