The ATO is offering payment flexibility and penalty remissions for small businesses hit by rising fuel costs. COSBOA CEO Skye Cappuccio says the relief is practical and proportionate.
What’s happening: The Council of Small Business Organisations Australia has welcomed a coordinated government response to rising fuel costs, including temporary ATO relief measures covering payment flexibility, penalty remissions and tailored compliance support.
Why this matters: For small business owners, the combination of surging fuel prices, consecutive interest rate rises and weakening consumer sentiment has created one of the most difficult operating environments in recent memory.
The fuel crisis gripping Australia did not arrive quietly. Over recent weeks, escalating conflict in the Middle East and disruption near the Strait of Hormuz, a chokepoint for roughly one fifth of global oil supply, sent fuel prices surging across the country. In some regional areas, diesel climbed to $3.20 per litre and above, with the pressure felt most acutely by businesses with no alternative to fuel as a core operating cost.
COSBOA had already flagged the severity of the situation before government relief was announced. CEO Skye Cappuccio described the environment facing small businesses as a pressure cooker, with 64% of small businesses reporting lower profits over the past year and 60% unable to pay themselves at least occasionally, according to COSBOA’s own Small Business Perspectives Report.
“Many small businesses are feeling the impact of rising fuel costs and uncertainty around supply,” Cappuccio said earlier this month. “It is hitting differently across industries and is often more pronounced in regional areas, but the effects are being felt right across supply chains.”
For tradies, delivery operators, farmers and regional retailers, fuel is not a discretionary expense. It is a daily cost of doing business, and when it rises sharply, there is nowhere for that cost to go except directly into margins that are already thin.
“For businesses operating on tight margins, even small increases in fuel costs can have a direct impact on cashflow and day-to-day operations,” Cappuccio said.
What the government has done
The Albanese Government moved to address the supply side of the crisis by introducing new fuel security powers, with amendments to the Export Finance and Insurance Corporation Act formalising the Commonwealth’s ability to underwrite additional fuel cargoes and strategic reserves.
Through Export Finance Australia, the government can now enter contracts of insurance or indemnity, give guarantees, make loans or enter arrangements needed to help secure fuel supply from international markets. The focus is on filling supply gaps in regional areas and ensuring additional supply reaches independent and uncontracted demand, including farmers, regional retailers and small operators without the buying power of large national businesses.
Prime Minister Anthony Albanese and Energy Minister Chris Bowen were direct about the stakes. “While Australia’s fuel supply outlook remains secure over the near term due to the actions the Government has taken to date, the Government has been clear: the longer this war goes the worse the impacts will be. We are acting now to prepare and shield Australians from the worst of it.”
Alongside the supply measures, the government has introduced targeted cashflow support for businesses already feeling the financial impact of higher fuel costs.
The Australian Taxation Office is offering temporary relief measures including payment flexibility, remission of penalties and a more tailored approach to compliance for businesses under pressure. COSBOA welcomed the measures as sensible and directly targeted at the issue.
“These are sensible, practical measures that go directly to the issue of cashflow and recognise the conditions small businesses are operating in and the importance of keeping them moving,” Cappuccio said.
The banking sector and larger businesses have also been acknowledged for stepping up, with more flexible lending, payment deferrals and actions to support supplier cashflow forming part of the broader coordinated response.
“This is a connected system, and it’s encouraging to see coordination across Government, banking and industry to support small business viability,” Cappuccio said.
What small businesses should do now
COSBOA’s message to small business owners is clear: do not wait. “We would urge small businesses experiencing difficulty to reach out to their trusted advisors, whether that’s their bookkeeper, accountant or finance broker, to help navigate the support available,” Cappuccio said.
The ATO relief measures are available now, but accessing them requires businesses to engage proactively rather than waiting for the pressure to become unmanageable. For businesses already on payment arrangements with the ATO or carrying debt from the COVID era, early engagement is particularly important.
COSBOA has also signalled that further support may be needed if conditions worsen. “We’re clear on what matters, protecting small business cashflow, ensuring relief flows through, and being ready to act if pressures intensify,” Cappuccio said.
The peak body will continue working with government and industry as the situation evolves, with any additional measures expected to remain targeted and proportionate.
For small business owners, the practical starting point is a conversation with their bookkeeper, accountant or finance broker about what relief is available and whether their current arrangements with the ATO, their bank or their major suppliers need to be revisited in light of the current environment.
“Small businesses are not just critical to our economy,” Cappuccio said. “They are the social glue that holds communities together, supporting local jobs and local people every day.”
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