Australia’s SMEs, numbering over 2.5 million and employing nearly half the workforce, are at the heart of a heated political debate as the Coalition and Labor unveil competing plans to support the sector.
The Coalition, led by Peter Dutton, has launched a $4.6 billion strategy to reverse what it calls a “cost-of-doing-business crisis” under Labor, while the Albanese Labor Government counters with $2 billion in targeted relief, claiming record business creation despite global challenges. Both sides agree small businesses are the economy’s “engine room,” but their approaches and rhetoric sharply diverge.
The Coalition paints a grim picture of small business conditions under Labor. “Under Labor, small businesses have struggled to survive. We’ve seen a record number of insolvencies because of this government’s bad policies and economic management,” Dutton said in a media release on April 19.
Labor, however, disputes this narrative, emphasising resilience. Their March 25 announcement highlights a record 2.6 million small businesses, with 25,000 created monthly on average since 2022. “We know small businesses are doing it tough,” said Minister for Small Business Julie Collins, but she attributes challenges to global inflation and energy market volatility, not domestic policy. Labor’s $2 billion in support, including $800 in energy rebates since 2022–23, has cushioned the sector, they argue.
Taxation
The Coalition’s $2.9 billion tax package aims to spark entrepreneurship. Their Entrepreneurship Accelerator, costing $214 million, offers a three-year tax offset for new businesses, while a permanent $30,000 instant asset write-off and a $2,000 Tech Booster deduction target growth. “The Coalition’s plan will restore confidence, save time and cut costs,” Dutton said.
Labor counters with its own tax relief, extending the $20,000 Instant Asset Write-Off to June 2026 and delivering tax cuts for 1.5 million sole traders. “A re-elected Albanese Labor Government will help more Australian small businesses grow, invest and prosper,” stated Prime Minister Anthony Albanese, Treasurer Jim Chalmers, and Collins in an April 4 release.
Energy costs
Energy prices are a flashpoint. The Coalition claims Labor’s “ideological renewables-only approach” caused electricity prices to rise 32% for households and 52% for small businesses, despite promises of reductions. Their $263 billion plan by 2050 combines renewables, gas, and nuclear at seven sites, with a National Gas Plan to cut wholesale gas prices by 23%, their April 19 plan states.
Labor rejects the “renewables-only” label, noting support for gas as a transitional fuel. Their $150 energy rebates for one million small businesses, extended to end-2025, build on $800 provided since 2022–23.
Regulation
Both parties aim to cut red tape, but their methods differ. The Coalition proposes a Small Business Deregulation Taskforce and simplified corporations law, claiming Labor’s regulations stifle growth.
Labor claims their $900 million National Productivity Fund streamlines licensing and zoning with states, while $207 million stabilizes business registers. “We’re working with the states and territories to cut red tape and boost competition,” Labor’s March 25 release noted, citing their National Small Business Strategy for coordinated support.
Employment
Industrial relations reforms spark contention. The Coalition criticises Labor’s “right to disconnect” law, which risks $18,000 fines for contacting employees outside hours, and plans to repeal it alongside union-influenced casual worker rules. Their $500 million apprentice subsidy program aims to ease hiring. “As someone who has worked in and grown their own small business, I know just how much our small businesses are hurting right now,” Dutton said.
Labor defends its reforms as boosting productivity through employee well-being. Their $900 million skills training investment complements apprenticeship support, and they argue the “right to disconnect” fosters a sustainable workforce. “We’ll continue to support and defend Australia’s small businesses,” Collins said, emphasising long-term benefits over short-term flexibility.
Hospitality and fair competition
Hospitality receives targeted support from both. The Coalition’s $243 million package includes meal expense deductions and a tap beer excise freeze, while Labor’s $165 million pauses draught beer excise indexation and boosts alcohol producer remittances. “Our plan comes at a time when Australia’s small and family businesses need it most,” Ley said, framing Labor’s policies as harmful to the sector.
Labor counters with tourism promotion and regulatory protections, investing $7.1 million in Franchising Code enforcement and $2.9 million for grocery code compliance. “The Liberals will increase income taxes for every Australian taxpayer, including 1.5 million sole traders,” their April 4 release warned, positioning their approach as more equitable.
The Coalition’s $4.6 billion plan, including fuel excise cuts, frames small businesses as central to economic recovery. “A plan for strong small businesses is a plan for a strong economy,” said Shadow Treasurer Angus Taylor. Labor’s $2 billion strategy emphasises immediate relief and resilience, claiming, “Small businesses are at the core of our plan to build Australia’s future.”
Both sides share the goal of small business growth but clash on execution. The Coalition’s broad tax cuts and nuclear energy bets contrast with Labor’s targeted rebates and renewable focus. As Australia heads toward an election, small business owners face a stark choice between these visions.
Dynamic Business does not endorse any political party or candidate. The views expressed are impartial and for informational purposes only.
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