Cutting red tape, keeping the instant asset write-off, and tackling tax reform. KPMG surveys over 150 mid-market CEOs on what they need ahead of the Federal Budget.
What’s happening: KPMG’s 2026 Mid-Market Pre-Budget Pulse Check, surveying more than 150 mid-market businesses, finds that nearly half of business leaders forecast no real growth for their organisations for the remainder of 2026.
The numbers coming out of KPMG’s latest mid-market survey do not leave much room for optimism. Only 6 percent of mid-market business leaders are predicting more than 10 percent growth over the near to medium term, according to KPMG’s 2026 Mid-Market Pre-Budget Pulse Check.
Close to half, 47 percent, forecast no real growth at all for the remainder of 2026. And with two RBA rate rises already landing in February and March, almost half of those surveyed expect no change to their investment activity, while 38 percent expect a small to notable reduction.
Against that backdrop, the KPMG survey makes clear what the sector wants from the Federal Budget: less regulation, smarter tax settings, and a clearer signal from Canberra that government understands what it takes to grow a business in a volatile economy.
The loudest ask is straightforward. Sixty-four percent of respondents told KPMG that cutting red tape should be a Budget priority, making it the single most popular measure among mid-market leaders. Half want to see major tax reform tackled. Forty-four percent want the instant asset write-off permanently retained. Measures to re-establish critical manufacturing in Australia were also popular, with 41 percent seeing this as a meaningful lever for growth.
KPMG Mid-Market and Private Tax Partner Kaylene Hubbard said the message from business is consistent and urgent. “Mid-market businesses are the beating heart of the Australian economy, and they understand that we can’t regulate our way to growth. Geopolitical instability and rising costs may be largely out of their hands, but what mid-market businesses need now is a clear signal from policymakers that they will cut through the regulatory clutter to enable the mid-market to innovate, expand, and adapt in an increasingly volatile economy.”
On tax reform, the KPMG survey reveals a sector that is selective about what it will accept. Changes to capital gains tax are broadly rejected, with only 17 percent supporting CGT changes as a revenue-raising measure. A wind back of negative gearing has slightly more acceptance, with 28 percent open to the idea. The most popular revenue-raising option is a GST increase, supported by 60 percent of respondents, followed by more targeted anti-avoidance measures at 50 percent.
The top challenges facing the mid-market over the next three years reflect the broader pressures squeezing the sector. KPMG found that cost and margin pressure was cited by 34 percent of business leaders as their biggest challenge, followed closely by dealing with regulation at 32 percent, and geopolitical uncertainty at 27 percent. Energy and fuel costs, despite their prominence in public debate, ranked lower as a primary concern, with only 18 percent of respondents identifying them as a top issue.
The labour market is also flashing warning signs, with a quarter of business leaders, 24 percent, identifying recruiting and retaining skilled staff as their biggest concern. Hubbard connected that challenge directly to housing affordability. “You can’t attract the skilled workers you need to grow your business if they can’t afford to live nearby. It is a factor in recruiting and retaining skilled workers, which is why we are seeing the mid-market becoming more receptive to policy that could affect housing affordability in our larger cities.”
The outlook is not without opportunity. KPMG’s findings show half of respondents identified improved digitisation of operations as one of their biggest growth opportunities, at 46 percent, followed closely by integrating AI into their business at 45 percent, and diversifying into new markets, products, and services at 43 percent. Hubbard said the AI finding reflects a deeper strategic awareness. “The mid-market understands that integrating AI is not just about efficiency but about securing a competitive edge right here in Australia.”
The KPMG Mid-Market Pre-Budget Pulse Check covers more than 150 mid-market businesses and was released on 28 April 2026, ahead of next month’s Federal Budget. With growth forecasts suppressed, investment appetite softening, and the regulatory burden consistently cited as a drag on performance, the mid-market’s message to Canberra is clear: the window to act is now
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