‘Simply surviving is a win’ for many small businesses drowning in red tape, warns peak body in major reform push.
What’s happening: COSBOA has backed the Productivity Commission’s recommendation to cut the small business tax rate to 20%, with modelling showing this would inject $11.4 billion into GDP over five years. The peak body warns that small businesses sustaining five million jobs and contributing $500 billion to the economy are being “weighed down by rising costs, relentless red tape, regulatory complexity and new tax threats.”
Why this matters: COSBOA warns that “for many small business owners, simply surviving is a win” and that without reform, Australia risks “choking the very sector” that employs five million people. The organisation describes this as a “once-in-a-generation opportunity” to reshape policy settings.
Australia’s small business sector is mounting a push for tax relief and regulatory reform, warning that the nation’s economic engine room risks stalling without immediate intervention.
The Council of Small Business Organisations Australia (COSBOA) has delivered comprehensive submissions to the Productivity Commission across four reform pillars, describing the review as a “once-in-a-generation opportunity” to unlock small business potential.
COSBOA Chair Matthew Addison said small businesses are being crushed by mounting pressures. “This is a pivotal moment for real reform; the kind that will shape Australia’s economy for the next generation. Small businesses and the self-employed are doing it tough. They are weighed down by rising costs, relentless red tape, regulatory complexity and new tax threats.”
The stakes could not be higher. “If we squander this opportunity, we risk choking the very sector that sustains five million jobs and contributes $500 billion to our economy,” Mr Addison warned.
Tax Relief Push
Central to COSBOA’s reform agenda is backing the Productivity Commission’s recommendation to cut the small business company tax rate to 20 per cent. Small businesses currently pay a company tax rate of 25%, and the organisation points to modelling showing the reduction would inject $11.4 billion into GDP over five years.
The PC has outlined draft recommendations for lowering the headline company income tax rate to 20 per cent for companies with turnover below $1 billion, with the 30 per cent CIT rate remaining for companies with turnover above that threshold.
“A lower tax rate means money back into the economy – to employ more staff, adopt new technology and invest in growth,” Mr Addison said. However, he firmly rejected the Commission’s proposed cashflow tax, calling it “more red tape” when businesses need simplicity.
COSBOA also wants the instant asset write-off made permanent and increased to at least $150,000, along with targeted tax incentives for start-ups, research and development, digitisation and accredited training.
Skills Crisis Response
The organisation is pushing for targeted training incentives and micro-credentials to address crippling skills shortages. “Skills shortages are crippling small businesses. Incentives for training will make a real difference, but what we don’t need is a return to training levies – they’re outdated and just add cost and complexity,” Mr Addison said.
COSBOA supports national recognition of qualifications across states to break down hiring barriers and wants tailored advisory services to help small businesses navigate training options.
Digital Adoption Drive
On technology, COSBOA backs incentives for digital adoption and a national rollout of proven digital adoption grant programmes. The organisation recommends a light-touch approach to AI regulation, supported by a national AI adoption plan.
“Small business wants to digitise – the appetite is there – but costs and complexity hold many back. Let’s make it easier, not harder, to take up new technology,” Mr Addison explained.
The group has reiterated support for retaining the Privacy Act exemption for businesses under $3 million turnover, with alternative compliance pathways for larger small businesses.
Red Tape Revolt
Perhaps most significantly, COSBOA is calling for a fundamental shift in regulatory thinking. “We need a new mindset: regulate for growth, not for risk. Every new regulation should be tested against a simple question – how could a sole trader, a café owner with one employee or a small business employing ten people actually implement this?”
The warning comes as small business operators face what COSBOA describes as relentless pressures: industrial relations changes that strip flexibility, soaring costs and cashflow pressures including looming payday superannuation obligations, intensifying tax collection while debts mount, and a regulatory environment focused on compliance rather than growth.
For healthcare and care providers, COSBOA wants streamlined regulation, aligned quality standards, and professional association accreditation across programmes. “Care providers are drowning in duplication. Cutting red tape here means more time with clients, better services, and lower costs,” Mr Addison said.
Reform Window Closing
Mr Addison said the Productivity Commission process has put small business firmly on the national agenda, but action is now critical. “Small businesses aren’t looking for handouts. What we want is a fair, simple, and enabling system that rewards effort, encourages investment, and cuts down on the duplication and red tape that holds us back.”
“This is a once-in-a-generation chance to reset the system. We cannot afford to squander it. COSBOA stands ready to work with government on practical solutions that will give small businesses the confidence to invest, hire and innovate. Because when small business prospers, so does the nation.”
Related Links:
- Download COSBOA’s submissions to the Productivity Commission
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