The Council of Small Business Organisations Australia (COSBOA) is calling on the Federal Government to take bold action in the upcoming 2025-2026 Federal Budget, with a focus on tax reform and reducing red tape.
COSBOA warns that without significant reforms, Australian small businesses—many of which are family-owned and built on hard work—could face even greater challenges, including inflation, fewer entrepreneurs, and weakened competition.
COSBOA CEO Luke Achterstraat highlighted the pressure small businesses are under, with rising costs, slowing demand, and mounting regulatory pressures. “Small businesses are facing a perfect storm. If we don’t act now, we risk record insolvencies and fewer entrepreneurs, which will ultimately lead to higher prices and lower living standards for everyone,” Achterstraat said.
The Call for ‘Twin Engines’ of Reform
To help stabilize the economy and safeguard the future of small businesses, COSBOA’s pre-budget submission focuses on two key areas for reform:
- Tax Reform:
- Update the tax system to reward entrepreneurs and help them retain more of their income.
- Reinstate the Technology Investment Boost to support cyber resilience and innovation.
- Push for national leadership on payroll tax, including harmonising rates and raising thresholds to support small business employment.
- Make the Instant Asset Write-Off permanent and increase the threshold to $150,000 to encourage investment.
- Red Tape Reduction:
- Introduce mandatory small business impact statements for new policies before they are brought to cabinet.
- Set up a “small business flying squad” to streamline outdated or unnecessary regulations.
- Simplify government processes, including those with the ATO and Fair Work Commission, to make them more user-friendly for small business owners.
- Ensure that the industrial relations framework doesn’t penalise casuals, contractors, or the self-employed.
Why Action is Critical
COSBOA stresses that inaction will have dire consequences. “Without urgent reforms, we risk ‘baked-in’ inflation and declining productivity,” Achterstraat warned. The most recent data from the Australian Bureau of Statistics shows that small business employment has declined by 0.2%, while larger businesses have seen a 0.4% increase. This trend threatens to reduce competition and drive up costs for consumers.
Supporting Small Business
In addition to the reforms, COSBOA calls for greater recognition of the critical role small businesses play in Australia’s economy. The submission recommends:
- Restoring funding to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) to ensure vital support and mediation services.
- Introducing Prime Minister’s Small Business Champion Awards to celebrate entrepreneurs.
- Delivering a quarterly Small Business Statement in Parliament to track the sector’s progress and outline government support.
Achterstraat challenged political leaders to take bold, visionary steps in supporting small businesses. “Small businesses are the engine room of the economy. We need reforms to ensure their survival and the prosperity of all Australians,” he concluded.
Without these necessary changes, the future of small businesses and the broader economy could be at risk, costing Australians in the form of higher prices and fewer opportunities for entrepreneurs.
The full COSBOA pre-budget submission can be accessed here.
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