As the Federal government is set to unveil the 2025-26 Budget, small-business advocates have put forward their Budget wishlists on behalf of SMEs nationwide.
In terms of legislative reform, reducing red tape is high on the agenda – ISB has heard from many small-business owners who said it will influence their decision at the ballet box later this year. For now, there’s hope that some regulatory relaxation will be afforded in the 2025-26 Budget.
“The cost of compliance is a hidden tax on small businesses,” said Council of Small Business Organisations Australia (COSBOA) CEO Luke Achterstraat. “Every hour spent navigating complex regulations is an hour not spent growing the business, creating jobs, or serving customers. Cutting red tape is an economic necessity.”
What would red tape reduction look like?
In a pre-Budget submission, COSBOA has put forth the following proposals which could help affectively address red tape:
- Mandatory small business impact statements before any new policy or regulation is introduced.
- A ‘Small Business Flying Squad’ which would be a task force dedicated to identifying and eliminating outdated, redundant, or contradictory regulations.
- Introduction of more user-friendly government systems that would streamline interactions with agencies like the ATO, Fair Work Commission, and ASIC to reduce administrative burdens.
- An industrial relations framework that supports flexibility for casuals, contractors, and sole traders.
CPA Australia’s pre-budget submission included a similar sentiment; in particular, it called on the Government to review ineffective regulation and invest in technology to improve digital interactions between businesses and the Government.
Tax reform
Also at the top of the small-business wishlist for this Budget is tax reform. ISB recently asked small-business owners which tax changes would really make an impact on their businesses. Many said they wanted lower payroll tax and GST rates, which COSBOA is calling on the Government to review.
Increased tax incentives were also popular; in particular, the renewal of the $20,000 instant asset write-off. With no government having yet made the measure permanent, it’s up to tonight’s Budget to reinstate the write-off for another year.
Other suggestions from COSBOA and CPA include:
- Reintroduction of the Small Business Technology Investment Boost that would provide a 20 per cent additional tax deduction to help small businesses adopt digital tools and cybersecurity protections.
- Re-introduce and permanently establish the Small Business Energy Incentive
- Reintroduce and permanently establish the Small Business Skills and Training Boost
- Exploration of tax relief for new small businesses to encourage entrepreneurship and reduce the failure rate of startups in their critical first years.
“The tax system should encourage small businesses to invest, innovate, and hire – yet too often, it does the opposite. A simplified and fairer approach is needed to unlock growth,” said Achterstraat.
Additional proposed measures
Which red tape reduction and tax reform are recurring themes on the small-business legislative wishlist, there are a variety of other measures that the community would like to see in this year’s Budget:
- Workforce solutions to help small businesses attract, train, and retain staff.
- More support with research and development
- Cybersecurity support through investment in digital resilience to protect small businesses from cyber threats.
- Fair payment terms to ensure small businesses are protected and paid on time.
COSBOA warned that without government support in the Federal Budget, small business will continue to struggle under the weight of increasing costs, regulatory complexity, and economic uncertainty, effects that will trickle down to all Australians in the form of entrenched inflation, reduced competition, and declining living standards.
“This budget is a chance to set small businesses up for success, ensuring they have the support, certainty, and conditions needed to power Australia’s economic future. The opportunity cost of inaction is too great,” Achterstraat concluded.
