What happens: The Council of Small Business Organizations Australia has outlined its priorities for the 2026-2027 federal budget, calling for policy settings that enable small businesses to remain viable and invest with confidence.
Why this is important: Rising business costs, especially energy and insurance, continue to depress business confidence and limit their ability to invest, employ and grow in an economy that depends on their success.
Small businesses are resilient, but resilience alone cannot drive Australia’s economy forward, according to the Council of Small Business Organizations Australia, which has set out its priorities for the 2026-2027 federal budget.
COSBOA’s priorities focus on reducing the cost of doing business, especially in energy and insurance, providing certainty to invest through a permanent $150,000 instant asset write-off, tax institutions that support growth and jobs, smarter regulation that reduces duplication, and continued investments in digital capabilities and emerging technologies.
“If we want stronger productivity growth and more secure jobs, the policy environment must support small businesses to invest, hire and expand their operations with confidence,” said Matthew Addison, president of COSBOA. “That means addressing the structural costs, taxes and regulations that shape everyday business decisions.”
Certainty to invest
Legislating permanent instantaneous asset write-down of $150,000 is central to COSBOA’s agenda, giving small businesses the confidence to invest in equipment, technology and vehicles that directly improve productivity and output.
“Small businesses make investment decisions over years, not months,” Addison says. “The certainty in the tax system allows them to plan ahead, upgrade equipment, adopt new technology and increase their production capacity.”
The threshold for immediate asset write-off has fluctuated significantly in recent years. In Budget 2024, the threshold was extended to $20,000 through June 2025, before returning to just $1,000. COSBOA calls for a permanent threshold of $150,000 to provide long-term certainty.
Rising business costs continue to put increasing pressure on small businesses, with energy and insurance costs rising faster for small businesses than for larger businesses.
“Regulatory overlap, double taxation and unnecessary purchasing requirements drive up costs and directly impact cash flow and viability,” Addison said.
Tax reform urgent
According to COSBOA, tax reform remains an important lever for productivity. The peak body is calling for a reduction in the small business tax rate from 25 percent to 20 percent for companies earning less than $20 million, in addition to appropriate tax breaks for unincorporated small businesses, including sole proprietorships and partnerships.
Payroll taxes remain a major concern. COSBOA’s pre-budget survey shows that 89 percent of respondents believe the payroll tax should be revised due to its impact on employment and growth.
“While payroll taxes are administered by the states, the federal government has an important leadership role to play,” Addison said. “A nationally coordinated approach to harmonizing payroll tax regimes, including thresholds, rates and reporting requirements, would reduce complexity, remove barriers to expansion and support job growth across all jurisdictions.”
Workforce and digital future
Labor shortages also remain a significant barrier to small business growth. COSBOA supports targeted incentives for apprenticeships and internships, better recognition of licenses and credentials across the country, and migration settings that are workable for small employers.
Looking ahead, COSBOA says investments in digital capabilities, including AI, are essential for future productivity growth. While many small businesses are already using digital tools, adoption of emerging technologies is hampered by costs, skills gaps and a lack of practical support.
“Small businesses are a core pillar of the Australian economy,” Addison concluded. “Ensuring the right policy settings are in place so they can invest and grow is essential to strengthening Australia’s economic foundations.”
COSBOA will continue to work closely with government to ensure that the voice of small businesses is reflected in policy decisions and that the sector is supported to fully play its role as an engine of jobs, productivity and economic growth.
The full COSBOA pre-budget submission is accessible here.
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