Small business owners could be left paying more tax and taking fewer risks after the Federal Budget, with CPA Australia warning the changes amount to a “tax grab” rather than meaningful reform.

The accounting body says the government’s tweaks to capital gains tax and investment settings risk hitting entrepreneurs, mum-and-dad investors and anyone trying to grow a business.

“This is not tax reform – it’s a revenue measure that shifts more of the burden onto middle Australia,” said CPA Australia Tax Lead Jenny Wong.

Small businesses  the losers

For small business owners, particularly those using trust structures, the changes could mean higher effective tax rates and less flexibility.

“Small businesses are already dealing with rising costs and uncertainty. This doesn’t improve confidence or encourage investment,” Wong said.

She warned that while there are some positives in the Budget, they’re outweighed by broader changes that make running and growing a business more expensive and complex.

‘A minimum tax on aspiration’

One of the biggest concerns is how the new settings affect risk-taking.

“For anyone looking to invest, grow a business or take on risk, the message is clear – the government will take at least 30 per cent, regardless of the outcome,” Wong said.

“That effectively creates a minimum tax on aspiration, and it sends the wrong signal at a time when Australia should be encouraging investment, not discouraging it.”

That matters for small business because investment fuels growth, whether that’s hiring staff, launching new products or expanding into new markets.

Investment and talent drain

CPA Australia also warned the changes could push capital and talent overseas.

“Why would you build and grow a business here when other markets are more supportive of investment and innovation?” Wong said.

“We risk losing not just capital, but our most ambitious and entrepreneurial talent.”

For small business owners, that could mean a tougher environment to attract funding, partners and skilled workers.

More complexity, less fairness

Another sticking point is complexity. “The more complicated the system becomes, the more it advantages those with access to advice and the ability to restructure,” Wong said.

“This is not levelling the playing field – it’s tilting it even further in one direction.”

Bigger players with deeper pockets can navigate the system. Smaller operators just end up paying more.

A missed chance to back small businesses

CPA Australia says the Budget missed an opportunity to properly support productivity and growth, especially for smaller operators.

“Productivity depends on investment – particularly in higher-growth areas like start-ups, innovation and expanding businesses,” Wong said. “These changes make that equation harder.”

There was also disappointment at the lack of stronger measures to lift digital capability among small businesses.

Not all bad news

It’s not entirely grim. CPA Australia pointed to the government’s productivity push as one of the brighter spots, including efforts to reduce red tape. But overall, the verdict is a thumbs down for small business.

“Instead, we’ve seen changes that raise revenue, increase complexity and discourage risk-taking,” Wong concludes.

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