Small business owners have a bit to like and plenty to question in this year’s Federal Budget, with the Council of Small Business Organisations Australia (COSBOA) calling it a “mixed bag” with real concerns around tax changes.

After reviewing the Budget papers, COSBOA says there are some solid steps forward on red tape and investment but the proposed tax tweaks could create headaches for small and family businesses.

“Our initial assessment is that this Budget is a mixed bag for small business.”

Instant asset write-off a win for businesses

One of the clear positives is the move to make the $20,000 instant asset write-off permanent from July 2026.

COSBOA says locking it in gives business owners more confidence to invest in the resources they need to run.

“Permanency gives small businesses greater certainty to plan and invest.”

That said, COSBOA believes the threshold is insufficient to meet businesses needs. The organisation has long advocated for an increase to the threshold, suggesting $20,000 doesn’t stretch far enough for bigger-ticket items like vehicles or machinery that actually move the needle on productivity.

Red tape relief … maybe …

The Treasurer has also promised to cut red tape, including utilising the “tell us once” approach across government, and to introduce a better alignment of payroll tax and licensing rules,plus a push to reduce compliance costs. On paper, it sounds like a win.

“Small business owners spend too much time dealing with compliance and administration instead of serving customers, employing staff, innovating and growing,” said COSBOA in a statement to media.

But COSBOA is mindful that delivery is everything and will be watching closely to see if this turns into less paperwork or just more announcements.

The tax changes causing concern

The good news starts to get a little murkier when it’s time to talk tax. COSBOA says proposed changes to capital gains tax and trust distributions could bring added complexity and uncertainty, especially for small business owners relying on their business as a long-term asset.

“The proposed changes to Capital Gains Tax and the taxation of trusts have the potential to significantly disrupt the retirement plans of many small business owners,” said COSBOA CEO Skye Cappuccio.

For plenty of owners, selling the business is the super plan and if property is tied up in the equation, this could lead to big issues.

“For many Australians, their business is their retirement asset,” Cappucio said.

Costs still an issue

Even with some support measures like fuel relief and extended ATO payment plans, COSBOA says the day-to-day pressure hasn’t eased for small business owners. The bills are still stacking up.

“Small businesses are looking for certainty, simplicity and practical support to help them manage the cumulative pressures of fuel, energy, insurance, wages, rent, freight and compliance costs,” Cappuccio said.

The budget suggests help is coming … just not yet

There are some tax supports in the mix, including a proposed $250 tax offset and loss carry-back measures but timing is an issue.Many of these won’t kick in for a while, meaning cash flow relief is far from immediate.

COSBOA’s message: talk to us first

COSBOA is urging the government to slow down and consult before locking in major tax reforms.

“Small business needs fairness in the tax system, but it also needs stability, certainty and simplicity,” Cappuccio said.

“We are urging the Government to work closely with stakeholders to prevent unintended consequences and ensure these reforms are workable in practice.”

There’s also a push by COSBOA for a carve-out for small business trusts and a drive for better business support so owners can actually understand what these changes mean for them. COSBOA CEO Skye Cappuccio will meat with the Treasurer later today.

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