The Albanese Labor Government is backing small businesses as part of our $3.5 billion of new business tax relief to boost investment, increase cash flow and support growth.
Australia's 2.7 million small businesses are the backbone of our economy and this Budget gives them the tools they need to thrive.
Small businesses create jobs and support local communities, but they're also on the front line of cost pressures coming out of the conflict in the Middle East.
That is why they are receiving much‑deserved support in this Budget.
Small businesses will benefit as part of the $3.5 billion of new business tax relief measures which are designed to support resilience, investment and growth:
- Making the $20,000 instant asset write‑off permanent to give businesses more certainty to invest. This change will deliver around $890 million in cash flow support over the next five years, slash compliance costs for small businesses by around $32 million a year and save them 366,000 hours on record keeping.
- Delivering a permanent two‑year loss carry back for companies with turnover of up to $1 billion from 1 July 2026, so that small businesses can return to profitability faster, and have the confidence to invest earlier and withstand volatility.
- Introducing loss refundability to help start‑ups grow in their first two years.
- Expanding tax incentives for venture capital to help unlock more investment in young and expanding businesses.
- Ensuring around 1.5 million sole traders benefit from our $250 tax offset from 2027-28, as part of our plan to reduce the tax burden on working Australians.
We are also providing expanded rollover relief from income tax consequences, including capital gains tax, for small businesses currently operating through a discretionary trust to transition to another small business structure.
In addition to benefiting from the $3.5 billion in overall business tax relief, small businesses will also benefit from a range of other new measures in the Budget.
We are delivering $2.9 billion in fuel excise relief and slashed the heavy vehicle road user charge to zero for three months to 30 June 2026 to relieve fuel costs on businesses and families.
The Budget's productivity package will slash red tape, cut regulatory costs by over $10 billion and make it easier to do business across states and territories.
The Commonwealth will continue to lead on National Competition Policy reforms that will boost GDP by around $13 billion a year.
Tradies and small businesses will save up to $1,600 a year because of our decision to make mandatory standards in Commonwealth, state and territory legislation free.
We will adopt a 'tell us once' approach to avoid giving the same information to government agencies over and over, and we are working to harmonise payroll tax arrangements with the states.
We will also improve our skills recognition system to make it easier and quicker to hire migrant trades workers by up to six months and reforming the migration points test for skilled visas to ensure we're getting the skilled migrants our economy needs.
These measures are on top of the support we are already rolling out for small businesses across the economy.
We are working with the ATO and regulators to ensure flexibility for small businesses during these difficult economic circumstances, improving access to credit by extending the exemption to the Small Business Lending Obligation, and are providing an additional $8 million to support the mental health and financial wellbeing of small business owners.
The Government has empowered the ACCC to protect small businesses from getting ripped off by the big players and made reforms to the Payment Times Reporting Scheme to ensure they're getting paid on time.
We are also levelling the playing field for brick‑and‑mortar retailers by imposing compulsory product safety obligations on international and domestic online retailers.
This is all part of our plan to back small businesses during these difficult economic times, create a better tax system for businesses and create a more productivity and more resilient economy.
