COSBOA sets out priorities for the 2026–27 Budget backing small business investment, jobs and productivity

The Council of Small Business Organisations Australia (COSBOA) has set out its priorities for the 2026–27 Federal Budget, outlining the policy settings needed this year to ensure small businesses can remain viable, competitive and confident to invest.

COSBOA’s priorities for the Budget focus on:

• Reducing the cost of doing business, particularly energy and insurance

• Providing certainty to invest through a permanent $150,000 Instant Asset Write-Off

• Tax settings that support growth and jobs, including payroll tax reform and a lower small business tax rate

• Smarter regulation that reduces duplication and compliance burden

• Workforce and skills policies that reflect the realities of small employers

• Continued investment in digital capability, cyber security and emerging technologies, including AI

• Reform of the Regulatory Impact Statement process including the implementation of a Small Business Impact assessment

COSBOA Chair, Matthew Addison said the priorities reflect long-standing structural pressures that continue to weigh on small businesses and limit their capacity to invest, employ and grow.

“Small businesses are resilient, but resilience alone cannot carry the economy forward.

If we want stronger productivity growth and more secure jobs, the policy environment has to support small businesses to invest with confidence, employ people and expand their operations.

That means addressing the structural cost, tax and regulatory settings that shape day-to-day business decisions,” said Mr Addison.

Providing certainty to invest is central to COSBOA’s agenda. Legislating a permanent $150,000 Instant Asset Write-Off would give 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. Certainty in the tax system allows them to plan ahead, upgrade equipment, adopt new technology and lift their productive capacity.”

Rising operating costs continue to weigh on business confidence, placing increasing pressure on small businesses.

“Energy and insurance costs are rising faster for small businesses than for larger firms.

Regulatory overlap, duplicative taxes and unnecessary procurement requirements are driving costs up and directly affecting cash flow and viability,” Mr Addison said.

Tax reform remains a key productivity lever. COSBOA is advocating for reducing the small business company tax rate from 25 per cent to 20 per cent for businesses earning under $20 million, alongside appropriate tax incentives for unincorporated small businesses, including sole traders and partnerships.

Payroll tax remains a significant concern for small businesses, with COSBOA’s pre-budget survey finding that 89 per cent of respondents believe payroll tax should be overhauled due to its impact on jobs and growth.

“While payroll tax is administered by the states, the Federal Government has an important leadership role to play,” Mr Addison said.

“A nationally coordinated approach to harmonising payroll tax regimes, including thresholds, rates and reporting requirements, would reduce complexity, remove barriers to expansion and support employment growth across jurisdictions.”

Workforce shortages also remain a significant constraint. COSBOA supports targeted incentives for apprenticeships and traineeships, improved recognition of licences and qualifications nationwide, and migration settings that are workable for small employers.

Looking ahead, COSBOA says investment in digital capability, including AI, is essential to future productivity growth. While many small businesses already use digital tools, adoption of emerging technologies is being held back by cost, skills gaps and lack of practical support.

“Small businesses are a core pillar of the Australian economy. Ensuring the right policy settings are in place so they can invest and grow is essential to strengthening Australia’s economic foundations,” concluded Mr Addison.

Small businesses account for around 2.6 million businesses across Australia and contribute approximately one-third of national GDP, operating in every sector of the economy.

COSBOA will continue to work closely with Government to ensure the voice of small business is reflected in policy decisions and the sector is supported to play its full role as an engine of jobs, productivity and economic growth.

The full COSBOA pre-budget submission can be accessed here.

-ENDS-

Notes to Editors:

For media enquiries or interviews, please contact Matthew Addison, Chair, COSBOA on chair@cosboa.org.au or call +61 (0) 421 553 613.

About COSBOA

Established in 1979, The Council of Small Business Organisations Australia (COSBOA) is a member based not-for-profit organisation exclusively representing the interests of small businesses. The capability, representation, and reach of COSBOA are defined by a mix of over 50 national and state-based members. COSBOA's strength is its capacity to harness its members' views and advance consensus across policy areas common to many.

Our member organisations work with the COSBOA team to assist us with policy development and guide our advocacy - not just for small businesses but also for the benefit of the Australians they employ. In this capacity, COSBOA makes submissions and representations to the government, including its agencies, on issues affecting small businesses and to pursue good policy.

www.cosboa.org.au