If Australia is serious about productivity, small business must be central to the solution

The Council of Small Business Organisations Australia (COSBOA) says lifting national productivity will depend on practical reforms that enable small businesses to invest, attract skilled staff, innovate and operate efficiently.

In a first public statement as CEO, Skye Cappuccio says her immediate priority has been engaging with small business community leaders, industry bodies and associations to understand the structural barriers limiting productivity and growth across the sector.

“Productivity is central to the national economic discussion,” Ms Cappuccio said.

“In these early weeks, I have been listening closely to what small businesses need right now to invest with confidence, adopt new technology, attract skilled staff and plan ahead.

“If Australia is serious about productivity, we need to be clear about what enables small businesses to perform at their best.”

Ms Cappuccio said productivity in small business is practical and measurable.

“It comes from capital investment in equipment and technology. It comes from smarter systems and digital tools. It comes from skills, capability and certainty.

“It also comes from reducing the time and resources spent navigating unnecessary compliance and regulatory complexity.”

Drawing on COSBOA’s recent policy work and pre-Budget engagement, Ms Cappuccio said five structural levers stand out as critical to unlocking productivity and growth.

Investment certainty

“Capital investment remains one of the most direct drivers of productivity,” Ms Cappuccio said.

“A permanent $150,000 Instant Asset Write-Off would provide the certainty small businesses need to invest in the tools, software and equipment that directly increase output.

“When settings are temporary or unpredictable, investment decisions are deferred. Certainty enables planning.”

COSBOA continues to advocate for tax settings that improve reinvestment capacity, including a lower small business company tax rate and appropriate incentives for unincorporated businesses.

Artificial intelligence

Ms Cappuccio said artificial intelligence presents a significant opportunity to reduce administrative burden and improve operational efficiency.

“Small businesses are already using AI in practical ways, from marketing and customer engagement to back-office processes,” she said.

“What they need is practical support; AI-enabled advisory tools, targeted digital literacy programs and proportionate regulation that encourages responsible adoption without creating additional complexity.

“Reducing administrative load is one of the clearest pathways to lifting productivity.”

Cyber resilience

As digital adoption accelerates, cyber capability is foundational to economic participation.

“Small businesses operate in increasingly complex digital environments, often without in-house IT resources,” Ms Cappuccio said.

“Long-term investment in programs such as Cyber Wardens, alongside right-sized privacy regulation, is essential to protect productivity gains and maintain trust.”

Workforce capability

Ms Cappuccio said access to appropriately skilled staff is a critical but often overlooked driver of small business productivity.

“Small businesses are not large corporations on a smaller scale. They require flexible, fit-for-purpose training pathways and workforce settings that reflect how they actually operate,” she said.

“Persistent skill shortages across sectors are directly constraining growth, delaying expansion and limiting output.”

COSBOA continues to advocate for improved recognition of qualifications across jurisdictions, streamlined migration settings to address critical workforce shortages and targeted incentives that support small businesses to invest in training and apprenticeships.

“Productivity depends on having the right people with the right skills at the right time. Without workforce capability, investment in technology and systems cannot deliver its full potential,” Ms Cappuccio said.

Removing structural barriers

Ms Cappuccio said productivity reform must also address the cost pressures and regulatory duplication constraining reinvestment.

Escalating energy and insurance costs, payroll tax complexity and overlapping compliance requirements continue to absorb time and capital that could otherwise support growth.

“Every unnecessary compliance layer reduces the capacity to invest and grow,” she said.

“Reforms such as payroll tax harmonisation, targeted energy efficiency support, insurance market reform and mandatory Small Business Impact Statements go directly to improving business confidence and productivity.”

Reflecting the collective voice

Ms Cappuccio said COSBOA’s role is to reflect the collective experience of small business community leaders across sectors.

“The message we are hearing is consistent,” she said.

“Small businesses want to invest. They want to innovate. They want to grow. But they need certainty, proportionate regulation and practical support.

“If policy settings align with the operational realities of small business, productivity gains will follow; and so will broader economic strength.”

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

-ENDS-

Notes to Editors:

Media contacts:

• Debbie Bradley, Group Account Director, Zadro | debbie@zadroagency.com.au | +61 420 761 189.

• Marlise Beasley, General Manager & Account Director, Zadro | marlise@zadroagency.com.au | +61 423 624 013