Productivity starts with small business: COSBOA urges bold reform to drive national growth

The Federal Government Productivity Commission has opened consultation in five key areas of national productivity; the Council of Small Business Organisations Australia (COSBOA) says this inquiry provides a timely and welcome opportunity to highlight what small businesses need to thrive – and how their success is central to Australia’s economic future.

COSBOA CEO Luke Achterstraat said the focus on boosting productivity aligns with the reality small business owners face every day, and the Government now has a clear chance to remove the barriers holding them back.

“This inquiry comes at a crucial time. Small businesses are under significant pressure from rising costs and compliance burdens,” Achterstraat said.

“To lift national productivity, we must address the twin engines of small business success – tax reform and red tape reduction. Without action here, we risk productivity stagnation and declining competitiveness.”

COSBOA is calling for targeted measures such as reducing the small business company tax rate from 25% to 20% and making the instant asset write-off permanent, to unlock investment and support long-term growth.

“Unlocking small business potential is essential to lifting productivity. Every hour a small business owner spends navigating complex regulations is an hour not spent serving customers, training staff, or growing their business,” Achterstraat said.

“Cutting red tape is not just good policy – it’s an economic necessity.”

The Productivity Commission’s inquiry will examine five key areas of national productivity:

• Creating a more dynamic and resilient economy

• Building a skilled and adaptable workforce

• Harnessing data and digital technology

• Delivering quality care more efficiently

• Investing in cheaper, cleaner energy and the net zero transformation

COSBOA identifies the importance of recognising small businesses as core contributors across all five areas.

Creating a more resilient economy: Small businesses drive innovation, competition and employment. Supporting their sustainability through fairer tax policy and less regulatory burden will result in a more resilient national economy.

Building a skilled and adaptable workforce: COSBOA’s current Small Business Skills and Training Needs Survey identified small businesses need flexible, fit-for-purpose training pathways. Persistent skill shortages and outdated occupational entry barriers are limiting productivity gains across industries.

Harnessing data and digital technology: COSBOA supports smart digital reform but warns that removal of the small business exemption in the Privacy Act would impose significant costs on already stretched operators. Any reform must balance innovation with practical implementation for small business.

Delivering quality care more efficiently: With one in seven small businesses operating in the health sector – including GPs, pharmacists, allied health and natural therapy providers – COSBOA highlights their vital economic and community contributions, which must be recognised in health system reform.

Investing in energy and the net zero transformation: COSBOA’s Small Steps Bright Future research shows small businesses want to embrace the energy transition but are held back by costs and a lack of tailored support. Financial incentives, practical advice, and accessible education are key to making net zero a reality.

“Small businesses represent 97.7% of all Australian businesses and employ over five million people,” said Achterstraat.

“Policy that supports their productivity is policy that supports Australia's prosperity. A small business-led recovery is the only way to create jobs, strengthen the economy, and ensure Australia remains globally competitive.”

COSBOA will continue to work closely with the Albanese Government and the Productivity Commission throughout the consultation process to ensure small businesses are given a fair go – and the tools they need to thrive.

For more on giving small businesses a Fair Go, visit: cosboa.org.au 

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For media enquiries or interviews, please contact Luke Achterstraat, Chief Executive Officer, COSBOA on ceo@cosboa.org.au or call +61 (0) 433 644 097.

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.

For more information, visit www.cosboa.org.au