The Council of Small Business Organisations Australia (COSBOA) is calling on policymakers to cut the small business company tax rate and provide instant relief to the struggling small business sector, which is “the engine room of our economy”.
As the Federal Election kicks off, COSBOA wants the tax rate for small businesses with an annual turnover of $20 million or less reduced to 20% from the current rate of 25%. Other tax rates would stay the same.
COSBOA CEO Luke Achterstraat says small businesses were bearing the brunt of the cost-of-living crisis and suffocating red tape. National polling from independent pollster, Insightfully, identified broad voter support for the tax cut, with 69% of voters saying the cut would provide much needed relief for small businesses. In marginal seats, this increased to 76%.
“Small businesses are the engine room of the Australian economy and part of our social fabric. They are local cafés, where we catch up with friends. They are farming families that grow our food. They are the baker who is up at 3am every day to bake our bread. And behind every small business is a family, their staff and their customers.” Mr Achterstraat said.
“But small businesses are doing it tough. Like their customers, they’re bearing the brunt of the cost-of-living crisis, red tape is increasing, and staff are getting harder to find. Our research shows that without urgent change, 50% of small businesses are worried about surviving.
“That’s why COSBOA is calling for sensible changes to enable small businesses to keep prices stable, employ more staff and invest in innovation so they can compete with huge multi-nationals. Cutting the tax rate would have an instant impact and provide Australian small businesses with the fair go they deserve.”
Small businesses comprise 97.7% of all Australian businesses, employ more than 5.1 million people in our communities and contribute $500 billion a year to the economy. In regional and remote Australia, areas more reliant on small businesses, they are the heartbeat of the community.
“This tax cut would provide instant respite to Australian small businesses and let them focus on what they do best – running their businesses and serving our communities,” Mr Achterstraat said.
“Investment growth has been lacklustre in Australia, leading to reduced competition, higher prices and lower living standards. RBA research confirms lower tax drives new investment.”
“With this simple, sensible change Australian small businesses will be primed to thrive now and into the future, better able to contribute to the economy and their communities.”
Other key insights:
- Net favourability of Anthony Albanese is lower among small business households, at -20 points (less that the national average of -16 points).
- Net favourability of Peter Dutton is higher among small business households at +0 points (higher than the national average of -22 points).
- Small businesses employ and educate more than 40% of Australian apprentices and trainees.
- 40% of small businesses experience difficulty hiring and retaining staff.
