The cost of compliance is front and centre of the small business lobby’s 2026-27 federal budget wishlist, which puts regulatory simplification and red tape reduction on the same pedestal as overall tax reform.
The Council of Small Business Organisations Australia (COSBOA) publicly released its latest pre-budget submission on Monday, outlining where it sees the most pressing need for small business support and new government expenditure.
Australian small businesses face a “disproportionate burden from regulatory compliance” compared to their larger competitors, which have internal resources capable of handling complex rules and standards, according to the submission.
It describes a “cumulative burden” from overlapping federal, state, and local government rulebooks, which “creates significant barriers to business growth and competitiveness”.
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In the coming financial year, COSBOA is calling for the government to reduce regulatory duplication from federal legislation.
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Recommendations include a standardised definition of ‘small business’ that covers enterprises with up to 50 employees, replacing a mixture of definitions used across Australia’s tax, industrial relations, and statistical systems.
The organisation also wants licenses and qualifications gained in one state to count in another, building on Productivity Commission recommendations that Australian state governments reduce “overly restrictive and inconsistent” occupational entry regulations.
And when new legislation affecting small businesses is brought before Parliament, COSBOA argues in favour of mandatory small business impact statements to determine if they will bring undue burden on small traders.
AI, payday super in the spotlight
The submission deals with other issues specific to the moment.
Small businesses should face new government advisory services to help them make the most of artificial intelligence, COSBOA says.
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While the organisation last year partnered with OpenAI for a report outlining the technology’s economic opportunity for SMEs, COSBOA says any government support platform should be “technology-agnostic”.
The impending launch of payday superannuation warrants a mention, with the organisation flagging that small employers will require significant educational resources and guidance even past the July 1 launch date.
And evergreen issues like tax reform also fill the submission.
COSBOA maintains its position that the instant asset write-off be made permanent with an asset limit of $150,000, up from its current $20,000 threshold through the current financial year.
While the Productivity Commission last year suggested reducing the overall corporate tax rate for all but the largest companies to 20% and instituting a 5% cashflow tax, COSBOA is concerned that small business benefits from the overall lower tax rate would be “wiped out” by the cashflow tax component.
The submission will join hundreds of others to inform the federal government ahead of the budget’s delivery on May 12.
