The peak body representing Australia’s 2.6 million small businesses has doubled down on its call for the Albanese Government to cut the company tax rate.
The Council of Small Businesses of Australia (COSBOA) confirmed to this masthead it would take its proposal to lower the tax rate from 25 per cent to 20 per cent for businesses with an annual turnover less than $20 million to the next election.
Matthew Addison, COSBOA’s chair, said a lower tax rate – and less red tape – would help small businesses grow and encourage investment in local communities.
“Australia’s corporate tax system has become far too complex, taking valuable time and energy away from small business owners who should be focused on running and growing their businesses,” he said.
“We need a system that is as simple as possible, not another layer of red tape from cash flow taxes or new compliance hurdles.”
According to the OECD, Australia’s effective company tax rate of 28.5 per cent is the second highest among advanced economies, behind only Colombia on 32.9 per cent.
In 2024, on average, companies in New Zealand handed over 27 per cent of their income in tax, compared to 23.7 per cent in Canada, 22.7 per cent in the United States, and 22.6 per cent in the United Kingdom.
Scott Etherington, who runs Gulgong Post Office in the Central Tablelands of New South Wales, said a lower company tax rate would allow him to invest more money in his local community.
“Any extra red tape for a small business is incredibly burdensome,” he said.
“[A lower rate] means I’m going to spend more money in my community. Not overseas, not somewhere else … it doesn’t get shipped off to Canberra to do other things.”
“My income stays in this local community, and if you let me keep more of it here, I get to spend more of it here.”
Luke van der Rijt, who runs Southcity Pharmacy in Wagga Wagga, NSW, said the burden from company tax – on top of payroll tax and GST – was a “problem” for a lot of local businesses.
“Managing all those together can be quite challenging,” he said.
“The bills can sum and be quite hefty, especially on top of other bills which are continuously rising … definitely if there was a reduction, that would encourage reinvestment in either staff or extra fit-outs we could do.”
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Bran Black, chief executive of the Business Council of Australia – which represents the nation’s biggest employers – said a “more globally competitive tax system” was needed to drive the investment required to fix the housing crisis and fund the energy transition.
“We have the fifth-highest company tax rate in the OECD, and that means the world’s major economies – and yet not us – have recognised the enormous economic benefits to be secured with a more competitive tax offering”, Mr Black said.
“Simply put, my members tell me that our tax setting drive investment opportunities away from our shores.”
This article is part of the Back Australia series, which was supported by Australian Made Campaign, Harvey Norman, Westpac, Bunnings, Coles, TechnologyOne, REA Group, Cadbury, R.M.Williams, Qantas, Vodafone and BHP.
Originally published as Small business doubles down on call for a corporate tax cut
