Fairlie Hamilton:
Fresh data released by ASIC has revealed 14,011 businesses collapsed during the 2025–26 financial year alone, compared with just over 8,000 the year prior to the COVID pandemic. Now, if you run a small business, you’re probably well aware of the challenges, including skyrocketing overheads such as energy and fuel bills, wage and super increases, lower consumer discretionary spending due to a high cost of living and also compliance burdens, to name a few. The construction and trade sectors have been hardest hit due to supply costs and project delays. Small business owners were not really put at ease following the announcement of the 2026 Federal Budget. While the $20,000 instant asset write‑off was welcomed, changes to capital gains and discretionary trusts were cause for concern as well as a lack of targeted support for retail and manufacturing. Coalition leader Angus Taylor has taken aim at the government and has positioned small business at the centre of his economic agenda, advocating for deregulation and tax relief while fiercely criticising the government’s economic policies. Here’s some of what he’s had to say.
[Excerpt]
Angus Taylor:
They should go out and talk to a few small business people like we did this morning. They’ll hear it. They’ll hear it loud and clear.
Speaker:
The Treasurer said about trusts, the discretionary trusts and some Australians, some wealthy Australians, avoiding paying tax by using that setup.
Taylor:
You know, this is a structure that most small businesses in this country use. Small businesses that are squeezed, small businesses that are going out backwards. Small businesses where the people working, the family members working in that business are working harder than they ever have for less. Talk about working harder for less. Nowhere do I see that more than among small businesses around the country right now. And now, and now, in this government’s assault on aspiration, they want to force every one of those small businesses to restructure and Lord knows what that’s going to end up costing them in accounting fees, in legal fees, in stamp duty. I mean, have they thought about the stamp duty? This Treasurer hasn’t got a clue. This government hasn’t got a clue. You know why? Because none of them have ever worked seriously in small businesses. None of them understand it. They don’t get it. They haven’t got a clue. They should go out and talk to a few small business people like we did this morning. They’ll hear it. They’ll hear it loud and clear.
[End of excerpt]
Hamilton:
That’s Coalition leader Angus Taylor on small business. Joining me now is Dr Anne Aly, Federal Minister for Small Business. Dr Aly, good afternoon.
Anne Aly:
Good afternoon, Fairlie.
Hamilton:
Now look, what is your response to seeing 14,000 small businesses close their doors in the past financial year?
Aly:
Well, first of all, let me say we know that small businesses are doing it tough. It’s the reason that we have $3.8 billion of supports for small business in the last Budget. I do want to make a really important point about the number of insolvencies, because if you look at the number of insolvencies as a proportion of companies, that is as a percentage of all companies under the Albanese government since we’ve been in office since 2022, they have been around the lowest of any government on record.
They are at 0.31 per cent of all companies. That makes them lower than they were under John Howard. They were at 0.5 per cent under John Howard, and lower than they were under 9 years of Abbott, Turnbull and Morrison. They were 0.32 per cent in those 9 years, and almost half of what they were at the pre‑COVID average. So, when you look at the number of insolvencies as a percentage of all businesses since the Albanese government has come into office in 2022 each month there are around 26,800 new companies registered according to ASIC data. Really when you look at that number of insolvencies, you need to look at it in its entirety as a proportion of companies started.
Hamilton:
Okay, look, can you recap for us how the Budget will target and support small business?
Aly:
There’s a number of things in the Budget. We’ve got $3.8 billion, as I mentioned, of supports to small business, such as making the instant asset write‑off permanent. That’s the $20,000 instant asset write‑off permanent for small businesses. You’ve got two‑year loss carry back. That means that businesses who make a loss in their first 2 years can carry back some of that loss in future years so that they can continue to sustain and to grow. But we’ve also got supports for small businesses. One of the ones that I want to mention and particularly in the context of what the headlines are talking today about AI for example, is the Digital Solutions Program. Now small businesses in Australia are really great at using digital solutions technology, such as AI for marketing and for communications. They’re not very good at using it to improve their operations, their day‑to‑day operations, and their productivity. We’ve got the Digital Solutions Program with a new focus on AI to help small businesses in uptake of digital solutions to help them with their productivity. Part of the Budget is also about removing red tape. And we did this when we first set it up under the previous Small Business Minister. For the first time in a very long time, we had Small Business Ministers meetings with every state and territory and for the first time, we have a national Small Business Strategy. And under that Small Business Strategy, it’s an undertaking by the Commonwealth and States and Territories to remove red tape and remove the regulatory burden on small businesses that I hear so much about when I go and visit with small businesses, or when I hold small business roundtables, or when I meet with small business advocates or consultative groups.
Hamilton:
Look, Dr Aly, there are 2 points there that I sort of want to pick up from what you said. Many people say that the $20,000 in the instant asset write‑off, it’s not enough. With the increase in prices and the cost of living, things have gone up, supplies have gone up, $20,000 is potentially not enough. The second thing is with the digital solutions, I mean, it sounds great in theory, but at the end of the day, you know, converting business practices to digital options or AI, it’s taking away jobs that currently exist for real people. I mean, how would you respond to that?
Aly:
Let me start with the instant asset write‑off. First of all, it’s instant asset, it’s $20,000 per asset. Then you can use that as many times as you like. You can have 10 or even more times that you can use that $20,000. So, it’s not a $20,000 limit per se, it’s a $20,000 limit per asset. So, you can use that as many times as you want.
Hamilton:
And what is categorised as an asset?
Aly:
Let’s say you run a coffee shop and you want a new coffee machine, that’s an asset. You want chairs and tables, that’s an asset. So, anything that you use to generate an income in your business can be written off under the instant asset write‑off.
Hamilton:
All right, so what about stationery bills for small business? Are they assets?
Aly:
It depends on whether they’re being used in the generation of the business. Normally they wouldn’t come under assets if it was a machine that was used, for example, and that’s mostly where small businesses use it. For example, I’ve visited coffee shops that have used it to purchase, as I said, coffee‑making machines. Coffee machines, probably the most popular example that I can think of.
But just moving to the digital solutions as well and to AI. What I’m talking about here is, okay, so I’ve owned small businesses in the past. And when you, when you start up a small business, you are everything to that small business, right?
Hamilton:
Yeah.
Aly:
You are the accountant. You are doing the accounts, you’re doing the tax, you’re doing the actual day‑to‑day of the business as well. You’re doing marketing and you’re doing communications with consumers as well. You’re pretty much a Jack‑ or a Jill‑of‑all‑trades when you run a small business. When I talk about using digital solutions and technology in business to run your operations, I’m talking about things like being able to meet your regulatory requirements, using AI or using digital solutions to make that smooth and easy for you. I’ll give you a really good example of this. I visited a small business here in WA and they do trophies, and they had kind of the community of people who do, small businesses that do trophies had set up a software system that was specifically for them. It meant that they could track their orders, track their supplies, track their inventory using this one digital solution. That’s what I mean when I say using digital, using tech, using AI in the everyday operations. We’re not talking here about replacing workers. We’re talking here about making the operations of a small business smoother and easier for small business owners themselves who are doing all of that work.
Hamilton:
Okay, look, as we heard in that audio that I played from Angus Taylor, he took aim at the changes to discretionary trusts, stating that it’s a frequently used set‑up for small business. What is your response to that?
Aly:
Let me make this very clear. The changes that we announced are only applying to discretionary trusts, and they’re not applying to discretionary testamentary trusts. That’s important because discretionary testamentary trusts that are set up to protect assets for inheritance are not included in this. A discretionary trust, for the benefit of your listeners, is where a business is set up in a way that then the income from the business is distributed to family members or members of that trust.
What we’re doing is introducing a 30 per cent minimum tax on discretionary trusts. There are a couple of options here for small businesses. But the first point I want to make is that this only affects around 10 per cent of small businesses. 90 per cent of small businesses, even those that operate under a discretionary trust will not be affected at all. It affects 10 per cent of all small businesses. Active small businesses. Now, the options for small businesses, there are 2 options here. They can change from a discretionary trust to a different kind of trust, say a fixed trust, and plan for their tax affairs in that way. Or they can take advantage of the lower company tax rate for small businesses, which is a 25 per cent company tax rate for small businesses. And we’ve included in the Budget a package to help support them as they transition and restructure.
Hamilton:
All right, Dr Aly, I’m going to let you go in a moment. One more question, just on a bit of a separate note from the small businesses. You met with Telstra on Monday about compensation for small business following the outage last week. What came of that conversation?
Aly:
Yeah, I did. I really wanted to get some clarity from Telstra about the process for small business and making sure that they weren’t going to make small businesses jump through a whole lot of hoops to get the compensation that they’re entitled to if the outage has impacted on their business. I spoke to them about what’s the time frame for the process and what does the process look like for small businesses. I want to keep having those conversations because I want to be assured that small businesses aren’t put out by having to apply for compensation that they’re entitled to.
Hamilton:
Thank you. There you go. Dr Anne Aly, who is the Federal Minister for Small Business.