A new study has highlighted the number one source of frustration among Australia’s small-business owners: taxation
The 2024 Big Small Business Survey revealed that a majority of small-business owners have shared that the country’s tax system is working against them rather than for them, especially in the early years when survival—not scaling—is the goal.
“When businesses are just finding their feet—usually juggling rent, staff costs, equipment, insurance, and marketing (if there’s any budget left)—a big tax bill can feel like the final straw. And unlike bigger corporations, small-business owners don’t have the luxury of offshore tax planning or fancy deductions. Many are just hoping there’s enough left over to pay themselves a wage,” wrote Jenn Donovan, a marketing strategist and the lead author of the report.
It is also noted that the report provides a feedback section for the respondents, which they took advantage of by providing their comments about the unfairness of tax on SMEs, especially new businesses trying to reinvest their revenue and grow.
One respondent in particular was quoted in the study saying, “The tax burden can be a huge handbrake for a young business and significantly impact growth potential and viability in the first five years.”
The study also sheds light on the other challenges facing small business owners that compound their current situation. In particular, 44.89 per cent of small-business owners say rising costs are their number one challenge in 2024 (up from just 19 per cent in 2023) and less than 16 per cent have a clear strategy for increasing prices to offset those costs.
And while AI adoption is on the rise with 63.62 per cent seeing it positively, small-business owners say they’re too busy keeping the lights on to invest in big digital transformation plans.
The report pointed out small businesses are not asking for handouts, only that they would not be penalised for being small businesses.
“If any political party wants to win the hearts (and votes) of Australia’s SME sector, a thoughtful, targeted tax reform policy for small businesses could be the golden ticket. Not flashy. Not gimmicky. Just fair,” Donovan wrote.
Donovan raised a few suggestions that the government can do to ease the tax burden for small business, namely:
- Tax breaks or grace periods in the first 3–5 years of business.
- Simpler reporting and compliance so small businesses can save time and money
- Lower company tax thresholds or tiered systems for micro and regional businesses
- Credits for investing in AI, digital tools, or hiring local talent.
“Right now, the sentiment is clear: small-business owners are proud, hardworking, and resilient—but they’re tired of being treated like an ATM,” Donovan concluded.
