The crux of any federal election should, at its most simplistic, come down to the base question of which party or Prime Minister is going to do the most to help you, your family, where you live and where you work.
With 98 per cent of all businesses in the transport sector classified as small businesses – and 97 per cent of businesses Australia-wide landing in the category – any potential help that can be afforded to those who own and operate small businesses often becomes a key election issue, and 2025 is proving no different.
One of the most recent battlegrounds has been the Labor Party agreeing to extend its $20,000 instant asset write-off scheme for another 12 months, while the Coalition has promised to not only make the scheme permanent, but also boost it to $30,000.
The scheme is only available for businesses with less than $10 million in annual turnover.
However, organisations and those in the transport sector say there is far more either major party could do to help aid small businesses and, by extension, many of those who operate in and around the transport sector.
The Council of Small Business Organisations Australia (COSBOA) has pitched one of its key solutions to easing financial pressures on small business owners to both parties with a new federal election campaign.
The campaign has called on policymakers, regardless of political leanings, to slash the small business company tax rate from 25 per cent to 20 per cent for businesses with an annual turnover of $20 million or less.
COSBOA CEO Luke Achterstraat tells ATN a reduction in the tax rate would allow small businesses the breathing room they need to absorb the consistently increasing price of operation.
“A tax cut for small businesses would allow a lot of smaller operators and owner-operators to free up cash flow in their business,” Achterstraat tells ATN.
“We’re conscious it has been a really tough few years for small businesses, and they’re being squeezed in terms of rising costs – be it energy, rent, insurance or borrowing costs.
“Everywhere you look, there has been an increase in costs, and we know small businesses often can’t pass those costs onto their customers and need to absorb it themselves.
“There is obviously a range of other policies we have advocated for, but for us this is a bit of a watershed moment where we want to slash that tax rate from 25 per cent to 20 per cent and help small businesses whether they’re in road transport, logistics, agriculture, hospitality, or anything else.
“We want to allow them to reinvest more of that money back into their business.
“This is about sending a clear message to the small business sector that they are being backed in, they are valuable, and we want that message to help get confidence levels back up.”
Those confidence levels, it seems, are at an all-time low.
Margins in the transport industry, which are historically thin, seem to be sitting on a knife’s edge – but those razor thin margins are, sadly, not unique to our industry.
The rate of business closures in Australia reached a four-year high in November 2024, with data released by debt monitoring firm CreditorWatch showing the failure rate of businesses in the prior month rose to 5.04 per cent, which was the highest since the 5.08 per cent registered in October 2020.
Business insolvency rates in 2024 were also roughly 25 per cent higher than they were prior to the pandemic.
These figures must be taken with a small pinch of salt as they do not discern what type of businesses have closed, but considering such a large percentage of businesses in Australia are classified as small businesses, it is wholly likely most of these new insolvencies fall into the category.
“The insolvency records are completely shocking,” Achterstraat continues. “The challenges associated with that come from a variety of reasons.
“We’ve spoken to small businesses whose energy bills have doubled or tripled in a reporting period.
“To use cafés as an example, we speak to café owners who are paying $7000 a quarter on energy. That’s a lot of cups of coffee.
“Labour costs are also rising. To be clear, we want to see people being well renumerated and we want a high wage economy, but in industries like hospitality when penalty rates kick in, you’ve got baristas who are on $70 an hour.
“It’s these rising costs that are the number one issue leading to insolvencies, and what I think people need to understand is we’re basically sleepwalking into a corporatised, consolidated economy.
“What that’s going to do is run the risk of ending up in a scenario where in any industry you have a McDonald’s and a Hungry Jack’s – two big players – and no room for anyone else.
“That lower competition will mean higher prices for everything else.”
But why a five per cent drop to 20 per cent? Why not campaign for more, like a 10 per cent drop, or for something smaller but likely more easily achievable, like a two per cent drop?
The answer, according to Achterstraat, is simple.
Australia’s tax system currently splits company tax straight down the middle at $50 million of turnover.
Any entity above that $50 million mark is taxed at 30 per cent, and anything below that number is taxed 25 per cent.
The existing logic that is applied to Australia’s existing corporate tax structure, and the desire to effect genuine change for small businesses, has driven the push to consolidate a five per cent tax reduction for small businesses.
“We saw a logic in it being a number that was substantial, but also put forward in a pretty sensible way,” Achterstraat says.
“We will be putting out our costings and modelling in the not-too-distant future, and we think that will really speak to the impact this would have on productivity and living standards.
“But that logic extends to when you look at the structure of our corporate tax system. You have entities above $50 million paying a rate of 30 per cent, and those under $50 million paying 25 per cent.
“There is already a five per cent gap there, and our logic in introducing another tier is that firms up to $20 million – so small businesses – should be able to access an even lower tax rate.
“That five per cent spacing presents a logical and well-structured system but is also significant enough to really help drive new investment back into those businesses and alleviate the tax burden they have to pay.
“The feedback we get all the time is you work so hard to produce your products or provide your service, you hire people, absorb all these costs, overcome all the red tape and paperwork, all the compliance costs, you work through all of that and then such a significant sum goes to the tax office.
“I would imagine particularly in road transport that the difference in state and federal regulations adds another layer of costs, so we feel that five per cent could really help free up that cash flow and help small businesses get back on their feet.”
The effects of a drop in tax for small businesses may not just have a positive impact for those who operate in or engage with small businesses, but it could help give the economy an extra overall boost.
Small businesses employ roughly 70 per cent of the Australian workforce and generate one third of Australia’s GDP with roughly $500 billion of annual economic activity.
They are also crucial for the survival of Australia’s regional and rural areas, many of which rely on long-term and established small and family businesses to continue to knit the community together and provide essential services.
There is, however, a worrying trend emerging among small business owners, and it’s the same trend that is threatening to derail Australia’s truck driving capacity in the coming years.
The average small business owner, much like the average truck driver, is aging rapidly.
“We have a bit of a burning platform in Australia where the average age of small businesses is increasing,” Achterstraat says. “It’s well above 60 now.
“We’re not seeing a pipeline of new small business owners and entrepreneurs coming into the economy, and that’s really concerning.
“We need to make it more attractive to not only run a small business, but to actually start one.
“We hope that an added relief on tax would help foster that as a benefit we’d see in the long-term.”
At the moment, COSBOA’s calls to reduce the small business tax rate is one among a cacophony of industry and regulatory bodies trying to secure the best future for their own sectors.
The Australian Trucking Association is releasing a string of policies it is hoping to be implemented by the next federal government, from an increase in renewable diesel production to the provision of up to $5000 in added financial support for truck driving apprentices.
The Australian Logistics Council is trying to bring both major parties to the table to commit to “real, structural reforms that provide certainty for industry and deliver tangible benefits for all Australians”.
Heavy Vehicle Industry Australia’s response to Labor’s budget has asked for more direct support for Australia’s truck and trailer manufacturers.
The list goes on.
Regardless of which party wins power and who is Prime Minister come the end of May 3; the federal election is a time for Australians to fight for what can improve their lives.
And that could well be more support for small business.
“Think about where you had your first job, or your son or daughter or niece or nephew, it’s very likely it came through a small business,” Achterstraat says.
“Small businesses are also more likely to sponsor community-based organisations and sporting clubs.
“We also know from economic research we need competition in the economy. We need firms entering and small businesses being created to drive that innovation and try to disrupt industries.
“Without competition, you end up in a corporatised economy that’s lacking competition.
“We’ve already seen in Australia that can lead to a misuse of market power.”
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