The 2026/27 Federal Budget arrived with a reasonable list of measures aimed at business. Some of them are worth acting on, while others, in our opinion, look better in a press release than they do in practice.
Here is our honest assessment of what matters for business owners heading into the new financial year.
“Every business owner I’ve spoken to this week is shaking their head a little. There are some useful measures in here, but the underlying cost and compliance pressures on small businesses have not been addressed. If anything, things are getting harder for them.” – Shane Borg, Director, Stones Sharp
What’s Actually Changing in Business Tax
The $20,000 Instant Asset Write-Off: Useful, But Only If You Have the Cash
The instant asset write-off threshold has been confirmed at $20,000 for 2026/27, allowing eligible small businesses to immediately deduct the full cost of assets under that threshold rather than depreciating them over several years.
On paper, this is a reasonable concession. In practice, its value is more limited than the headline suggests.
The write-off only helps you if you can afford the purchase in the first place. A $20,000 deduction is not worth anything to a business that does not have $20,000 to spend. The businesses that would benefit most from new equipment; trades, construction, small operators already under cash flow pressure, are largely the same businesses that do not have that capital sitting available. Many are financing equipment purchases already, which changes the tax treatment entirely.
“The building industry is really struggling at the moment. The idea that a small builder or tradie is going to go out and spend $20,000 on a new piece of equipment because of a tax write-off assumes they have that cash sitting there. Most of them are working hard just to cover wages and keep the household going. It is a nice-sounding measure that does not reach the floor where the pressure actually is.” – Shane Borg
If you do have the cash flow and there is equipment your business needs, purchasing before 30 June is worth considering. But buying something you do not need to chase a tax deduction is rarely good business sense.
Loss Carry-Back Reinstated
Loss carry-back has been made permanent for companies with turnover up to $1 billion. This allows a business that makes a loss in the current year to offset that loss against profits from the previous two years, generating a tax refund rather than simply carrying the loss forward.
In the eyes of the Stones Sharp team, this is a meaningful measure, particularly for businesses that have had a difficult year following a period of profitability. It is the same mechanism that helped many businesses through the COVID period, and making it permanent provides a degree of certainty for planning purposes.
“If a client had a solid year in 2024/25 and paid tax on that, and then had a hard year in 2025/26, loss carry-back means we can go back and apply that loss against the prior year’s profit and get a refund. That cash comes back now, when the business needs it, rather than sitting as a carried-forward loss waiting for better times.” – Shane Borg
The honest caveat: this measure helps a specific group of businesses. It requires that you were profitable in prior years, that you are now trading at a loss, and that you are operating through a company structure. It will not apply to everyone, but for those it does apply to, it is worth knowing about and raising with your accountant if you have had a tough year.
Discretionary Trust Minimum Tax Changes
A minimum 30% tax rate on income distributed through discretionary trusts has been announced, with an implementation date of 2028 and a three-year transition period for restructuring.
The purpose of a discretionary trust, from a tax perspective, has historically been the ability to distribute income to beneficiaries in lower tax brackets, reducing the overall family or business tax burden. A 30% minimum tax rate will significantly reduce that advantage for many business owners, including Stones Sharp clients.
If you operate your business through a discretionary trust, this is not something that requires immediate action. Our advice is not to rush into restructuring decisions before the legislation is confirmed and before you understand the full implications for your specific situation.
Restructuring a trust, particularly one that holds property, triggers its own tax consequences including stamp duty and a potential capital gains event, where property-owners will also be seeing changes made. Moving too quickly now could cost more than the problem you are trying to solve.
What we recommend doing now is modelling your position. Using three years of actual business figures, a comparison of what your tax position looks like under your current trust structure versus a company structure or personal trading gives you a factual basis for the decision when the time comes.
“Anyone running a business through a trust needs to look at the numbers. Not panic, not restructure tomorrow, but actually understand what this means for them specifically. The implications vary enormously depending on the business, the beneficiaries, and what assets sit in the trust.” – Shane Borg
The bottom line from us on this is do not rush it, but do not ignore it.
The Compliance Burden Is Getting Heavier, Not Lighter
There is one measure that received very little budget night coverage, but that has our team frustrated on behalf of our clients. From 1 July 2026, accountants, solicitors, real estate agents, financial planners, and several other professional categories must register with AUSTRAC, the Australian financial intelligence agency, to comply with expanded anti-money laundering (AML) laws. This means annual reporting obligations, assessments every three years, and fees for the privilege of doing what we consider is effectively a government compliance function.
The intent is reasonable, but the execution places a significant administrative and financial burden on professional services firms and, by extension, on the clients who pay for their time.
“We are now being asked to take on a compliance role that belongs to the government. We will do it, because we have to. But let us be clear: this is not reducing the compliance burden on small businesses. It is increasing it, and someone has to absorb that cost.” – Shane Borg
Payday Super: This One Affects Every Employer
Payday super was legislated in 2025, and comes into effect on 1 July 2026. This means it is happening in weeks, and based on the conversations we are having with new clients, a number of employers are not ready.
With the new changes, super contributions must now be paid at the same time as wages, every single payday; the quarterly payment cycle is gone. Contributions must reach the employee’s super fund within seven business days of each payday. Penalties for delayed payments start at 25% of the unpaid amount and increase for repeat issues.
Our advice to employers right now is:
The ATO’s Small Business Superannuation Clearing House permanently closes on 30 June 2026. If your business currently uses this to pay super, you need an alternative in place before then. Many payroll platforms and super funds offer integrated clearing house services.
What Business Owners Should Do Before 30 June
With the end of financial year weeks away, here is where business owners should be focused:
- Review your cash flow and tax position. Understand what you owe, what you are owed, and what your obligations look like heading into the new year. If you have made a loss this year against profitable prior years, talk to us about loss carry-back eligibility.
- Consider the $20,000 write-off only if the purchase makes sense. If there is equipment your business needs and you have the cash flow to support it, the timing makes sense. Do not manufacture a purchase for the sake of a deduction.
- Reconcile your super obligations. Make sure all quarterly super for the period to 30 June is paid and received by funds by 28 July. From 1 July, the rules change entirely.
- Check your payroll system is ready for payday super. If you are not certain, call your payroll provider today.
- If you operate through a trust, start the conversation about modelling your position under the proposed new rules. Not to restructure now, but to understand your options before the pressure is on.
- Make sure trust distributions and company resolutions are documented before 30 June. This is a standard year-end requirement but one that catches businesses out every year.
How Stones Sharp Can Help
“The questions business owners should be asking right now are not just about the budget. They are about whether their structure, their payroll, and their records are in order heading into a year where the rules are changing in several directions at once. That is exactly the kind of conversation we are here for.” – Shane Borg
Every business is different, and the measures in this budget will affect owners differently depending on their structure, industry, and financial position. If you would like to talk through what 2026/27 looks like for your business, get in touch with the team at Stones Sharp.
