COSBOA calls on Albanese Government to reduce rate from 25% to 20%
Australia’s peak small business body has intensified its campaign for a corporate tax cut, arguing that current tax settings are stifling growth, investment, and local job creation. The Council of Small Business Organisations of Australia (COSBOA), representing 2.6 million small enterprises nationwide, is urging Prime Minister Anthony Albanese to commit to reducing the company tax rate for small businesses from 25 per cent to 20 per cent before the next election.
“Simpler, fairer system needed”
Matthew Addison, Chair of COSBOA, said that the tax burden on small operators has become unsustainable, with excessive red tape and compliance costs draining productivity.
“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,” Addison said. “We need a system that is as simple as possible, not another layer of red tape.”
He added that a lower tax rate would allow small business owners to reinvest profits into their communities rather than see funds disappear through bureaucracy.
Global comparison highlights Australia’s disadvantage
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 at 32.9 per cent. In comparison, companies in New Zealand pay 27 per cent, Canada 23.7 per cent, the United States 22.7 per cent, and the United Kingdom 22.6 per cent. COSBOA argues this gap makes Australia less attractive for investment and innovation.
Small business voices: “Let us reinvest locally”
For small operators, the issue is deeply personal.
Scott Etherington, who runs the Gulgong Post Office in rural New South Wales, said a tax cut would allow him to “spend more money in my community.”
“Any extra red tape for a small business is incredibly burdensome,” he said. “If you let me keep more of my income here, I get to spend more of it here—not overseas, not somewhere else.”
Similarly, Luke van der Rijt, owner of Southcity Pharmacy in Wagga Wagga, described the current combination of company tax, payroll tax, and GST as “a problem” for many small businesses.
“Managing all those together can be quite challenging,” he said. “The bills can add up quickly, and any reduction would encourage reinvestment in staff or improvements.”
Support from big business
The Business Council of Australia (BCA) has also expressed support for a more competitive tax framework. Chief Executive Bran Black said Australia’s high tax rate discourages international investment and limits economic potential.
“We have the fifth-highest company tax rate in the OECD,” Black noted. “Simply put, our tax settings drive investment opportunities away from our shores. A more globally competitive system would help fund the housing crisis solutions and energy transition we desperately need.”
Broader “Back Australia” campaign
The push for tax reform comes under the broader “Back Australia” initiative, a coalition effort backed by major companies such as Bunnings, Coles, Qantas, and Westpac. The campaign seeks to strengthen domestic manufacturing, support Australian-made products, and revive community-based economic growth.
COSBOA insists that a fairer tax environment is critical to ensuring small business survival amid inflation, supply chain disruptions, and post-pandemic recovery pressures.
