For small business owners in Western Australia, the 2026-27 Federal Budget brings a mix of tax changes, investment incentives and regulatory reforms.
The measures announced may affect businesses in different ways depending on their circumstances, so business owners may wish to seek professional advice to better understand the implications.
Here is an overview of the key announcements that are likely to have an impact on small businesses in Western Australia.
Please note: these announcements will need to be passed as law through the Federal Parliament.
Tax related measures
Instant asset write-off
The Federal Government’s $20,000 instant asset write-off will become a permanent tax scheme accessible to small business owners.
The instant-asset write off allows eligible small business owners to claim immediate deductions for new or second-hand plant and equipment asset purchases such as vehicles, tools and office equipment. The assets must first be used, or installed for use, in the income year you’re claiming for.
It is designed to support small businesses to invest and keep compliance costs low.
Taxation of trust funds
A minimum tax of 30 per cent on discretionary trusts will apply from 1 July 2028 (with some exceptions). No credits will be available to corporate beneficiaries for tax paid by trustees.
A three year ‘rollover relief’ period will apply from 1 July 2027 to help small business owners looking to restructure.
Reintroduction of Loss Carry Back
This tax scheme would allow incorporated entities to use a loss in the current year tax to receive refunds on tax paid in the previous two tax years. The Federal Government estimates that this measure will help around 85,000 businesses, with a large amount of these being small businesses.
Please note: this scheme is not available to sole traders or businesses structured as trusts.
Refundable tax losses for start ups
From the 2028-29 tax year, start ups will be able to receive refunds for tax losses. The refunds will be capped by the amount of fringe benefits tax (FBT) and withholding tax paid on employee wages.
The objective of this scheme is to provide early stage cash flow support for new businesses that are hiring staff and is expected to support 25,000 new businesses.
PAYG instalment reforms
From 1 July 2027, businesses can opt in to monthly pay as you go (PAYG) instalment payments instead of the standard quarterly cycle.
Monthly amounts will be calculated automatically using ATO approved formulas embedded in accounting software, adjusting in real time to reflect actual income. Businesses using these ATO approved calculators will be protected from penalty interest if instalment variations turn out to be unintentionally incorrect.
This measure is designed to help businesses with seasonal or variable income, to spread the cash flow impact evenly across the year.
Support for the small business sector
The Federal Government’s budget commitments aimed towards its productivity agenda could potentially have flow on effects for small businesses. These include:
- Financial sector red tape will be reduced through reforms expected to save businesses around $780 million annually in compliance costs.
- Company reporting requirements will be simplified, with regulators set to streamline data collection processes.
- The removal of close to 500 additional import tariffs, reducing costs and saving businesses around $157 million per year.
- Working with State Governments to simplify payroll tax administration and improve national occupational licensing, making it easier for workers to move between states.
- New ‘tell-us-once’ digital government services and expanded Digital ID systems to make it easier and safer for businesses and individuals to interact with government online.
- Making all mandatory Australian Standards free, including across construction, work health and safety, and product safety, saving businesses up to $1,600 in access fees.
- Making it quicker to recognise the skills of migrant trades workers and to accelerate occupational licensing, saving up to six months bringing new staff onboard.
More information
Visit the Budget website for more information on these and other commitments announced as part of the Federal Budget.
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