Thirty businesses a day go broke? Is that the daily death toll under Labor? And now Albo wants to slug business owners with even higher taxes?
Despite the fallout from the Budget, which has generally been negative, especially for business, the most recent NAB business survey and the Westpac consumer sentiment survey showed confidence had surprisingly risen. But it wasn’t all good news with the Daily Telegraph reporting that the number of businesses going broke under the Albanese Government was alarming.
This is how the newspaper’s Jessica Wang explained it:
“About 30 businesses have gone bust per day since Labor won government, with the construction, hospitality and retail industries the hardest hit.
“The latest insolvency figures from corporate and financial services regulator ASIC show 14,011 businesses went under in the 2025-26 financial year.”
The figures also show that 47,728 businesses have entered insolvency since May 2022, when Anthony Albanese won the top job. Before that, under the Liberal PM, Scott Morrison, despite the pressures of Covid, 8,105 businesses went bust in 2018-19, or 22 per day.
The numbers show 10,166 construction businesses have gone belly up since 2022, making it the hardest hit sector. This was followed by accommodation and hospitality, where 6,356 businesses bit the dust.
Today, the Coalition’s leader, Angus Taylor, is addressing a small business and tax forum in Sydney’s Berowra, and he’s expected to use these figures to underline his plan to back small businesses in the run up to the next election.
Significantly, Wang points out that “the figures come as small business groups prepare to oppose looming changes to discretionary trusts, with the Council of Small Business Organisations Australia warning 210,000 small family businesses could face a higher tax burden once the changes come into effect from July 2028.”
That’s when the 30% minimum tax on trust distributions will apply. But the Government dismisses these protests saying it will only affect 8% of businesses. This very defence tells us how out of touch Labor is with business owners.
Let me show Albo and his team what 8% means.
There are reportedly 2.73 million small and medium enterprises (SMEs) with about 97% of these regarded as small businesses, that is employing 0-19 workers. That’s about 2.6 million and 8% of these apparently use trusts to run their operations, undoubtedly on their accountant’s advice. When you take 8% of 2.6 million you wind up approximately with 210,000 businesses.
According to official figures, the average taxpayer has an average tax rate of 24.9% but if someone owns a business in a trust, when the profits are distributed to the owners of the business, they will pay a minimum tax of 30%.
What this says is that the Government doesn’t appreciate the extra effort a small business owner makes to create jobs, train workers, cope with the red tape regulations, pay professionals to do their tax because of the complexity of the Tax Act, make sure employees aren’t over-stressed, not sexually or mentally harassed, while making it possible for employees who, on a lower average tax rate, to work from home.
As a sector, small business makes about 33% of the goods and services in the country’s GDP of around $2.12 trillion, so that means around $707 billion is coming from the sector. And 8% of that is around $56 billion. Of course, this isn’t profit for these businesses but round figures on what their revenue might be, out of which they pay wages, taxes, cost of services and supplies, which all create jobs and profits for other businesses and their employees.
These are really important people and big contributors to the wealth and material welfare of millions of Australians. They employ 5.1 million Aussies. And 8% of this number is 408,000 employees, whose employers are going to be under new pressure, thanks to the 2026/27 Budget.
Call me an economist or small business owner but it is time that Canberra started to value these people who have the guts to start and run businesses, employ people and who help others fulfill their dreams to own homes and have happy families and lives.
Small business owners are heroes, and it is time governments of all persuasions started to really value them, rather than making promises to cut red tape and praising the sector as “the backbone of the economy”.
That backbone is carrying more government-created weight than is necessary and it is hurting the productivity or the pace of improvement of these small businesses.
Angus Taylor is expected to tell the Berowra forum today the following:
“A Coalition government I lead will axe Labor’s toxic taxes on small businesses, bring down power bills by scrapping net zero, establish a permanent $50,000 instant asset write-off for businesses with a turnover under $10m, and expand access to CGT concessions to thousands of small businesses.”
That’s all well and good but Angus needs to become a champion of small business and the people they employ, and that could be a good start to raise his profile and his very low popularity.
By the way, while the NAB business confidence did rise 9 points in June it’s still negative -5, which is a long way off the historical average of +6. And by the way, that rise was linked to an expectation that the Middle East conflict was easing and oil prices were falling.
Consumers were also less pessimistic because of the improving Iran war story, with the confidence index up 4.1% to 83.9, but as Westpac pointed out: “Despite the gain, sentiment remains deeply pessimistic. At 83.9, the latest Index read is still in the bottom 10% of results over the 50-year history of the survey.”
This isn’t a good economic report card, Albo.
Peter, there is too much government in this country. The public service payroll has ballooned under Labor. The public service needs to be radically trimmed and Labor are definitely not the party to do that. We are headed for economic disaster under this government with its mass immigration and net zero policies. I encourage all Australians to put any money you have beyond the reach of this government, because they are coming for it.
Labor governments want more people to be dependent on the State rather than private enterprise, so they have more sway over them
Treasury’s consultation paper, “Minimum Tax on Discretionary Trusts” released on 8th July confirms that corporate beneficiaries of trusts will intentionally face double taxation.
The National Tax & Accountants Association calculate that the resultant ultimate tax rate will be 69.71%.
Albo & JC tell us that these tax changes were to bring the tax trusts pay into line with that which “workers” pay.
But the maximum marginal rate of income tax payable by Albo’s “workers” is 45%!
Obviously maths isn’t one of the very few strong points they have, (a bit worrying when one of them is the Treasurer.)
Spin, however, is undoubtedly their strongest.
Yes totally agree with Peter’s paper and Peter’s replies.
There is a hell of a lot of stress out there from small mums’ and dads, SMEs’ and even with our farmers which help feed us.
And one of the largest issues affecting business bottom lines is government red tape, taxes and energy costs which feeds into everything.