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The NSW budget has provided some positive signals to the business sector, yet advancing tax reform is still needed to unlock the state’s economic potential, CPA Australia has said.
NSW budget delivers slight promise for grappling SMEs: CPA
26 June 2025
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9 minute read
The NSW budget, released on Tuesday (24 June), offered support to innovation and boosts to housing, yet lacks sufficient cost relief for struggling businesses.
CPA Australia welcomed the funding of $79.2 million for the NSW government’s innovation blueprint, which included support for the commercialisation of emerging technologies and innovative products and the diversification of manufacturing.
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Gavan Ord, CPA Australia’s business investment and international lead, said the blueprint would be set to bring support to NSW’s small businesses, as more investment would be attracted to the state.
“CPA Australia congratulates Treasurer Daniel Mookhey and the Minns Government for launching its innovation blueprint and providing solid funding in the budget. This helps set the state up for growth in exciting areas of the economy,” Ord said.
“SMEs will be pleased to see this support, especially given the sector lags most of their Asia-Pacific counterparts when it comes to the adoption of technologies and the commercialisation of their innovative ideas.”
Despite the investment boost the state and its businesses would likely see from this, the body noted that it would have liked to have seen all levels of government come together with these packages to ensure Australian businesses could maximise the commercial and economic impact of government support, reduce duplication and attract more R&D and innovation across the country.
“Better coordination between the federal and state governments on innovation policy should be a key area of discussion at federal treasurer Jim Chalmers’ upcoming productivity roundtable.”
Ord noted the 2025–26 budget deficit was projected to blow out to $3.4 billion, $1.2 billion above expectations and the projected surpluses of $1.1 billion in 2027–28 and 2028–29 were positive, but the government needed to keep spending under control in the current economic climate.
Housing supply was also set to improve through the NSW government becoming the guarantor of up to $1 billion of new housing projects, according to Ord.
“Small businesses facing cost pressures will feel there is little in this Budget for them, despite the six-month extension to the $150 energy bill relief. However, the government’s investment in skills development, innovation and infrastructure will help the state and many smaller businesses in the longer term.”
“The government is also forecasting $744 million in additional tax revenue over four years, with Revenue NSW winning more funding to continue its tax integrity program.”
BDO echoed similar sentiments towards the budget and its focus on stimulating the development of new homes, encouraging developers both local and foreign, as well as the land tax extension.
Abi Abdallah, BDO indirect tax national leader, said that by the government allocating additional investments to the operation of Revenue NSW’s compliance system, state tax revenue would be increased more broadly.
“We welcome the indefinite extension of land tax concession, a move that aligns with broader efforts to address housing affordability and supply,” he said.
“By removing the 2039 sunset clause, the government is sending a strong signal to institutional investors and developers that New South Wales is committed to supporting long-term rental housing. This policy shift could catalyse a new wave of build-to-rent developments, particularly in urban centres where demand for secure rental options is high. This policy supports a more diversified housing market, benefiting families, key workers, and younger Australians seeking stability in a challenging rental environment.”
“This will ensure taxpayers are correctly complying with the relevant laws and understand how certain laws apply to their business. Taxpayers need to be more vigilant to ensure they are up to date with any changes to their tax obligations, given that Revenue NSW is likely to be more proactive and step up reviewing activity.”
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