CGT thresholds no longer reflect the realities of small business: COSBOA

“Small business owners are telling us they have spent years reinvesting profits back into their businesses, staff and equipment instead of paying themselves larger incomes, because they believed building long-term value through their business would eventually pay off,” said COSBOA chief executive Skye Cappuccio.

“Whilst there are established CGT exemptions for eligible small businesses, the thresholds no longer reflect the realities or operating scale of many modern small businesses,” Cappuccio added.

Entourage Finance managing director Damien Roylance said that small business owners have been left wondering if the risk and sacrifice required to grow a business in Australia is still worth it.

“The concern with the proposed CGT changes is that they alter the equation for people who are taking those risks … A lot of small business owners are now questioning whether having a go in Australia is worth it anymore, particularly when the current thresholds no longer reflect modern business realities,” Roylance said.

Victorian grain and sheep farmer Ryan Milgate added that the proposed CGT changes are creating fresh uncertainty for succession planning farming families working through intergenerational handovers.

“Land values and the scale of operating a modern farm have changed significantly, even though farming income remains seasonal, unpredictable and heavily impacted by weather and commodity prices … People see land value and assume farming families are sitting on huge wealth, but farming doesn’t work like that. You can be land-rich and cash-poor at the same time,” Milgate said.

“The concern is these changes could force families to delay succession, take on more debt or even sell parts of the farm just to manage the tax impact,” he added.

Cappuccio emphasised the critical role that small businesses have for Australia’s productivity and economic resilience, stressing that policy settings should encourage entrepreneurship.

“Small business owners need confidence that the years of risk, sacrifice and reinvestment required to build a business will still be recognised and supported.”