Budget Week: What's Coming for Business Owners

The federal budget drops next Monday. Based on what's leaked so far, business owners have good reason to pay attention.

Treasurer Jim Chalmers hands down the 2026-27 budget on May 12. Pre-budget reporting from multiple outlets points to a package aimed at business investment, cost relief, and tax simplification. Here's what's been flagged.

The instant asset write-off may finally become permanent

The $20,000 instant asset write-off for small businesses with turnover under $10 million has been extended year by year since 2023. Reports suggest Chalmers is now looking at making it permanent, potentially with an inflation-adjusted threshold.

Industry bodies CAFBA and COSBOA are pushing for the cap to be raised to $150,000, arguing the $20,000 limit doesn't reflect the real cost of the equipment businesses actually need.

If permanence lands, the planning changes. Businesses would stop timing purchases around EOFY panic and start buying when the business actually needs the asset.

Loss carry-back could return

The budget is expected to include a two-year loss carry-back scheme, similar to the one introduced during the pandemic. For incorporated businesses, it means offsetting current-year losses against previously taxed profits to generate a rebate from the ATO.

During COVID, the scheme covered businesses with turnover up to $5 billion. Eligibility thresholds this time are still unclear.

Fuel and energy relief

The temporary fuel excise cut, worth 26.3 cents per litre off petrol and diesel, expires on June 30. Reports indicate the government is considering an extension into the new financial year. A $150 energy rebate for small businesses, paid in two $75 quarterly instalments from July, is also expected.

Income tax changes from July 1

The tax rate on income between $18,201 and $45,000 drops from 16% to 15%. That's already legislated. A one-off earned income offset of $200 to $300 for wage and salary earners is also being discussed. For sole traders, that flows straight back to the business.

What to do this week

The budget hasn't landed, so this isn't the week to make decisions based on speculation. It is the week to get ready.

If you're planning an equipment or vehicle purchase before June 30, the current $20,000 write-off is already law. That doesn't depend on Monday. The question is whether permanence removes the annual EOFY scramble and lets you time purchases around business needs instead.

If loss carry-back returns and you're a company (Pty Ltd), talk to your accountant about whether your recent tax position qualifies you for a rebate. If you're a sole trader or partnership, the scheme won't apply directly, but it's worth revisiting whether your business structure is still the right one.

If the fuel excise cut isn't extended, transport costs jump 26 cents a litre from July 1. If you run vehicles or a fleet, work out what that number means for your margins now, before the budget answers the question for you.

This article is general information only and is not financial advice.