In this article
Treasurer Jim Chalmers has handed down the 2026–27 federal budget, framing it as a Budget of “resilience and reform”.
With the conflict in the Middle East driving a global oil shock and cost-of-living pressures still front of mind, the Government has sought to juggle immediate relief alongside significant economic reform.
The five pillars of this budget are: responding to the global oil shock, taking pressure off Australians, boosting productivity, delivering tax reform for workers and businesses, and making responsible savings.
The Government is backing all of this with $63.8 billion in savings and reprioritisations, so it’s a budget that’s as much about fiscal discipline as it is about new spending.
Key takeaways from the budget
Budget deficit for next financial year is estimated to be down to $31.5 billion; projected to return to balance in 2034–35
Instant Asset Write-Off made permanent at $20,000 for businesses with turnover up to $10 million
New $1,000 Instant Tax Deduction (no receipts required) for individuals and sole traders
New $250 Working Australians Tax Offset available to sole traders
Two-year loss carry back for companies with turnover up to $1 billion, from 1 July 2026
Loss refundability for small start-ups (turnover under $10m in their first two years, from 1 July 2028
CGT discount replaced by cost base indexation with a 30% minimum tax from 1 July 2027 (existing SME CGT concessions maintained)
Negative gearing limited to new builds from 1 July 2027
New 30% minimum tax on discretionary trust income, with three-year rollover relief for restructuring
32 cents per litre fuel excise cut for three months from 1 April 2026
$14.8 billion Strengthening Australia’s Fuel Resilience package, including $7.5b Fuel and Fertiliser Security Facility
Reserving 20 per cent of gas exports for Australians
$1 billion in interest-free loans for manufacturing and logistics businesses impacted by the fuel crisis
R&D offset increased by 25–50% for experimental core R&D; turnover threshold for the refundable offset lifted to $50 million
A landmark $25 billion additional investment for public hospitals
$10.2 billion annual reduction in regulatory burden; $13 billion long-run GDP boost from productivity reforms
Releasing $1.1 billion to support domestic production of low-emissions fuels
A record additional $53 billion investment in Defence capabilities
$8.6 billion for nationally significant road and rail projects
What’s in it for SMEs
This budget delivers $3.5 billion in new measures for small businesses and start-ups.
The headline wins include a permanent Instant Asset Write-Off, a new $1,000 instant tax deduction, and a $250 offset for working Australians including sole traders.
At the same time, the Government is making significant structural changes to CGT, negative gearing, and trust taxation that will reshape planning decisions for many SME owners.
We recommend discussing the reforms with your trusted advisor(s) as soon as possible to determine how, specifically, the changes will affect your business and what structural or other variations you will need to implement moving forward.
For the full breakdown of what each measure means, see our dedicated SME budget article.
What the Budget means for mid-sized businesses
The new budget focuses on reducing red tape, working to stop ‘compliance friction’, and delivering $10.2 billion in annual regulatory savings.
Reforms are coming to approval processes, particularly benefiting the construction sector by shortening the time between investment and ‘shovels in the ground’.
In the 2026-2027 Budget, there’s also specific funding allocated to promote the uptake of AI, helping mid-market firms automate reporting and administrative tasks that currently require manual oversight. Plus, $400 million a year will be invested to lift research and development in Australia.
For mid-to-large operators in construction, wholesale, and manufacturing, the Government’s Budget strategy involves a pivot from globalisation toward ‘Sovereign Capability’ and offers immediate logistical relief while aggressively cutting regulatory friction.
For the full breakdown of what each measure means, see our dedicated Mid-Sized Business Budget article.
MYOB’s verdict
For small and medium-sized businesses, this budget will introduce complexity in some areas and ease it in others.
The proposed changes to the CGT discount and discretionary trusts, in particular, could increase the tax bill for many, and force them to reconsider how their businesses are structured.
Of course, much of the detail is yet to be announced and worked through. This will become clearer when the relevant bills are presented to parliament in due course, and we'll continue to update you as details become available.
There are certainly some positives to be happy about, too.
“The decision to make the instant asset write-off permanent is a win for SMEs,” said MYOB CEO Paul Robson. “Our latest MYOB Business Monitor revealed tax relief was among the top priorities for small business owners, and this measure responds directly to that call.
“This is a practical reform that gives small and medium businesses greater certainty to invest in the tools and equipment they need to improve productivity, modernise operations and remain competitive.
MYOB also welcomes the announcement of the two-year loss carry-back measure.
“It will provide valuable support for businesses facing fluctuating conditions,” said Paul Robson. “Allowing businesses to offset current losses against previous profits can help manage uncertainty, maintain investment and retain staff during more challenging periods.”
As always, when it comes to tax reforms and other government changes, be sure to talk with your advisors about what will work best for your firm’s situation.
And keep a close eye on specific dates of change so you know when decisions need to be made for your business, rather than leaving updates (especially structural ones) to the last minute. The more planning you can do earlier, the better.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
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