A new study has brought to light the number one frustration among Australia’s small-business owners: the country’s taxing system. According to the 2024 Big Small Business Survey, a large majority of small-business owners are feeling the pinch of a tax system that seems to be more of a hindrance than a help, especially during the early, fragile years of their businesses.
Jenn Donovan, a marketing strategist and the lead author of the report, noted that the tax system in Australia can feel like an added burden to business owners who are already juggling rent, employee wages, equipment costs, insurance, and marketing—if there’s anything left in the budget. The weight of a hefty tax bill can often feel like the breaking point, especially for small-business owners who lack the luxury of sophisticated tax planning or large-scale deductions available to bigger corporations.
“When businesses are just finding their feet—usually juggling rent, staff costs, equipment, insurance, and marketing (if there’s any budget left)—a big tax bill can feel like the final straw,” Donovan explained. “Many are just hoping there’s enough left over to pay themselves a wage.”
The Challenges Faced by New Businesses
The study highlights how this tax burden is particularly harsh on new businesses that are trying to reinvest their earnings and grow. One respondent in the survey summed up the frustration, saying, “The tax burden can be a huge handbrake for a young business and significantly impact growth potential and viability in the first five years.”
For these small-business owners, it’s not just about surviving the day-to-day costs; it’s about having enough resources to expand and thrive in an increasingly competitive market. Yet, these challenges don’t just end with taxes. In fact, the survey paints a broader picture of the struggles Australian small businesses face.
Rising Costs and the Struggle for Profitability
The report shows that 44.89% of small-business owners listed rising costs as their primary concern in 2024, a significant increase from just 19% in 2023. With inflation continuing to drive up expenses, many businesses are finding it harder than ever to keep their heads above water. More troubling is the fact that less than 16% of small-business owners have a clear strategy for raising prices to offset these mounting costs.
As a result, many small-business owners are left stuck between a rock and a hard place—having to choose between absorbing the rising costs or passing them onto their customers, which could hurt their competitiveness.
The Growing Importance of Technology
Another notable trend highlighted in the report is the rise of AI adoption among small-business owners. With 63.62% of respondents viewing AI in a positive light, it’s clear that many see the potential for digital tools to help streamline operations and boost growth. However, the reality is that small-business owners are often too focused on survival to invest time and money in these digital transformations.
“Small-business owners say they’re too busy keeping the lights on to invest in big digital transformation plans,” the report observed. The result is that many businesses are falling behind when it comes to leveraging the latest technology to their advantage.
A Call for Fair Tax Reforms
Despite these challenges, the survey found that small-business owners are not asking for handouts. What they want is fairness, especially in how they are treated under the tax system. “If any political party wants to win the hearts (and votes) of Australia’s SME sector, a thoughtful, targeted tax reform policy for small businesses could be the golden ticket,” Donovan wrote. “Not flashy. Not gimmicky. Just fair.”
The call for fair tax reform is louder than ever. With small-business owners bearing the brunt of an outdated and burdensome tax system, many are urging policymakers to reassess how they can better support the backbone of Australia’s economy. Only then will small businesses have the breathing room they need to not just survive—but thrive.
