The Council of Small Business Organisations Australia (COSBOA) is calling for a proposed tax reform to be rewritten to include all small businesses, not just those structured as companies. Skye Cappuccio, COSBOA CEO, says the current draft of the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 leaves trusts and sole traders exposed.
The bill aims to help businesses manage cash flow during tough trading periods, but COSBOA argues it only benefits company-structured businesses. Cappuccio says the benefits should be available to all small businesses, regardless of their legal structure.
COSBOA supports the general aim of the reform, but has concerns about the bill’s current form. The group says many small operators assume “small business” and “company” are the same thing, but they’re not. Family businesses often use trust structures, while others operate as sole traders or partnerships.
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These differences in structure matter, as they affect how businesses are treated under the current draft. Cappuccio notes that many Australian small businesses do not operate as companies, and therefore do not receive the same treatment. They are treated differently due to their structure.
COSBOA‘s submission to the Senate Economics Committee spells out the gaps in the current draft. Losses inside a trust stay trapped, with no way to carry them back. Sole traders and partners have no carry-back facility at all.
Even companies that pay out profits to support the people running the business may end up with a limited benefit, despite technically qualifying. COSBOA is proposing a specific mechanism to address these gaps, recommending that genuine business losses should be able to be carried back against tax the business previously paid.
This would be done through existing tax reporting processes already in place, whether the business operates as a trust, partnership, or sole trader. COSBOA is not just flagging the problem, but also proposing a solution.
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Cappuccio says the submission provides a practical pathway that builds on existing tax administration processes. If the changes can’t be included in the current bill, COSBOA is asking for a government commitment to consult on extending loss carry-back to non-company small business structures.
COSBOA wants this to be treated as a priority, rather than something to revisit later. They look forward to working with the government, Treasury, and the Australian Taxation Office to ensure the reform supports the broadest possible cross-section of Australia’s small business community.
The committee will consider COSBOA‘s submission as part of its review of the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026. The committee’s response to COSBOA‘s concerns will be closely watched by the small business community.