Australia’s economic growth slowed to just 0.2 per cent in the March 2025 quarter, prompting the Council of Small Business Organisations Australia (COSBOA) to call for urgent action to support small businesses amid rising costs and stalled investment.
The Australian Bureau of Statistics (ABS) described the quarter’s growth as “soft”, with GDP per capita falling 0.2 per cent. Public spending recorded its biggest detraction from growth since September 2017.
Luke Achterstraat, CEO of COSBOA, said the latest figures highlight a pressing need for policy reform.
“The data paints a clear picture of an economy under pressure; with business owners bearing the brunt of rising costs, policy uncertainty and falling consumer demand. It’s confirmation of what we’ve been hearing on the ground.
“Private sector investment is stalling. Productivity is stagnant. Small businesses are doing everything they can, but the settings are not helping them to grow.”
COSBOA is calling for targeted reforms through its Fair Go for Small Business campaign. The group wants the small business company tax rate cut from 25 per cent to 20 per cent, and the instant asset write-off made permanent.
It is also calling for smarter regulation, more flexible training pathways, supportive digital and privacy reforms, recognition of small health businesses in health system reform, and tangible support for the energy transition and net zero goals.
COSBOA-commissioned modelling suggests reducing the small business tax rate could boost the economy by up to $11.4 billion and create over 3,300 permanent jobs.
“The modelling confirms what we’ve heard from countless small businesses: tax relief boosts cashflow, reignites investment, and increases output, wages, jobs and growth,” said Achterstraat.
Australia’s 2.5 million small businesses employ over 5.1 million people and contribute $500 billion annually to the economy. Many operate on thin margins and face rising costs from energy, rent, insurance, and regulation.
“Employers are also facing higher workers compensation premiums, increased payroll tax, and another legislated rise in the superannuation guarantee from 1 July.
“These are businesses already operating on razor-thin margins. Many are struggling just to breakeven.”
COSBOA is urging the government to put productivity at the centre of its economic agenda.
“Less complexity. More certainty. A user-friendly approach that encourages small businesses to hire, grow and reward staff.
“A small business-led recovery is the only way to build a resilient, future-ready economy and ensure Australia remains globally competitive,” Achterstraat said.
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