When people hear discussions about discretionary trusts, proprietary limited companies, shareholder loans, and “bucket companies”, it is easy to assume these corporate structures exist simply to reduce tax.

But that assumption misses the operational reality of running a small business in Australia.

The reality is that choosing the right business structure is primarily a matter of risk management and long-term asset protection.  The businesses navigating these complex legal frameworks are the very backbone of suburban and regional Australia, employing local workers, training apprentices, and keeping our communities moving.

They:

• sponsor the local footy club.
• train apprentices.
• support local suppliers.
• build homes, repair vehicles, service air conditioners, run medical clinics and keep local economies moving.
• are the fabric of suburban and regional Australia.

The:

• electrician with 12 employees.
• mechanic with three apprentices.
• civil contractor who spent 20 years reinvesting profits and now employs 40 people.
• family business that has survived recessions, the pandemic and changing markets.

When public debate focuses solely on changing how business owners are taxed, it ignores the ripple effect on investing, expanding, and hiring.  More often than not, a business structure is established not as a tax loophole, but as a vital shield against commercial risk.

The decisions business owners make about investing, expanding, employing staff and eventually selling their businesses can have consequences that flow through entire communities.

What many people don’t realise is that the structures often being criticised today were not necessarily created for tax reasons.

More often than not, they were created to manage risk.

The following real-world examples and observations help explain why.

Part 1: How Discretionary Trusts and Companies Protect Personal Assets

When someone comes to me asking about the best structure for a new business, my first question is not about tax.

It’s about risk.

Years ago, I spoke with a paramedic who operated a business providing first aid services at school sporting events and rugby carnivals.  He was operating as a sole trader.

I asked him a simple question.

What would happen if someone died at an event where you were providing medical services and the family sued you?

This wasn’t a hypothetical question.  A school student had died at one of my children’s sporting events not long before this conversation.

If the damages exceeded your insurance cover, or the insurer refused the claim, the liability could fall directly on you personally.

This paramedic owned a home with his partner.

A successful claim could have forced the sale of that home.

Imagine having to explain to your partner that the family home was lost because of a business activity they had no involvement in.

That is why structure matters.

A company creates a fence between the business and the owner’s personal assets.

But sometimes the gate in that fence can still be opened.

A trust owning the company adds a lock to the gate by separating ownership from the trading activities of the business.

These structures are often established because of risk management, not tax planning.

Part 2: Director Loans vs Share Capital: Managing Small Business Risk

The same principle applies when founders put money into their businesses.

Most companies start with only a small amount of share capital.

That is not because someone is trying to create a tax advantage.

It is because startups and small businesses are risky.

Once the company is established, founders generally have two ways to provide additional funding:

• Invest more share capital.
• Lend money to the business under a formal loan agreement.

Many founders choose the second option.

Again, the reason is risk.

I have seen businesses where investors promised future funding rounds and then failed to deliver.

The business entered administration.

The founder lost control of their company and watched years of hard work, intellectual property and business assets sold for cents in the dollar (sometimes to competitors).

A secured founder loan can change that outcome.

A founder who is a secured creditor often has significantly more influence over what happens during an administration process and may be able to recover key assets or restart the business.

There is also a practical benefit.

Money lent to a company can generally be repaid more easily than money invested as share capital, which often requires formal capital reduction processes and additional compliance.

Part 3: What is a Bucket Company?  Using Corporate Beneficiaries for Risk Management

The same principle applies when a successful business starts generating profits.

I have a client who has spent 15 years building their business.

Business conditions today are very different to when they started. AI in particular may result in significantly diminished returns in the years ahead. Combined with some fatigue from operating in the same industry for so long, they are now exploring other opportunities.

To pursue those opportunities, they need capital that their existing business has built up over many years and already paid company tax on.

Many people assume the obvious answer is to simply leave the profits in the trading company until they are needed.  But that creates a problem.

The trading company is where the risk lives.

• It deals with customers.
• It signs contracts.
• It employs staff.
• It can be sued.
• It can face disputes.
• It can fail.

If significant cash reserves are left sitting inside that trading company, those funds are exposed to the same risks.

So many business owners choose to move profits that have been set aside for future investment into a separate company that does not trade.

To some people, this type of structure is known as a “bucket company”.  The name sounds like it exists purely for tax purposes.

But in practice, many business owners use these companies for the same reason they use other business structures: risk management.

Think of it as taking cash out of the shop safe and moving it into a bank vault. 

The money is still there.

It still belongs to the business group.

But it is no longer sitting in the highest-risk environment.

Importantly, this money is not tax-free.  The profits have already been taxed, or will be taxed, at company tax rates, which for many small and medium businesses is currently 25%.

The purpose is not simply to accumulate wealth.

The purpose is often to protect capital that has already been earmarked for the next opportunity, whether that is a new location, a new product line, an acquisition or an entirely new business venture.

Many business owners are not trying to avoid tax.  They are trying to protect the capital they have spent years building so they can invest it into future growth opportunities.

Risk came first.  Tax was secondary.

Part 4: Small Business Succession Planning and Retirement in Australia

There is one final issue that rarely gets discussed.  At some point every business owner exits.

Some sell.  Some pass the business to family members.  Some simply close the doors.

But regardless of the path, the business eventually changes hands.

For many owners, that exit is not a windfall.

It is their retirement plan.

Unlike employees who accumulate superannuation throughout their working lives, many business owners spend decades reinvesting profits back into their businesses.

They:

• take risks.
• build teams.
• invest in equipment.
• expand premises.
• create systems, intellectual property and customer relationships.

Over time, the business itself becomes the asset.

The challenge is that a business is only worth what somebody is prepared to pay for it.

And buying a business is not easy.

The buyer is often taking on significant debt, personal risk and years of responsibility.

They are committing capital that could have been invested elsewhere.

They are backing themselves to grow something they did not build.

That requires confidence.

It requires access to capital.

And it requires a belief that the rewards are worth the risk.

That point is important.

Most employees know exactly what they will be paid when they turn up to work tomorrow.

Most business owners do not.

Some businesses succeed.  Many do not.

Some owners spend years building a business only to see it fail.

Others spend decades reinvesting profits back into the business rather than taking those profits home.

The possibility of eventually building a valuable business is one of the rewards for accepting that uncertainty.

Without the prospect of reward, fewer people will be willing to accept the risk in the first place.

And if fewer people are willing to take that risk, fewer businesses get started, fewer businesses get expanded and fewer businesses are available for the next generation to buy.

This becomes particularly relevant as a large number of business owners approach retirement over the coming decade.

Many successful businesses will come onto the market looking for a new owner.

The question is not whether those businesses have value.

The question is whether enough people will be willing to take the risk of buying them. 

Because if enough buyers do not emerge, many of these businesses will not simply continue as they are.

Some will close.

Some will shrink.

Some will be absorbed by larger competitors.

Over time, industries can become increasingly concentrated in the hands of fewer and larger businesses.

That has consequences far beyond the business owner.

Less competition can mean fewer choices for consumers.

It can reduce innovation.

It can make it harder for new entrants to establish themselves.

And it can reduce the opportunities available to employees.

Small and medium businesses are often where future managers, tradespeople and business owners learn their craft.

They are where:

• apprentices receive their first opportunity.
• new ideas are tested.
• local jobs are created.

The next generation of business owners is not simply buying a business.

They are preserving:

• jobs.
• competition.
• opportunities for future workers, future apprentices and future entrepreneurs.

This is why the current debate matters.

The discussion should not only be about how much tax is collected today.

It should also be about whether we are creating an environment where people are willing to take the risks required to start, grow, invest in and eventually buy businesses.

Because when a business owner retires, the question is not whether the business has value.

The question is whether someone is willing to take the risk of owning it.

Part 5: Risk, Reward, and the Future of Business Investment in Australia

Every successful business starts with somebody taking a risk.

They:

• leave a secure job.
• invest their savings.
• work nights and weekends.
• are often paid less than their staff.  And unlike their staff, there is no guarantee they will be paid at all.
• accept years of uncertainty.

And they do all of this knowing there is a very real chance they could fail.

The question is simple.

Why would someone choose that path?

The answer is because they believe the potential reward is worth the risk.

That principle applies whether someone is opening a local plumbing business, building a technology startup or buying an existing business from a retiring owner.

People take risks because they believe they can build something valuable.

But capital, talent and ambition are increasingly mobile.

A skilled founder can build a business in Australia.

They can also build one in the United States.  Or Singapore.  Or the United Kingdom.

Investors can deploy capital almost anywhere in the world.

The question therefore becomes broader than tax.

What makes Australia an attractive place to take those risks?

What makes:

• someone choose to build a business here rather than somewhere else?
• a young entrepreneur decide that years of uncertainty are worth it?
• What makes an investor back a startup instead of putting money into property, shares or overseas opportunities?

These are important questions because every successful business started with somebody taking a chance.

The jobs created later only exist because somebody accepted the risk at the beginning.

The:

• apprentices hired in five years.
• managers promoted in ten years.
• business eventually sold to the next generation.

All of that starts with one person deciding the reward is worth pursuing.

If we want strong local businesses, strong communities and strong employment opportunities, we need people willing to take those risks.

And that means understanding that risk and reward are not opposing concepts.

They are partners.

Without risk there is no growth.

Without reward there is little reason to take the risk.

Conclusion: What Is Really Being Debated?

When people hear discussions about trusts, companies, shareholder loans and bucket companies, it is easy to view them as tax structures.

But as these examples demonstrate, they are often something else entirely.

The company and trust protected a family.

The founder loan protected years of work and investment.

The bucket company protected capital earmarked for future growth.

The business sale represented the reward for decades of risk and reinvestment.

And every new business begins with somebody deciding that the potential reward is worth the risk.

That is why this debate matters.

Because it is not only about tax.

It is about risk.

It is about investment.

It is about entrepreneurship.

It is about whether people are willing to build businesses, employ staff, reinvest profits and eventually pass those businesses to the next generation.

The businesses discussed throughout this article are not abstract tax structures.

They are the businesses that employ local workers.

Train apprentices.

Support suppliers.

Sponsor sporting clubs.

And help keep communities strong.

Every one of them exists because somebody was willing to take a risk.

The real question is not how we tax success after it happens.

The real question is whether enough people will still be willing to take the risk of creating that success in the first place.

Frequently Asked Questions: TiE Women Global Pitch Competition 2026

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The Fair Work Commission’s (FWC) Annual Wage Review decision takes effect from 1 July 2026. If your business employs staff under a modern award or relies on the National Minimum Wage, now is the critical window to audit your payroll systems and ensure strict compliance.

A common mistake among business owners is assuming that every employee simply receives a flat 4.75% increase. That is not the case for the 2026 financial year. Under the FWC’s latest structural adjustments, some employees on the lowest award classifications will receive a higher, targeted increase than the standard headline rate due to the Stage 1 phase-out of the C13 classification.

Failing to adjust these specific pay scales correctly places businesses at severe risk of involuntary underpayment claims and Fair Work Ombudsman (FWO) penalties.

📋 Your 1 July 2026 Payroll Audit Checklist

To safeguard your business against compliance issues, employers should execute a mini payroll audit before processing the first pay cycle in July. Follow these six essential steps:

Confirm Each Employee’s Modern Award Classification

Do not assume last year’s classifications still apply. Review staff roles to ensure their daily duties still align with their current award definitions. Pay close attention to employees who have:

• Taken on more responsibility
• Aged up (junior rates)
• Completed apprenticeships

Any of these milestones may automatically bump them into a higher pay bracket.

Source Official 2026 FWO Pay Guides

Avoid relying on third-party calculators or outdated blogs. Download the official, updated pay guides directly from the Fair Work Ombudsman (FWO) website as soon as they are published in mid-June. Ensure you are looking specifically at the rates marked effective 1 July 2026.

Run Comparative Pay Rate Audits

Line up your existing employee base hourly rates against the newly mandated minimums.

• National Minimum Wage: Ensure anyone on the base rate is moved to $26.44 per hour ($1,004.90 per week).
• Casual Employees: Remember that casual loading (typically 25%) must be recalculated based on the new, higher base rate.

Review Salaried and Annualised Wage Arrangements

If you pay staff an all-inclusive annual salary, you must perform a reconciliation. Ensure that the annual salary is still high enough to cover the new minimum award rates, including any overtime, weekend penalty rates, or allowances the employee actually worked. If the new award minimum outpaces the salary, you must top it up.

Forecast On-Costs (Superannuation & Leave Liabilities)

A wage increase does not happen in a vacuum. It triggers a cascading financial impact across your entire business overhead. Remember to factor in:

• Superannuation Guarantee (SG): Ensure your cash flow accounts for both the higher gross wage and your super obligations.
• Leave Liabilities: Long service leave and annual leave balances must be revalued on your balance sheet to reflect the new, higher hourly pay rates.
• Payroll Tax and Workers’ Compensation: Higher wages will incrementally bump up your state payroll tax obligations and insurance premiums.

⚖️ Do You Have to Increase Above-Award Pay?

A frequent point of confusion for employers is whether the 2026 wage increase applies to staff members who are already paid above the minimum rate.

The short answer: The Annual Wage Review legally changes the minimum safety net.

If an employee is already paid a flat contract rate that sits safely above the newly revised 2026 minimum award rate (including all applicable allowances and penalties), there may not be a legal requirement to increase their pay.

⚠️ Warning: Do Not Guess the Math

Every employee must be reviewed individually. If an above-award rate is absorbed by the new increase, the buffer you once had shrinks. If that employee works significant overtime or night shifts, their flat rate might suddenly fall below the new legal minimum.

The businesses that find themselves facing costly back-pay orders are rarely malicious; they are usually the ones that assumed the changes didn’t apply to them because they “pay well.” Taking a few hours to meticulously audit your payroll data now is the only way to prevent a systemic underpayment issue later.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The headline is simple: “Award wages increase by 4.75% from 1 July 2026”.

But once you look at the detail, it is not that simple.

The Commission has decided to increase the lowest-paid award classifications at a faster rate than the rest of the award system.

As a result, some employees will receive an increase closer to 5.97%, while others receive the headline 4.75%

For example, under the Hospitality Award:

• A Food & Beverage Attendant Grade 1 on $24.95 per hour will increase to $26.44 per hour (5.97% increase).
• But the Food & Beverage Attendant Grade 2 on $25.85 per hour will increase to $27.08 per hour (a 4.75% increase)

Two employees.  Same award.  Different percentage increases.

4 Steps to Ensure Payroll Compliance by 1 July

So, what appears to be a simple annual wage review now requires employers to:

• Review classification levels
• Check updated award rates
• Update payroll systems
• Test for compliance

And that is before considering the inevitable employee conversations when one team member discovers they received a bigger percentage increase than another.

Another day.

Another compliance change.

Another layer of red tape for business owners.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

Most Budget commentary focuses on headlines.

But the real impact on small business is usually buried deep in the Budget papers.

After working through the 2026–27 Federal Budget papers in detail, several themes become clear:

• discretionary trusts are firmly in the Government’s sights
• the tax system is shifting away from passive investment structures
• founders and startup businesses may face unintended consequences
• compliance and real-time reporting obligations are accelerating
• and the Government appears to be pushing SMEs toward more formal corporate structures.

Some of the proposed changes are significant and could materially impact:

• family business groups
• startup founders
• property investors
• professional firms
• and businesses operating through discretionary trusts.

Below is a practical breakdown of the key measures small and medium businesses should be watching closely.

Discretionary Trust Changes

One of the most significant reforms in the Budget is the proposed 30 per cent minimum tax on discretionary trusts from 1 July 2028.

This is arguably one of the largest discretionary trust reforms in decades.  The Government’s position is that discretionary trusts facilitate income splitting and provide tax advantages unavailable to ordinary wage earners, marking a clear policy shift toward ‘tax neutrality’ between employees and business owners.

Under the proposal:

• trustees would pay a 30 per cent minimum tax on trust income before it gets to the beneficiary.
• non corporate beneficiaries would receive a non-refundable credit for tax already paid.
• corporate beneficiaries will not get the credit for tax already paid.

The practical consequence is that the traditional tax-planning advantage of distributing income to lower-rate beneficiaries becomes substantially reduced.

For example, based on what is currently proposed, a discretionary trust distributes $50,000 to person.  The tax withheld by the trust would be $15,000.  A person earning $50,000 would normally pay around $6,500 in tax.  They would get the offset against this from the $15,000 from the trust and pay no more tax.  But the extra $8,500 tax paid by the trust is not recoverable.  And if the distribution was to a corporate beneficiary, the trust would without $15,000 tax and the corporate beneficiary would not get any benefit from this.  As you can see, distributions from trusts may result in additional tax being paid (the Government has stated it expects $4.5b in extra tax).

This has potentially major implications for:

• family businesses
• professional firms
• investment structures
• family groups using bucket companies (the corporate beneficiary).

At this stage, the final interaction between:

• bucket companies
• beneficiary distributions
• franking systems
• and trust taxation

will ultimately depend on legislative drafting.

However, based on the Budget papers, the reforms appear likely to materially reduce the effectiveness of many existing discretionary trust strategies.

The Government has recognised the scale of the change by proposing restructuring rollover relief to facilitate movement into:

• companies
• fixed trusts.

This is an important signal.  But there is no money to cover the costs you would incur to do this restructuring.

This proposal represents a major philosophical shift away from discretionary trusts as the default SME and family investment structure.

FYI, the minimum tax will not apply to primary production income of farms, certain income relating to vulnerable minors, amounts to which non-resident withholding tax applies and income from assets of testamentary trusts existing at announcement.

Capital Gains Tax Changes

The headline change is the replacement of the broad 50 per cent CGT discount from 1 July 2027.  Under the proposed reforms:

• the 50 per cent discount for individuals, trusts and partnerships would be removed.
• inflation indexation of the cost base would return.
• a 30 per cent minimum tax on real capital gains would apply.

Note Superannuation funds are not impacted by this decision.  Also excluded are investors who buy new property builds.  But currently pre-CGT assets (those purchased before September 1985), will be subject to tax on any gain after 30 June 2027.  This is a massive ‘hidden’ change. If you have owned an asset since before 1985, its ‘tax-free’ status effectively ends on 30 June 2027. Any growth after that date is taxable.

Valuation issues for all Business Owners

If you sell an asset like your business after 30 June 2027, there is a two-step process to determine the taxable capital gain. 

Step 1 – calculate the gain from when you acquired the asset, to what the asset is worth on 30 June 2027.  That gain will be subject to the 50% discount.  For example, cost base is $100,000 and value at 30 June 2027 was $500,000.  The gain is $400,000 and with the 50% discount the taxable gain would be $200,000.

Step 2 – Then for the growth in asset value after 30 June 2027, the taxable gain will be determined based on the selling price, less the indexed value of the business as at 30 June 2027.  Using the same example above, let’s say the asset sold for $750,000 and the indexed cost base (using the $500,000 value as at 30 June 2027) is $600,000, the taxable gain is $150,000.

This brings the total taxable capital gain to $350,000. 

Presented this way, it appears very simple from a maths perspective.  But to ensure you get the maximum benefit, you will need to determine the value of the asset such as your business, as at 1 July 2027.

The budget papers state an asset’s value at 1 July 2027 will be determined by taxpayers as part of their tax return in the year the asset is realised.  You can either:

• seek a valuation of the asset as at 1 July 2027, which will include using quoted prices for assets such as shares; or
• use a specified apportionment formula that estimates the asset’s value on 1 July 2027, based on its growth rate over the asset’s holding period. The ATO will provide tools to estimate this value for taxpayers.

The smartest option would be for business owner to know both numbers.  The pre 1 July 2027 gain using market value and the gain using the apportionment formula.  The problem is that if you want to do this, then every business owner / founder / investor will effectively need to value their business (and any other capital assets that they own) as at 30 June 2027 / 1 July 2027. 

I am not sure what “proof” the ATO will want around these valuations and whether they will want formal independent valuations for your business.   This could be an expensive and time-consuming exercise for all business owners.

Cost Base Issues for many Business Owners

One area that appears poorly accommodated by the reforms is startup founder and new business equity.  Startup founders and new business owners often:

• take minimal salaries for years
• contribute unpaid labour and risk
• hold equity with very low-cost bases. For example, they could have put $100 in as share capital.

Under the proposed indexed system, many founders may still face large taxable gains despite years of under-compensated work and significant commercial risk.

If the business is in existence today, they can get some relief by valuing their business as at 30 June 2027.  But for founders and new business owners who create new businesses after 30 June 2027, they may suffer from the low dollar indexation of their cost base.  $100 share capital indexed even by 50% is still only $150.  As a result, all bar $50 of what could be a large sale proceeds, would be subject to tax. 

This seems unfair.  But it looks like the Treasurer has heard this and has committed also consult with stakeholders on key details, including the treatment of early‑stage and start‑up businesses given the unique features of the tech and start‑up sector. 

R&D Tax incentive

The Budget significantly expands the R&D Tax Incentive framework while simultaneously increasing integrity and compliance activity. 

Some proposed changes to the R&D Tax incentive that impact small business and startups include:

• turnover threshold for the refundable offset increased to $50.0 million (was $20m).
• offset for businesses under $50m in turnover increases from 18.5% to 23%.
• Businesses over 10 years old will no longer receive a refundable tax offset
• increasing the minimum expenditure threshold to $50,000 (was $20,000).
• expenditure on supporting activities, will no longer be eligible. This will have an adverse impact on many claims.  Business will need to be mindful of how they categorize activity and expenses.
• the ATO has been given more money to look at compliance and fraud in the R&D Tax incentive space.

 Loss Carry Backs

One of the measures the Federal Government announced to help businesses is the permanent introduction of the Loss Carry Back.  This will apply to all businesses with a turnover up to $1 billion and start from the 2027 tax year.

If you have incurred a tax loss in any tax year from the 2027 tax year onwards, and you have paid tax in the previous 2 tax years, you may receive a cash refund of tax paid in these previous 2 years, or a reduction in the debt you owe the Australian Taxation Office.  Obviously, this is up to the higher of the after-tax value of the tax loss or the tax paid in those 2 years.

For example, you pay $100,000 tax in the 2026 tax year but have a tax loss of $50,000 in the 2027 year.  You will be eligible for a refund of $12,500 (being 25% of $50,000).  If the tax loss in the 2027 year was $500,000, the most you would be refunded is the $100,000 in tax you paid.

Loss refundability to help start-ups

From 1 July 2028, start‑up companies with aggregated annual turnover of less than $10m that generate a tax loss in their first two years of operation will be able to utilise the loss to generate a refundable tax offset.

The offset will be limited to the value of fringe benefits tax and withholding tax on wages paid in respect of Australian employees in the loss year.

Instant asset Write off to stay at $20,000 for Small Business

The $20,000 instant asset write off will now be made permanent for small business (turnover less than $10m).  This applies to sole traders, partnerships, trusts, or companies.

So, a plus for small business in that you don’t need to rush out and buy all those assets in June 2026 to get the deduction this year.  But if you are already planning to buy some equipment, you might as well do it before 30 June, as you get the deduction earlier.

Expanding venture capital incentives

Venture capital investors can operate through venture capital limited partnerships (VCLPs) and early-stage venture capital limited partnerships (ESVCLPs), which provide a ‘flow through’ structure and targeted tax incentives to the investors such as tax offsets. 

But these vehicles have caps on deal size.  The Budget proposes to increase the caps on these deal sizes.  Whilst this helps those businesses who fit the investment profile typically targeted by VC funds, this is no help to the many other great businesses out there who VC’s don’t fund.

Small Business Responsible Lending Obligation Exemption Extension

The Small Business Responsible Lending Obligation (RLO) exemption allows lenders to bypass strict “responsible lending” checks for loans intended for small business purposes, simplifying access to credit for small businesses.  This was due to expire on 3 October 2026 but is extended by a further 10 years.

Expansion of the ATO’s dynamic PAYG instalment pilot

This dynamic PAYG instalment pilot allows businesses to vary their PAYG instalments, without risk of interest changes, based on more up-to-date business conditions by using an ATO-approved dynamic instalment calculation embedded in your business accounting software.  Also, business can opt in to pay their PAYG monthly from 1 July 2027. 

It remains unclear whether this will improve SME cash flow outcomes as the budget papers say this increases tax collections.

AI and Productivity

You would expect with the current poor rates of productivity growth in Australia, there would be some effort towards using AI to improve productivity.  But AI barely gets mentioned in the main Budget Papers

There appears to be no money for small businesses to adopt AI to improve their business processes.  All I can see is $70m for the AI Accelerator CRC program rounds (see below for more on this), and more use of AI by government departments to make them more efficient.

To me this appears to be one of the weaker areas in the budget.  A lot of motherhood statements in this “Productivity Package” and I am not sure we will see any meaningful improvement in productivity if we rely on the Federal Government.

Continued or Stopped Funding for small business programs

The Federal Government will continue to fund the NewAccess for Small Business Owners Program and the Small Business Debt Helpline.

As part of the budget repair process the Federal Government has now closed the Australia’s Economic Accelerator (AEA) Ignite and Innovate Programs saving $800m+.  For those who don’t know this program was designed to connect university research with business to commercialise this research.  Large adverse hit to the ability to commercialise university research. 

But on the other side the Government is continuing to fund the Cooperative Research Centres (CRC) and CRC-P programs.  This includes $70m available through upcoming rounds of the starting in 2026 and 2027 for an ‘AI Accelerator’ to accelerate the development and commercialisation of AI by Australian researchers and businesses.  Business should be on the look for this and work out how they can partner with a university to access this funding.

There is mention in the budget papers for more funding for the CSIRO, but I am hearing of some programs closing.  So not sure where this funding is going.

On top of this, there are further savings of $266.2 million over five years from 2025–26 by redirecting uncommitted grant funding in the Industry, Science and Resources portfolio.  There is no mention of what specific grant programs, but I expect part of this is the reduced funding for the Industry Growth Program.

Will wait and see what other grant program cuts were buried in the budget.

Final Thoughts

This Budget is far more structurally significant than many of the media headlines suggest.

While there are some genuinely positive measures for SMEs, including the permanent instant asset write-off, expanded loss carry-back rules and startup support measures, the broader direction is clear:

• more compliance
• more transparency
• more real-time reporting
• and reduced reliance on traditional tax-planning structures.

For many businesses, particularly those operating through discretionary trusts or holding appreciating assets, the next few years may involve significant restructuring and planning decisions.

The detail of many of these measures will ultimately depend on legislation and consultation, so this remains an evolving space.

If you are a founder, business owner, or growing SME, this is the sort of environment where having strong strategic financial advice matters more than ever.

At aRealCFO, we help businesses navigate:

• growth and scaling
• cash flow and profitability
• funding and capital raising
• business structuring
• commercial strategy

If you would like to discuss how these proposed Budget changes may impact your business or structure, feel free to reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. Wayne may also be able to assist you in preparing any grant application. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

And Wayne is always posting about new grants, funding options and other resources on LinkedIn that can help your business scale and grow profitably.  Click on the below links and connect with Wayne or follow A Real CFO on LinkedIn.

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

I’m already talking to clients about FY27.
Most businesses haven’t locked in FY26 yet.

It sounds early.

But it isn’t.

While most businesses are still trying to land FY26, I am already having conversations with clients about FY27.
This is where effective FY27 business planning actually starts.

Not because we like planning for the sake of it.
Because good decisions need time to work.

The gap most businesses don’t see

Right now, a lot of business owners are:

• Trying to finish FY26 strong
• Starting to think about FY27
• Hoping next year looks better

But the reality is this:

The decisions that shape FY26 are already largely behind you.

Pricing changes
Hiring
New service or product lines
Positioning

These are not last-minute decisions. They are decisions made months earlier that show up in the numbers later.

Why we are already looking at FY27

Because strategy without time is just theory.

If you want FY27 to look different, you need to start now.

If you want to:

• Lift pricing without losing clients
• Reshape your client base
• Improve margins
• Build team capacity

You cannot decide that in June and expect it to show up in July.

You need:

• Time to test
• Time to adjust
• Time for the numbers to catch up

That is why the conversation moves forward.

FY26 should already be clear

At this point in the year, you should know:

• What your FY26 target is
• Where the pressure points are

If you are still “working it out,” you are already reacting, not planning.

The shift that actually matters

This is not about planning further into the future.

It is about operating differently.

Reactive businesses:

• Set targets late
• Explain results after the fact

Deliberate businesses:

• Make decisions early
• Track the right numbers
• Adjust before problems show up

One hopes FY27 improves things.
The other is already building it.

What you should be doing right now

Finish FY26 with intent:

• Know your numbers
• Understand what is working and what is not
• Be honest about the gaps

Then start shaping FY27:

• Set direction
• Identify the changes required
• Give yourself time to execute properly

The advantage doesn’t come from better goals.
It comes from starting earlier.

Planning Session: Build FY27 Before It Starts

If you want FY27 to look different, don’t wait for July.

I’m running a limited number of FY27 business planning sessions with business owners who want a clear, numbers-backed plan going into the new financial year.

In this paid working session, we will:

• Break down your FY27 revenue target into real drivers
• Identify where margin and cash are being lost
• Map the key changes needed across pricing, clients, and capacity
• Build a simple monthly structure you can actually execute

You will leave with a clear plan, not just ideas.

If you are serious about making FY27 different, message me for details and current availability.

email: Wayne@aRealCFO.com.au      Phone: 0412 227 052

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

There’s a simple truth at the centre of every successful business:

If it costs you more to acquire a customer than the value you get from them, growth will eventually break you.

It sounds obvious.

But in practice, it’s one of the most commonly ignored principles in business.

The Illusion of Growth

Revenue going up feels like success.

More customers, more sales, more activity.

But revenue alone doesn’t tell you if your business is actually getting stronger.

Because growth without the right economics is just amplified inefficiency.

You can be busier than ever and still be heading in the wrong direction.

What It Really Costs to Win a Customer

Most businesses underestimate what they spend to acquire a customer.

They look at marketing costs and stop there.

But the real cost is broader:

• Time spent chasing and converting leads
• Founder involvement in sales
• Discounts used to close deals
• Onboarding and setup effort
• Early-stage servicing intensity

When you add it all up, the number is often higher than expected.

And if you’re not measuring it properly, you’re making decisions without seeing the full picture.

What a Customer Is Actually Worth

On the flip side, many businesses undervalue their customers.

They focus on the first transaction.

Maybe the first year.

But real value builds over time:

• Repeat business
• Upsells and additional services
• Referrals to new customers
• Price increases as trust grows
• Efficiency gains in servicing

The gap between what you think a customer is worth and what they actually deliver can be significant.

And that gap matters.

Where It Breaks Down

Problems don’t usually come from one bad decision.

They come from small misalignments across the business:

• Marketing focused on volume instead of quality
• Sales rewarded for closing, not for profitability
• Pricing set by competitors instead of economics
• Delivery teams absorbing inefficiencies to retain clients

Each choice makes sense in isolation.

Together, they erode margins and strain cash flow.

The Businesses That Get It Right

Sustainable growth comes from discipline.

Businesses that scale successfully keep coming back to one question:

Are we making more from a customer than it costs us to win them?

And they don’t just answer it once.

They build systems around it.

They:

• Track acquisition costs properly
• Understand customer lifetime value
• Adjust pricing when needed
• Focus on the right customers, not just more customers
• Make decisions based on data, not assumptions

Most importantly, they act on what they find.

Why This Matters More Than Ever

In tighter economic conditions, this equation becomes critical.

Margins get squeezed.

Costs rise.

Customers become more selective.

If your acquisition cost is too high, or your customer value too low, the cracks show quickly.

The Bottom Line

Growth isn’t just about getting more customers.

It’s about getting the right customers, at the right cost, with the right value over time.

Get that balance right, and growth becomes sustainable.

Get it wrong, and growth becomes expensive.

If you’re not completely clear on your numbers, this is where to start.

Ask yourself:

• Do I know my true cost to acquire a customer?
• Do I understand the full value that customer delivers over time?
• Are we growing profitably, or just getting busier?

If the answers aren’t clear, it’s worth fixing.

Because this isn’t just a finance metric.

It’s the foundation of whether your business scales, or stalls.

If you want help breaking down your acquisition costs and customer value, reach out. A short conversation can often uncover where the real opportunity (or risk) sits.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

“No one else gets up in the morning dedicated to your business’s financial future. You need to be that person.”

I saw this play out in real time.

A business owner had built a strong flagship location.

It worked.
Good revenue.
Healthy margins.
Cash flow under control.

They knew the numbers because they were in it every day. Watching. Questioning. Adjusting.

So when the opportunity came up to acquire two similar businesses in different locations, it made sense.

Same model. Same industry. Proven playbook.

They bought both.

And on day one, nothing looked wrong.

The reports came in.
Revenue was there.
Operations were running.

But their attention stayed anchored to the original site.

That’s where they still spent most of their time.
That’s where decisions were made quickly.
That’s where the numbers were reviewed properly.

The two new locations?

They were left to run.

Not ignored. Just… not owned.

Each week, the numbers would come through.

They’d get glanced at. Maybe a quick check.

But no deep dive.
No pressure on performance.
No consistent questioning of what was actually happening underneath.

And because nothing looked urgent, nothing felt urgent.

That’s how it starts.

Costs moved a little.
Margins tightened slightly.
Revenue softened in ways that were easy to explain away.

Individually, none of it justified attention.

So attention stayed where it always had been, the original business.

Months passed.

The gap widened.

The flagship kept performing because it had someone waking up every day thinking about its financial future.

The other two didn’t.

By the time the owner properly re-engaged, the shift was obvious.

The numbers weren’t just off.
The value had eroded.

What they had purchased, the profitability, the strength, the upside, had largely disappeared.

Not because the businesses couldn’t work.

But because no one was showing up to make sure they did.

That’s the part most people miss.

There was a bookkeeper.
There were reports.
There was external support.

But no one was waking up in the morning thinking:

Are these businesses financially doing what they should be doing?

Except the one person who could have.

And they were focused somewhere else.

You can outsource the work.
You can outsource the reporting.
You can even outsource advice.

But you cannot outsource that moment, the daily ownership of where the business is heading financially.

Because the business that gets attention improves.

The one that doesn’t… drifts.

And drift is expensive.

“No one else gets up in the morning dedicated to your business’s financial future.”

In this case, that was all it took.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

The Reserve Bank of Australia is cutting interchange fees and banning surcharges, but the real impact on business margins is often misunderstood.

The End of “Pass-Through” Card Fees

For years, many Australian businesses have treated card fees as a pass-through cost.

Customer pays by card → fee gets added → business stays whole.
Simple.

But recent changes from the Reserve Bank of Australia are about to fundamentally reset that model.

From 1 October 2026, two things happen at once:

• Interchange fees are cut significantly, with the interchange component dropping from around 0.8% → 0.3%
• Card surcharges are banned

This changes how many businesses manage pricing, margins, and profitability.

What Are Merchant Fees in Australia?

Breaking Down the Typical 1.8% Merchant Fee

Let’s start with the headline number most businesses recognise:

“I pay about 1.8% in merchant or card fees in Australia.”

That 1.8% isn’t one fee, it’s a bundle:

• ~0.8% interchange fees (set within the payments system)
• ~1.0% made up of card network fees (e.g. Visa, Mastercard) and your provider’s margin

How the RBA Interchange Fee Changes Impact Your Costs

In simple terms, your total cost does fall.

Using the example above:
1.8% → ~1.3% (if interchange savings are fully passed through)

So yes, your costs reduce by around 0.5%.

But that’s only half the story.

The Hidden Impact of the Credit Card Surcharge Ban

Why Lower Fees Don’t Always Mean Higher Profit

If you were already absorbing merchant fees:
👉 Good outcome, your costs fall and your margin improves.

But if you were passing on credit card surcharges:

• 👉 Your costs drop 0.5%
• 👉 Your revenue drops 1.8%

That’s a net negative impact on margin.

Example: How the Surcharge Ban Affects a $100 Sale

Old vs New Payment Economics

Let’s say you sell something for $100.

Old world (with surcharge):

• Customer pays: $101.80
• You receive: $100

New world (no surcharge):

You now have two choices.

Option 1: Absorb the cost

• Customer pays: $100
• You receive: ~$98.60–$98.80

Option 2: Adjust pricing

• Customer pays: ~$101–$102
• You maintain your margin

How to Reduce Merchant Fees in Australia

If you’re currently passing on merchant fees, you need to act, not drift.

1. Review Your Payment Provider

Many businesses haven’t focused on their merchant rate because:

“It was always passed on anyway.”

That mindset no longer works.

2. Reduce Your Underlying Payment Costs

Start with:

• Least-cost routing (debit over credit)
• Lower-cost providers
• Alternative payment methods like PayID and Osko

3. Rethink Your Pricing Strategy

You have two options:

• Do nothing → your margins fall
• Adjust pricing → recover some or all of the cost

But make it a conscious decision.

What Businesses Should Do Before October 2026

• Review your merchant fee structure
• Understand your payment mix (debit vs credit)
• Model the impact on margins
• Decide how you will adjust pricing

The Bottom Line on RBA Card Fee Changes

Yes, merchant fees in Australia are coming down.

But the bigger shift is this:

You’re losing the ability to pass them on.

What was once a neutral cost is now a direct margin decision.

Ignore it, and you will feel it.
Manage it, and you can come out ahead.

Next Steps

If you want to review your current merchant costs, speak to a provider like Shabaas Pay (full disclosure: a business I work with).

If you want help working through what this means for your pricing and margins, feel free to reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

A chairman brought me into a business for one reason:

The CEO knew the product inside out…
But had very little cash flow management experience.

So we built a simple cloud-based cash flow forecast the whole leadership team could see and use.

And everything changed.

Now:
💰 He knew exactly when he could pay people
⚠️ He knew when pressure was coming
⏱️ He knew when to move early instead of react late

🔍 It even picked up when the bookkeeper hadn’t billed some clients

No guesswork. No surprises.

He ran the business off the model.

Even more importantly, it changed how they made decisions.

When their cash buffer approached ~$200k:
🚀 They didn’t wait
💡 They raised capital early

When projections showed it happening again:
📊 They were already preparing the next raise

That was the difference.

Cash flow forecasting wasn’t about the numbers.
It was about timing decisions before they became problems.

Most businesses didn’t fail because they ran out of cash.

They failed because they saw it too late.

If you don’t have this level of visibility, you’re guessing.

If you want help building a model like this → reach out.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052

I had a client hit hard during the Global Financial Crisis.

Revenue dropped.
Business confidence disappeared.
Activity slowed almost overnight.

By the time I got involved:

They had over $300k in tax debt (ATO + payroll tax).

Not a strategy problem.
A cash problem.

So we did something simple.

📅 Every Friday at 10am
📊 One cash flow conversation
🔍 Focus: the next 4 weeks only

Each week we asked:
👉 Can we pay staff?
👉 Can we meet tax obligations?
👉 If not, what needs to be renegotiated now?

No guessing.
No hoping.
Just decisions.

Week by week, they:
✔️ Stabilised cash
✔️ Negotiated with the ATO
✔️ Paid down the debt
✔️ Stayed alive

Today, the business still exists.

Without that forecast and discipline?

❌ Likely liquidation
❌ Directors personally liable
❌ Business gone
❌ Personal assets at risk

Cash flow forecasting isn’t about reports.
It’s about survival decisions before it’s too late.

If you don’t have a clear view of the next 4–8 weeks, you’re flying blind.

I help businesses build simple, practical cash flow forecasts that drive decisions (not spreadsheets).

Send me a message if you want to put one in place.

Wayne Wanders is an experienced Business Advisor and Outsourced CFO who can help to scale and grow your business profitably. 

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

Click on the below buttons to access other free Resources developed by Wayne Wanders, A Real CFO to help your business scale and grow profitably

Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052