The Reserve Bank held the cash rate at 3.85% at its May meeting, citing sticky services inflation and a tight labour market. Small business borrowers face continued pressure on variable loan rates, though some lenders have begun offering competitive refinancing packages.
The ATO announced a new compliance program targeting payroll tax, contractor classification, and GST reporting for small businesses under $10M revenue. The initiative includes enhanced data matching and dedicated compliance officers.
Changes to casual conversion rules and parental leave entitlements came into effect. Small business owners should review employment contracts and workplace policies to ensure compliance with the updated National Employment Standards.
The Westpac-Melbourne Institute Consumer Confidence Index rose 2.1% in May. While households remain cautious, easing inflation and a steady labour market are supporting a modest improvement in sentiment — a positive sign for small business retail and hospitality operators.
Major banks are tightening lending criteria for small business loans, with higher serviceability buffers and increased documentation requirements. Brokers report a shift toward asset-backed lending over unsecured business loans.
Key tax changes from 1 July include higher instant asset write-off thresholds, revised FBT provisions for electric vehicles, and updated ATO compliance priorities. Accountants urge business owners to review their structure ahead of year-end.
The latest Closing Loops industrial relations amendments include changes to enterprise bargaining, union entry rights, and fixed-term contract limits. Small business operators should understand their new obligations under the Fair Work Act.
Monthly CPI eased to 3.2% in April, down from 3.5% in March. While headline inflation is moderating, small business input costs — particularly insurance, energy, and wages — continue to run above the CPI average.
Small business insurance premiums rose an average of 8.7% over the past year, with public liability and professional indemnity seeing the largest increases. Brokers recommend annual policy reviews and exploring alternative providers.
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