Offshore teams · 30 October 2026

Labor tax pressure warning hits SMEs – immediate cost impact

This week Labour’s tax agenda was flagged by Hanson and Price, signalling real cost increases for small firms. The guide shows how to quantify the hit and act now to safeguard cash flow.

On 28 October 2026 Pauline Hanson and Jacinta Price warned that the Labor government is tightening tax levers on small businesses, a signal that could translate into an extra 1-2 per cent of profit being siphoned off as tax. For a company posting a $500,000 profit, that is an additional $5,000-$10,000 out of pocket each year – money that could otherwise fund growth or staff development.

What the new tax warnings mean for your bottom line

The warning centres on potential changes to company tax rates, GST thresholds and superannuation guarantee contributions. While the exact policy details are still being drafted, the Labour party’s recent budget discussion hinted at a 0.5-percentage-point rise in the corporate tax rate and a tightening of GST registration rules for businesses under $75,000 turnover. For an SME with $1 million in revenue, a 0.5 point rise could mean $5,000 more in tax each year. The immediate action is to model these scenarios in your cash-flow forecast so you know exactly how much cushion you need.

Construction boom offers a buffer – how to leverage sector growth

On the same day, CFOtech reported that construction activity is driving the strongest sales growth among Australian small businesses. The sector saw a double-digit rise in contract values in Q3 2026, pulling overall SME revenue higher. If your business can tap into construction-related projects – whether through subcontracting, supply of materials or specialised services – you can offset higher tax outlays with increased turnover. For example, a $200,000 contract that adds $30,000 gross profit can cover a $10,000 tax increase while still leaving a healthy margin. Align your sales pipeline with the construction calendar and consider temporary staff or an offshore team to scale quickly without the full cost of permanent hires.

Learning from New Zealand’s sales surge – competitive edge

Meanwhile, Xero data released on 28 October 2026 shows New Zealand small-business sales up 5.6 per cent, outpacing Australia, the UK and the US. The NZ growth is linked to early adoption of cloud-based accounting, tighter expense tracking and aggressive use of R&D tax incentives. Australian SMEs can emulate this by tightening expense categorisation, ensuring every eligible deduction – such as software licences, training and energy-efficient equipment – is claimed. A modest 2 per cent reduction in taxable profit for a $500,000 profit business saves $10,000, effectively neutralising the Labour tax pressure highlighted by Hanson and Price.

Practical steps to protect cash flow now

Run a tax-impact scenario in your accounting software – model a 0.5 percentage-point corporate tax rise and a GST threshold change.
Audit your expense ledger for missed deductions – focus on software, training, and energy-saving assets.
Shift sales focus toward high-margin construction projects that are currently expanding.
Consider a fractional HR partner to keep compliance costs low and avoid costly payroll errors; ACTIv8’s how ACTIv8 works page explains the model.
If you need flexible staffing, explore outsourced HR or an offshore team to cover peak periods without the full salary burden.
Review your plans and pricing to ensure you’re not over-paying for services that can be bundled.

Rather have someone own this for you? Reach out to ACTIv8. Senior HR support for less than half the cost of hiring in-house.

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