Treasurer Jim Chalmers handed down the 2026-27 Budget on 12 May, and for once it gave startups more than passing acknowledgement. There is real money on the table, some genuine wins, and a couple of measures that change the long-game economics for founders. Here is the tight version.

The wins

$20,000 instant asset write-off, now permanent

From 1 July 2026, small businesses under $10m turnover can keep instantly deducting eligible asset purchases up to $20,000. The threshold is not new. The certainty is. No more last-minute EOFY extensions.

Loss carry-back is back

From 1 July 2026, companies under $1bn turnover can carry a revenue tax loss back against tax paid in the previous two years and get a cash refund. The refund is capped at the company tax you’ve actually paid in the previous two years. A COVID-era measure returning permanently. After two lean years, many startups have hunkered down to modest profitability. Loss carry-back is the lever to get those same companies investing again. Reinvest, take a deliberate loss year, and the ATO refunds some of the tax you’ve just started paying.

New loss refundability for early-stage startups

From 1 July 2028, loss-making startups under $10m turnover in their first two years can convert losses into a refundable offset, capped at FBT and PAYG withholding on Australian wages. In plain English: hire local staff in your first two years, and the government refunds you the payroll taxes against your losses. Combined with R&D refundability, this is a genuinely useful early-stage cash mechanism.

We have written a separate, more technical piece on how loss carry-back and loss refundability work in practice, with worked examples for each.

The R&D restructure

The R&D restructure is significant, but it won’t affect things yet. From 1 July 2028, the R&D Tax Incentive is being rebuilt:

• Minimum claim threshold rises from $20,000 to $50,000
• Core offset rates increase from 43.5% to roughly 48%
• Supporting R&D activities lose eligibility
• Refundable offset turnover threshold lifts from $20m to $50m
• Refundability is capped at companies under 10 years old

Some startups will be better off. Hardware, biotech, software and deep tech founders will mostly be worse off. We have written a separate deep dive on the R&D changes covering the detail and what to do about it.

The grenades

30% minimum tax on discretionary trusts (committed)

From 1 July 2028, trust income at the trustee level faces a 30% floor. With 30% now captured at the trust level, the benefit of streaming to lower-taxed beneficiaries is gone, and bucket company strategies are blocked. For founders who are the sole or majority beneficiary on the top marginal rate, the trust change itself doesn’t shift your total tax. The flow-through mechanism is unchanged.

CGT discount being replaced (subject to consultation for startups)

From 1 July 2027, the 50% CGT discount is replaced with an inflation-indexed model plus a 30% minimum tax on capital gains. For founders eyeing an exit, the effective tax burden on gains roughly doubles. The government has explicitly flagged consultation on a carve-out for early-stage and startup businesses. No detail or timeline yet, but the outcome of that consultation is the single biggest variable on what an exit actually costs.

This also reshapes how startups use equity to attract and retain talent. Employee Share Ownership Plans, loan-backed share plans and premium-priced options all become less attractive.

We have written a separate piece on CGT and trust changes for founders with worked examples on what an exit through a trust looks like under the new rules.

If you’re setting up a new company now and wondering whether to still use a trust, we have a separate piece on that question.

Also worth knowing

On the venture capital side, VCLP and ESVCLP thresholds expand from 1 July 2027, meaning bigger funds and a wider pool of eligible investee companies for Series A and B rounds. Working against that, the Eligible Venture Capital Investor program closed to new applications on budget night, removing one of the tax-efficient pathways angel investors and family offices used to write early cheques. Both matter more to your investors than to you directly, but they shape the capital you can raise.

This is general information, not advice. The rules above are technical and the right move depends on your specific situation.