By Peter Biazos
Following the 2025 Federal Election, which resulted in a decisive victory for the Labor Party under Prime Minister Anthony Albanese, I wanted to reflect on what the outcome might mean for small business owners.
In the lead up to the Federal Election many people were asking me how I thought the outcome would affect small business owners.
From where was sitting, whether it was Labor or Liberal, I didn’t see the outcome dramatically changing the outlook for Australian businesses.
The issues businesses are facing right now are bigger than politics. They’re legacy and structural problems that have been building for years.
The Legacy of COVID: Why Pressure Is Mounting
In my view, the reason we’re seeing record insolvencies in this moment goes back to COVID. During the pandemic, the government stepped in with JobKeeper, propped up businesses, and recoveries slowed right down. Wind-ups were at an all-time low.
Image Source: Alares.com.au March Insights 2025
All that did was kick the can down the road. The problems didn’t go away. They were just delayed.
Now we’re seeing the fallout: businesses under pressure, insolvencies hitting historical highs (running 50% higher than pre-COVID levels), and many underlying issues hidden during COVID are finally coming to the surface.
Image Source: Alares.com.au March Insights 2025
In addition, the rising cost of everything, including electricity, wage increases, and transport expenses, is forcing many businesses to pass these on to customers. Cost-of-living increases are really hitting businesses from every angle. It’s no wonder it’s tough out there
Hospitality Is One of the Hardest Hit
One of the sectors we’re seeing hit particularly hard is hospitality.
Coffee shop, cafe, and restaurant owners tell me the same thing, costs are going through the roof. “I’ve had to bump up my coffee prices because electricity’s up, milk’s up, wages are up,” one operator told me recently.
On top of that, hospitality businesses are struggling to find and keep staff. There’s very high staff turnover. Businesses are training people up and then losing them just as quickly, which is creating a constant drain on resources. It’s a real challenge.
“In 2024, we saw one in 10 cafes close their doors, which is disheartening and absolutely terrible. Myself and the team at the Coffee Commune are committed to making things better moving forward and inspiring the next generation to be the best version they can be.”
Phillip di Bella, Founder and MD Coffee Commune
Small Business Restructures Are Helping, And Are Here to Stay
One Labor Government initiative brought in during 2021 was the Small Business Restructure (SBR) process. It’s been a real lifesaver for many businesses, saving jobs and keeping them running.
When SBRs first launched, we didn’t see a huge take-up. In that first year, there were 10 in Australia, and we did one of them. With some assistance, we had to write our own standards for running them because nothing was out there yet.
Now, take-up has grown massively, and we’ve seen it become too embedded for it to go anywhere.
Minority Government? More Uncertainty
The polling suggested we would be heading toward a Labor majority government, however there was speculation that Labor might have fallen short and would have to rely on the Greens.
From a business point of view, minority governments usually just bring more uncertainty. Things move more slowly, decision-making becomes harder, and businesses and markets don’t like that.
The decisive Labor win is reassuring but I don’t think it will change the underlying pressures businesses are under in the short term.
The ATO Isn’t Letting Up
Typically, before an election, you’d expect a pause in ATO recovery action, but not this time.
Prior to the election, the ATO was aggressively reporting businesses with debts over $100,000 to credit bureaus.
There are over 30,000 companies that have been reported. And in the lead up to the election I was hearing that the ATO wasn’t slowing down. If anything, there was even more pressure on businesses.
Some Final Thoughts: Act Early, Don’t Wait
My message to our B&T Advisory business community through my various discussions was simple: I didn’t think the election outcome would change our operating environment in the short term.
As always my advice is. Be proactive. Act early if you see businesses with mounting tax debt, cash flow problems, or creditor pressure.
We’ve seen firsthand how much of a difference Small Business Restructurings can make – they’re saving businesses, jobs, and, in some cases, literally saving lives.
Early action is critical during rising costs, aggressive enforcement, and political uncertainty.
If you have clients struggling with ATO debt or cash flow issues, reach out to discuss all the viable options. We’re seeing record numbers of insolvency activity, and getting in early gives your client the best chance.
Contact our office for a confidential discussion.