The Numbers
Australia's Federal Budget 2026 revives the loss carry-back scheme for companies with annual turnover under $1 billion. Current-year losses can offset tax paid in the prior two years. Treasury estimates this will decrease receipts by $2.3 billion over five years from 2025-26.
The scheme targets 2.5 million Australian SMEs that contribute 68% of GDP and employ 7.5 million people, per ATO and ABS data.
What Changed
This is a scaled-back version of COVID-era relief. During 2020-2022, businesses with turnover up to $5 billion qualified. The government tried to revive this in the 2022-23 budget but repealed it after 12 months. This version caps eligibility at $1 billion turnover and limits carry-backs to revenue losses only, restricted by franking account balances.
The policy runs alongside expanded instant asset write-offs (up to $30,000) and R&D tax incentives extended to March 2027.
Why Sales Teams Care
Cash flow matters for hiring. ANZ startups raised $4.2B in 2025 (Australia) and $500M (New Zealand), per Blackbird Ventures data. But the VC market is down 15% year-on-year. Loss carry-backs mean startups burning cash while scaling sales teams can get refunds instead of waiting years to use losses.
Companies like SafetyCulture (1,200 headcount, recent CRO hire) and the broader ANZ ecosystem (ranked #6 globally by StartupBlink 2026) benefit from improved liquidity. That translates to more predictable hiring plans and less pressure to hit profitability before building out go-to-market teams.
The Reality Check
The scheme was repealed once already. Treasury calls this permanent, but policy changes when governments change. The $1B cap excludes larger scale-ups. And the franking account restriction means companies need prior-year profits to carry losses back against, which limits utility for pure early-stage startups.
Still, for growth-stage companies with 2-3 years of revenue history now investing in sales capacity, this is real money back faster than traditional loss carryforwards.