The recent budget has sent shockwaves through the small business community, not just because of the numbers, but because of the way it was delivered. After years of relative consistency, business owners and investors were hit with significant changes to trusts, capital gains, and negative gearing with almost no warning. This lack of transparency has led many to question whether the risk of running a business is still worth the reward.

In this episode, I explore the psychological and financial fallout of these sudden shifts. We look at why the erosion of confidence is the biggest threat to the economy and how business owners can regain their footing. It is a conversation about staying calm in the face of uncertainty and finding the opportunities that still exist within a changing playing field.

Whether you are feeling the pinch of new superannuation rules or worrying about the future of your family trust, this discussion provides a roadmap for navigating the next two years. We break down why mindset is just as important as the balance sheet when the government decides to change the rules overnight.

What You Will Learn:

• Why was the secrecy surrounding this budget so unusual compared to previous years?

• How do sudden changes to trust taxation impact long-term wealth creation strategies?

• What is the best way to handle the anxiety of potential future rule changes?

• Why is cashflow monitoring becoming even more critical for small businesses right now?

• How can you determine if it is time to bring your business sale forward?

• Why does loving your business make you more resilient to legislative shifts?

Key Takeaways:

• Avoid knee-jerk reactions: We have a window of time before many changes take effect, so use it to analyse rather than panic.

• Confidence erosion: The way the budget was handled has made business owners question the long-term stability of the rules.

• Focus on core strengths: A profitable and cashflow-positive business can be adapted to almost any tax environment.

• Strategic timing: The new rules might provide a prompt for those near retirement to consider selling sooner rather than later.

• Mindset matters: Maintaining enthusiasm for growth is difficult but essential for navigating economic ups and downs.

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#SmallBusinessAustralia #AusBudget #TaxStrategy #BusinessConfidence #BucketListAccountant #FinancialPlanning

#EntrepreneurMindset #WealthCreation

Contact details:

David Patterson on LinkedIn

The Bucketlist Accountant: Because financial freedom shouldn't mean sacrificing your wildest dreams.

Subscribe now and get ready to take control of your money and your life!

Co-host: Anthony Perl

Produced by: 'Podcasts Done for You'

The budget impact, navigating uncertainty

2

and restoring confidence.

3

Join the bucket list accountant

himself, David Paterson, as we

4

explore the significant and unexpected

changes from the recent budget.

5

Learn why the secrecy surrounding these

announcements has eroded small business

6

confidence, discover why you should not

overreact to legislative shifts, and gain

7

insights into how to maintain a positive

mindset when the rules of the game change.

8

You will get a real-world look at how

to assess your business strengths in

9

the face of the new tax regulations.

10

I'm your co-host, Anthony Perl.

11

Let's get into making your bucket list

happen David, an important episode of

12

the podcast because we're gonna talk

about something that's been in the news

13

quite a bit, the budget, and it seems

to have had a bigger impact than any

14

budget I can remember in some time.

15

David Patterson: I'd agree, Anthony.

16

I think probably the last, I don't

know, 10 to 12 budgets at least,

17

at the very least, they have a few

little changes chucked in there, but

18

nothing of any great significance.

19

And most changes that have happened

in prior budgets, you've got a

20

little bit of a heads-up about them.

21

You know, they've just leaked some

information just prior to budgets to get

22

a feel for the changes and how people are

gonna impact on them, whereas this one,

23

I mean, it just hit us between the eyes.

24

There was no warning and pow,

it, it whacked all of us.

25

Anthony Perl: Yeah, I mean, I think that's

the interesting thing that you make the

26

point of there is that normally with a

budget- Mm … there's a bit of testing

27

the waters, there's a bit of consultation

before they're, you know, looking at it.

28

There's a lot of leaks that

happen immediately prior to it.

29

It seems like this time they just

threw a whole bunch of stuff out

30

there and hoped that everyone

was gonna jump and go, "Yay."

31

David Patterson: Like I said, it's

just bizarre the way it came about

32

and the secrecy that seemed to

be around it prior to the budget.

33

These changes aren't small changes,

they're significant, highly impactful

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changes on all of us, small business

owners, you know, investors, you name it.

35

This has had a f- big

significant impact on everybody.

36

Anthony Perl: I guess the importance

of the discussion we're gonna have

37

today is not so much about the

details of all the ins and outs of

38

the budget, except to say that that's

one of the challenges, isn't it?

39

Even for accountants, is to

how do you actually work out

40

what all of these things mean?

41

What actually is the right

advice to be giving people?

42

Because you need the right advice too

in what is kind of something that seems

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to be growing and changing by the day.

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David Patterson: That's right, and the

hard part for me in between, you know,

45

budget announcements and going into

legislation, was trying to help clients

46

navigate changes to their business

that were happening in conjunction.

47

So all of a sudden they changed the rules

and starting to tax trusts, for example,

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and changes that we'd been building into

existing clients, you suddenly have to

49

re-look at them and say, "Well, you know,

is going into a trust the best option for

50

them, or is there now a better way to make

the changes that we were looking to make?"

51

And it just became really difficult

to be able to give proper advice to

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clients in that little window because

no one knew exactly where it was gonna

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end up and where it was gonna sit.

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So probably been a difficult

couple of months to try and get

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your head around those changes.

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To be able to properly advise clients

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Anthony Perl: And again, without going

into too much detail, if you just look

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at, it covered a myriad of different

areas, 'cause it wasn't just one thing.

59

It wasn't just, as you say, about trusts.

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There was a whole range of

things that this is-- that

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different things have come up.

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David Patterson: Well, it's, it's

covered off on everything, you know.

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The trusts, the capital gains, negative

gearing, all of these areas that…

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And bucket companies and not being able to

get the flow-through of tax from a trust.

65

All these things that have been set

up over the time with clients to help

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them maximize their wealth creation

as much as anything suddenly becomes

67

difficult to maneuver and to manage and

other things that we need to change.

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A-And to have it come out of the

blue, I think was the extra bit

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that really impacted on people,

the fact that no one knew these

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things were gonna come into play.

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I had a client, for example, who was

looking to buy an investment property

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as the budget was coming through.

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No one knew what was going to happen,

and then all of a sudden they're ringing

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me sort of the night after the budget

in a panic saying, "Well, should I still

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be buying these investment properties?

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Is there something we should be doing?"

77

And again, trying to make a decision

from my perspective as the accountant

78

and advising them on that, knowing

how it was all gonna play out at that

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point in time, was frustrating for

both of us to be able to work through

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what the best thing to do there was.

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Anthony Perl: Yeah.

82

And before we get into sort of what that

has done for people and businesses in

83

particular, I think it's important to

give it a context of there were things

84

that we knew were changing already anyway

in terms of superannuation and credit

85

cards and the way they're being treated,

all of those things already in motion.

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So this is coupled on the back of that.

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David Patterson: Well,

that's exactly right.

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And just the impact on, if we just

look at small businesses for the in--

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first minute, there's the, the credit

card and the stopping of the surcharge

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in the end of September, the effective

doubling up of superannuation over a

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quarter, so paying for the June quarter

and paying for the September quarter

92

on a weekly or fortnightly basis

just adds to the, I guess the stress

93

of cash flow for a small business.

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They were the known things

coming in, like you said.

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To then chuck in on top of that all these

other areas that whilst they may not for

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the small business have a impact day to

day, it's still from an overall planning

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perspective something that got a lot of

business owners talking as to what that

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meant for them and what impact it was

gonna have and whether they were doing the

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right thing, whether they should change.

100

And trying to keep them calm, I guess,

in the face of that, it was hard.

101

But also trying to instill a bit of

confidence in them too was difficult

102

as well, and I think that's another big

part that's come out of this budget, is

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the lack of confidence that people now

have in decision-making going forward.

104

Anthony Perl: You've kind of alluded to

that a little bit here, but I just wanna

105

unpack it a little bit more in terms

of saying: where would you see a small

106

business in terms of its thinking process

and its assessment of the market was,

107

let's say, six months ago, two years ago?

108

How have you seen that change?

109

David Patterson: At least in the last

few years, things have been fairly

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consistent and solid in, in how things

are tracking along, and people could

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make decisions and plan based on what

the rules are and what the rules had

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been for a fairly long period of time.

113

Obviously, you have your economic ups

and downs from time to time, where

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you lose a little bit of confidence

in how things are going, and interest

115

rate movements can have a bit of

an impact in those things as well.

116

But from an overall structural

perspective, we had a fair amount

117

of consistency for years coming into

the budget, which meant that people

118

could plan for a bit of a longer

term future, knowing that the rules

119

were what the rules were and that…

120

And we didn't think they were really

gonna change going forward, but that's

121

turned out to be not quite correct.

122

Anthony Perl: This podcast is brought

to you by bucketlistaccounting.com.au.

123

Speak to David Patterson and his

team if you want to take better

124

control of your life and business.

125

Helping small business

owners like you be successful

126

David Patterson: designing

the life of your dreams.

127

Go to bucketlistaccounting.com.au

128

or check out the show

notes for more information.

129

Now back to the program.

130

Anthony Perl: Change is always difficult

for anybody, whatever the change is.

131

And there's always going to be

an element of people that are

132

going to be, "Right, that's it."

133

Yep.

134

"The change is gonna

be the tipping point."

135

And so how do you see that in terms

of the people you're dealing with,

136

particularly those in small business?

137

What percentage are sort of at that

tipping point, right, going, "That's

138

it, I'm out," versus, "This is just

a mindset thing that people need to

139

change, and we can see a way around this

in terms of continuing with business"?

140

David Patterson: Yeah, that's

a really good question.

141

I think the mindset part is very

important, and I think off the back of

142

the budget and the first little small

period of time there off the back of

143

that, there were a lot of conversations

with small business owners around

144

what-- them wondering whether it was

all worth it and why should they keep

145

working hard to build their business

when the government might change the

146

rules at any point in time and sort of

take the rug out from underneath them.

147

And for me, that's a really disappointing

element of all of this, is the erosion

148

of people's confidence in being able

to run their own small business and

149

looking to the future and not really

being able to see the fact that there

150

is light at the end of the tunnel if

they continue doing what they're doing.

151

So from that point of view, these changes

that were coming in, for me, that's

152

the biggest impact that it's had, is

just eroded people's want to work hard

153

to grow and to build their business

because now they're unsure as to what

154

that's gonna look like in the future.

155

And I think it's twofold.

156

One was the rule changes that came

in, but I think the biggest part

157

of it was just the way it was done.

158

Prior to the election, you know, it

was, it was categorically put out

159

there that we're not gonna mess with

these certain areas, we're not gonna

160

change this, we're not gonna do that.

161

And, and then budget night comes along

and bang, the things that they weren't

162

gonna change have suddenly changed.

163

And so then the question came

from small business owners.

164

It was like, "Well, if they can do that

and change those things, what else are

165

they gonna change in the future that's

gonna make it harder and harder for us

166

to, you know, retire and be able to do the

things that we wanna do in, in retirement?

167

Are they gonna completely

change the rules?

168

And everything that we've been working

within, the parameters that we've

169

been working within for the last

ten, fifteen, twenty years, are we

170

gonna wake up one budget night and

it's gonna be completely different?"

171

And it's a difficult conversation to be

having and a disappointing conversation

172

to be having 'cause I think the last

thing we wanna be trying to do is dampen

173

a small business owner's enthusiasm for

the growth and expansion and building

174

their business to be able to provide

for their family and to be able to do

175

the things they wanna do down the track.

176

You know, they're-- the small

business owners are the ones

177

that are really having a go.

178

They're taking the risk.

179

They're worrying about all the

things that they have in their

180

business, cash flow, profitability,

employing people, looking after

181

their customers, all of those things.

182

To then have them wondering whether

it's even worth it, I think that was…

183

I found that really disappointing.

184

Anthony Perl: Yeah, and I suppose

that's the hard part here, isn't it?

185

Because you've got the going from

expectation that it would continue on same

186

as, you've got the surprise element, and

then you've got the unknown of what is it

187

going to actually look like in the future,

assuming it changes, and that's the other

188

part of the unknown is we're making an

assumption that this is now going to

189

be in place for some period of time.

190

And of course, we probably get a sense

that if the government were to change

191

in the next election, and let's forget

the fact as to whether that's possible

192

or not or likely or not, is that if it

did change, the likelihood is it, all

193

of this would be potentially reversed.

194

David Patterson: Well,

that's exactly right.

195

There'd be a real possibility that some

of the bigger changes in the budget would

196

get reversed under a different government.

197

So you're playing here within, I

guess, two-year timeframe of these

198

new rules, and so we have to make

changes, we have to implement

199

different strategies to cater for that.

200

Is it a short-term thing?

201

In two years' time, whenever the next

federal election is, are we gonna revert

202

back to the old ways, and what does that

do to the decisions that you make now?

203

You know, is that gonna, uh, be a

detrimental impact on those decisions

204

if there is a change of government?

205

So it's becomes just a minefield,

which I don't think we needed.

206

I'm sure there are other ways that they

could've done what they did to not impact

207

small business as much as what it has.

208

Anthony Perl: So when it comes to dealing

with people and small businesses in

209

particular, where they've got a mindset

of, "Well, I don't know if this is worth

210

it or not," how do you make an assessment

as to looking properly at the numbers and

211

go Well, is there another way around this?

212

Is it worth it, or is it

just, "No, you know what?

213

I'm gonna support you in,

'Okay, you've had enough.

214

Tipping point.

215

Let's try and move to

another circumstance.'"

216

David Patterson: Yeah.

217

I think it, it really does become a

case by case on each of the clients.

218

But the main part of that is to

not overreact, but not react too

219

quickly and make changes too quickly.

220

Because one of the benefits that we

do have is we have this 12-year period

221

where some of these changes aren't gonna

come into place until July next year.

222

So we have a little bit of time just to

let the dust settle and see where things

223

sit, and it gives us an opportunity

to review a person's business, review

224

where it's at, how it's performing,

how it could potentially perform under

225

the new rules and the new changes,

and gives us the time to be able to

226

make our own tweaks to how things are

operating to try and get the most out of

227

any new changes that are coming along.

228

So I think it's mainly about trying

to just calm it down a little bit and

229

get people just to stop and have a…

230

take a breath and see where things lie.

231

But it could create the opportunity for

someone who's getting towards the end

232

of their business life to say, "Okay,

well, I'm gonna bring the sale of my

233

business forward a year, two, three years.

234

I've had a look.

235

I don't wanna go on beyond next year."

236

Gives us an opportunity to sell now.

237

So it's just a matter of sort of

taking that step back, analyzing

238

where everything's at, and then

making a decision based on all the

239

information, not just sort of a spur

of the moment decision based off of

240

the disappointment of what happened.

241

Anthony Perl: The interesting outcome

of that is does it create a whole

242

lot of indecision in the market?

243

David Patterson: Oh, it definitely

creates indecision because

244

there's selling of houses for one.

245

You know, do I sell now?

246

Do I hold?

247

Do I wait?

248

Same with a business.

249

Do I sell?

250

Do I wait?

251

Which way to go?

252

And that makes it hard.

253

And even whilst you can say, let's

just wait and see what happens over the

254

next few months and see how it settles

down, people are still anxious because,

255

I mean, for some people, this is a

business that they've been in and grown

256

and, and worked in for 15, 20, 30 years.

257

You know, it's kind of like an

extended part of their family.

258

So all of a sudden, something they've been

working on, working towards these goals-

259

They're just worried that everything's

gonna change, and all those years of

260

hard work are gonna be ripped out and

they're not gonna get the benefits.

261

So it does create anxiety amongst

business owners, absolutely.

262

Anthony Perl: Do you see it as a role

that you need to play in being a bit of

263

a mindset coach as part of this process?

264

David Patterson: Oh, 100%.

265

It certainly adds that bit into the

whole thing definitely because the

266

negativity that we've got created from

that budget night and the decisions and

267

the announcements that were made, that's

a hard thing to try and turn around.

268

And from my perspective as well, I'm

running my own small business, so I've

269

got my own thoughts and processes going on

about how I'm running my business and what

270

I need to do and all that kind of thing.

271

But to be able to, I guess, to

some degree, put that to one side

272

and, and to be able to focus on

clients' business and decisions.

273

But I think the other thing that it

had, did do as well is that clients,

274

my clients also understood that I

was effectively in the same boat.

275

You know, we're all in the same

boat as far as what's happening.

276

But it's another opportunity

to create that positive mindset

277

on how things are happening and

looking at it and going, "Okay.

278

Well, what can we do?

279

What can we change to make the most of

the change that are gonna come through?"

280

Anthony Perl: And do you see there

being a better future for some

281

of the small businesses that are

prepared to take hold of some of the

282

opportunities that are now in front

of them as a result of all of this?

283

Is the positivity that you can look at,

that it's going to enforce a stricter

284

monitoring of cashflow, of putting

things in different places, of where you

285

put your investments and what you do?

286

Is it going to be a lot more process

driven as a result of this and therefore

287

through a bit of a hiccup, there might

be a stronger outcome in the end?

288

David Patterson: I'm not so

sure about a stronger outcome.

289

I think it'll be a different outcome

that could still be just as beneficial as

290

before playing in the rules that we had.

291

So I think it's just a matter of

assessing where your business is at.

292

And the more you can concentrate on

the strengths of your business and

293

trying to grow your business and, and

making it as profitable and as cashflow

294

positive as you can, get those elements

right, and then we can work around any

295

of the tax changes that have come into

place or any of the future tax changes

296

that'll be in years to come, you know?

297

I think as long as we're focusing on

the right areas of small business,

298

the outcome will still be good.

299

It'll be probably different in, in

how we get to it, but I think we can

300

still make it a positive and a good

outcome for small business owners.

301

Anthony Perl: Just to wrap up this

discussion, David, I think it's important

302

to talk to the idea that when it comes

to mindset and looking at all of this

303

and the implications of changes that

happen and this budget and changes that

304

might happen in the future, at the end

of the day, it all centers around whether

305

you love what you're doing, doesn't it?

306

I mean, if you really love

what you do as a business, then

307

you're going to find a way.

308

David Patterson: 100%.

309

You're right.

310

If you're in a business that you

love and you love working on, you

311

love getting there every morning

and making it as successful as you

312

can, then you won't give up on it.

313

You'll sit back, and again, like

I said, once you kind of, the dust

314

settles and you can see what the

playing field's like, you'll find ways

315

to continue to make it successful.

316

So I think you're right.

317

Those that are in a business

that they have less passion about

318

will find it harder to keep going

through these changes, definitely.

319

And maybe, you know, some of

these changes might create a great

320

opportunity for people to make a

change into something different or

321

a different version or whatever.

322

You know, that could turn out to be

a positive at the end of the day.

323

Anthony Perl: Well, that's all we have

time for on today's episode of The Bucket

324

List Accountant, where David discussed the

bizarre secrecy of the recent budget and

325

its impact on small business confidence.

326

We've put together a downloadable

episode workbook, which you can find

327

via the link on the show notes to help

you assess your business strategy.

328

Next time on The Bucket List Accountant,

David explains how having the right

329

business structures and a dedicated travel

budget allowed him to leave his laptop

330

behind, go on a last-minute trip with

friends, and be fully present, proving

331

that with the right planning, you can say

yes to life's unexpected opportunities.

332

Connect with David Paterson on LinkedIn

or visit bucketlistaccountant.com.au

333

to learn more about aligning your

finances with your life goals.

334

This podcast is produced by my

team at podcastdoneforyou.com.au,

335

helping professionals share

their expertise through

336

powerful podcast content.

337

If you found value in today's episode,

wherever you're tuning in, please

338

like, share, comment and subscribe

so you never miss an episode.

339

I'm Anthony Perl, and until next time,

keep making your bucket list happen.