April closed with three pieces of news that every small business owner should sit with for a moment: an inflation print that surprised on the high side, the ATO’s annual list of what it will be watching at tax time and a sobering report on business failures. Here is the April wrap and what it means for your business.
Inflation is back at 4.6%
On 29 April 2026 the ABS released the March quarter Consumer Price Index. Headline inflation came in at 4.6% annually, the highest reading since September 2023, with prices up 1.4% for the quarter alone. The trimmed mean, which strips out the most volatile movements, sat at 3.3%.
The biggest contributors were housing, up 6.5%, and transport, up 8.9%, with the transport number driven by fuel costs flowing from the Middle East energy shock. The full breakdown is in the ABS release.
The cash rate currently sits at 4.10% after increases in February and March. The next RBA decision is due on 5 May. We will not guess at the outcome, but a 4.6% headline number five days before a rate meeting is not a comfortable backdrop for anyone carrying business debt.
The ATO’s tax time 2026 focus areas
In late April the ATO announced its focus areas for tax time 2026. Two are familiar. The first is work-related deductions, where the ATO points taxpayers back to the three golden rules: you spent the money yourself and were not reimbursed, the expense directly relates to earning your income and you have a record to prove it. The second is omitted income, covering side hustles, cash jobs, interest, dividends and rental income.
The third is new. For the first time, the ATO has warned taxpayers about relying on AI-generated tax advice and so-called finfluencers. Assistant Commissioner Anita Challen said AI “draws from a broad and inconsistent range of sources, which can lead to inaccurate advice”. Treat a chatbot’s tax tips the way you would treat advice from a stranger at a barbecue: interesting, possibly right, but not something to lodge a return on.
One housekeeping note for those working from home: the fixed rate is 70 cents per hour and it still requires records of your actual hours.
A cash-flow warning worth taking seriously
The third thread is the hardest reading. CreditorWatch’s special Business Risk Index report, published on 1 April 2026 and framed around the energy shock pushing Australia into a high-risk phase, found business failures and B2B payment defaults at or near record highs since mid-2025.
The sector numbers are stark. Road freight is closing at an annual rate of 7.1%. Construction’s failure rate sits at 5.8%. Manufacturing’s 60-day payment arrears are up 9.4% year on year. The report identifies SMEs and sole traders as the most exposed. The full report is on the CreditorWatch site.
The practical takeaway: your customers’ ability to pay you is now a live risk, not a background assumption. If a debtor is stretching from 30 days to 60, that is a signal, not an inconvenience.
What to do with all of this
- Review your pricing and margins against 4.6% inflation. If your prices have not moved since last year, your margin has.
- Tighten debtor management. Invoice promptly, chase early and watch payment terms creeping out.
- Keep your records clean ahead of tax time, especially for work-related deductions and any income outside the main business.
- Be sceptical of AI-generated tax tips and check anything material with a registered tax agent before acting on it.
Before you act
This article is general information only and is not tax or financial advice. Figures are drawn from the ABS, the ATO and CreditorWatch as published in April 2026. Confirm anything that affects your tax position with a registered tax agent before acting.