RLO exemption extended as fuel pressures mount

Originally introduced during the COVID-19 pandemic to stimulate lending to the small-to-medium enterprise (SME) sector, the exemption allows businesses to access loans without being assessed against standard responsible lending obligations, provided there is a genuine business purpose.

It applies to eligible businesses, those with fewer than 100 employees or annual revenue of $5 million or less.

The exemption was set to finish in October 2026.

Announcing the extension, Treasurer Jim Chalmers said the move would improve access to finance while reducing regulatory friction.

“We will help small businesses access easier and faster credit by extending the Small Business Responsible Lending Obligation exemption for a further 10 years,” Chalmers said.

“This will ensure small businesses aren’t slugged with additional regulatory burdens and delays when accessing loans.”

The extension comes as SMEs continue to navigate a challenging operating environment, marked by persistent inflation, regulatory changes and escalating fuel costs linked to geopolitical tensions in the Middle East.

Recent data from CreditorWatch indicates rising insolvency risks across multiple SME sectors, highlighting the mounting pressure on business cash flows.

“Australia’s SMEs are facing one of the most challenging operating environments we’ve seen in years, with cost pressures, interest rates and global volatility all converging at once,” said chief executive Patrick Coghlan.

Tax relief

Alongside the lending changes, the Albanese government has introduced targeted tax relief measures aimed at improving SME resilience.

The Australian Taxation Office (ATO) will offer temporary relief to businesses struggling to meet tax obligations due to fuel supply disruptions.

Support will include “more generous payment plans, remission of interest and penalties, and support in varying PAYG instalments where there has been a downturn in taxable income," according to the Treasurer.

Chalmers said the ATO would also streamline access to these provisions.

“The ATO will establish a dedicated channel that businesses can use to access these relief provisions, or they can contact their registered tax professional to request access on their behalf."

He added: “These are common-sense steps that recognise and respond to the extraordinary circumstances we find ourselves in.”

Prime Minister Anthony Albanese also announced on Monday (30 March) that the government will halve the fuel excise on petrol and diesel for three months.

The halving of the fuel excise will reduce the cost of fuel by 26.3 cents per litre. This will reduce the cost of a 65L tank of fuel by nearly $19.

He commented: "The spike in fuel prices as a result of the war in the Middle East is hurting Australians and causing financial stress. This will help to provide some relief.

"The halving of the fuel excise will commence from April 1 and run to 30 June.

"Further, the Albanese Government will reduce the Heavy Vehicle Road User Charge to zero for three months to help truckies continue their vital work for our nation. The Government will also defer the next scheduled increase in the Heavy Vehicle Road User Charge by six months."

Payments system reform

Additionally, on Tuesday (31 March), the Reserve Bank of Australia (RBA) announced a series of payments system reforms aimed at reducing costs for both consumers and businesses.

Key among these is the removal of surcharges on debit and credit card transactions from 1 October 2026, a change expected to save consumers approximately $1.6 billion annually and businesses around $200 million.

The RBA also introduced reforms to decrease interchange fee caps for Australian companies. These changes specifically target small businesses, which are presently paying the highest fee rates. These reforms are forecast to save businesses $910 million a year in transaction fees.

New caps on interchange fees for foreign card payments will also be introduced.

Following the announcement of the reforms on Tuesday 31 March, RBA governor Michelle Bullock said that surcharging was “no longer working as intended.”

"Consumers and businesses find the rules complex and confusing, surcharges are often not well disclosed, and most consumers want surcharging to stop," she said.

Banks step up support

The banking sector has also moved to support customers facing financial strain, with lenders rolling out targeted assistance measures.

Australian Banking Association (ABA) chief executive Simon Birmingham encouraged businesses to proactively engage with their lenders.

“Banks know many of their customers are making tough financial decisions right now as a result of interest rate increases, the rising cost of fuel, and supply chain disruptions,” Birmingham said.

“Our message to all customers is that you don’t have to tough it out on your own – contact your bank.

“Australia’s banks have specialist teams ready to support small businesses, farmers and communities across the country struggling with cost pressures, or supply chain disruptions as a result of global conflict.

“The best support for customers will differ from case to case, which is why it’s important to contact your bank early.”

According to the ABA, available support measures may include temporary repayment deferrals, interest-only periods, loan restructuring, and increased access to credit.

National Australia Bank (NAB) said it has already taken a proactive approach, with business bankers contacting nearly 200,000 customers since early March to discuss fuel-related impacts and financing options.

The lender noted particular focus on fuel-sensitive sectors such as logistics, freight, agriculture and regional enterprises.

While cost pressures remain elevated, NAB indicated that most customers contacted are not currently seeking hardship assistance.

NAB business care executive Olivia Brosca said smaller operators remain the most exposed.

“Those with well-established infrastructure and storage are better placed, but the real pressure is on smaller businesses who haven’t been able to build that buffer,” Brosca said.

“Our role isn’t to tell businesses what decisions to make – it’s to understand the cash flow impact and work through practical options together.”

[Related: Brokers urged to adopt ABC client strategy]

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