Anthony Albanese admits tax reform may hit businesses beyond tech
As Prime Minister Anthony Albanese rushed his tax policy package through parliament to persuade Opposition Leader Angus Taylor to oppose the tax cut, he admitted the capital gains tax overhaul could affect a wider range of firms beyond new tech start-ups.
Anger flared at question time as Labor MPs complained about mixed public messaging after this month’s budget. Albanese passionately championed the cause of removing tax concessions to increase home ownership and warned Taylor that his hardline stance against Labour’s policies would lead to him being replaced by Liberal MP Andrew Hastie.
The government plans to pass the bill without a normal committee inquiry into the changes, and Albanese said any details could be put into law at a later date after consultation.
Facing criticism from big business, young entrepreneurs and economists that Labor’s budget would undermine productivity, Albanese, Chancellor of the Exchequer Jim Chalmers and Industry Minister Tim Ayres repeatedly said last week they would consult tech firms and the “start-up industry” on any unintended consequences.
But when asked about a narrow spread for tech start-ups, Albanese said on budget night that “that’s not what we said”, although budget documents said the “technology and start-up sector” would be consulted on the CGT changes.
Albanese softened his tone when talking about his tax agenda on Monday. Rather than condemning critics, Albanese promised to consult a wider group of businesses, including the largest small business associations, and not just innovators seen as fitting the definition of a start-up.
“We specifically said on budget night that we would go there and consult on the details, including interaction with the quite complex tax system,” Albanese said.
Albanese rejected calls from the opposition and turquoise independents for an investigation into the decision to replace the 50 per cent CGT discount with an inflation-adjusted model in a bid to pressure the opposition.
Instead he confirmed he would extend the bill until the end of June. The bill will include new limits on negative gearing, CGT changes (both opposed by the Coalition) and separate measures to provide workers with a $250 tax offset and a $1,000 standard deduction.
Bringing all tax policies together forces the Coalition to vote on all measures at once. If the opposition votes against the bill in its entirety, Labor will be able to say it opposes the Coalition’s tax cuts, as it did before the last election.
Teal MPs Allegra Spend and Zali Steggall met on Monday to highlight the potential economic consequences of Labour’s CGT changes, which they say trap small businesses.
UNSW economist Richard Holden argued in research published on Sunday that the new inflation-adjusted model for taxing capital gains could inadvertently penalize faster-growing businesses, describing it as a “productivity tax”. Holden said not only technology companies, but also ordinary companies such as industrial cleaners could be hit hard if they grow above inflation.
The government privately says Holden’s analysis is selective. Treasury modeling published by Labor last week suggested the CGT change would only increase the tax rate on earnings from 19.3 per cent to 21.5 per cent over the next decade, which would not significantly impact investment.
“We need to find a way that rewards innovation and risk,” said Spending, who last week said he had underestimated the impact of extending CGT changes to assets other than investment properties.
“I’m really calling on the government to take a breath. They’re saying they want to introduce legislation this Thursday… I think that’s the wrong idea.”
Albanese does not want an investigation into the tax bill, which the Coalition could use to keep controversial changes in the headlines. The coalition needs the Greens to launch an investigation. The small party has stated that it will vote for the bill, although it has not yet reached a final decision.
The Prime Minister suggested on Monday that the government would amend the tax bill after June if consultations on CGT changes produce a solution.
“This is the normal way tax policy has been implemented for a long time,” he said.
Some Labor MPs returning to Canberra on Monday said they were not overly alarmed by public anger over the budget, but were concerned Labor’s framing of “generational inequality” was being overshadowed by criticism and questions about the details.
“Our communication was not good,” one lawmaker said. Another noted that it was unusual for a minister outside the treasury portfolio, Andrew Charlton, assistant secretary for the digital economy, to seemingly lead the government’s communications on tax measures over the weekend.
Albanese said during questioning: “Maybe [Taylor] I might want to speak to the next leader of the Liberal Party, who said: I regularly feel the anger, the angry rage, the frustration of young Australians who feel excluded from the housing market, as well as a sense of despair that they can’t get a piece of the country, that they can’t buy a home again.
“Good advice [Hastie]. You might want to watch him right behind you.”
Taylor said earlier on Monday that Labor’s policies “need an axe, not cuts”.
“We must see them go because in this country it is a war against ambition, a war against desires,” he said. “We will fight this law through parliament to the end, and if the law passes parliament, we will repeal it when we win the election. This is our promise to small business owners.”
Business Council chief executive Bran Black said the CGT changes “make an already uncompetitive tax system less competitive at a time when Australia is struggling hard to attract investment”.
“If the government is making progress, a proper consultation process, including a parliamentary inquiry, is the next step,” he said.
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Paul Sakkal is the Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
