Young business leaders lobby Anthony Albanese to rethink CGT revamp
Young business leaders have banded together to lobby Anthony Albanese to rethink his capital gains tax fix, as reform campaigner Allegra Spending urged Labor to tread cautiously to avoid economic distress and the Coalition launched a campaign to draw family businesses into tax wars.
In a letter to the Prime Minister, 40 Australian founders under the age of 40 said they support the government’s decision to remove CGT relief and negative practices to make homes more affordable. But they warned against removing the deduction from productive asset investments.
“The changes… will do nothing to make homes more affordable; all they will accomplish is suck the ambition, drive and hope from the hearts of young business founders,” the group writes.
“This passion trap doesn’t just affect tech start-ups: it affects every business growing in Australia. So it affects every small business that wants to be a mid-sized business, and every mid-sized business that wants to be a big business.”
“That couldn’t be the plan, could it?”
The group included Sarah Warmoll and Samantha Devlin, whose firm provides career counseling at many schools; Kim Teo, founder of QR code menu provider; Damien Fitzpatrick, a former rugby player for the NSW Waratahs who founded a sports nutrition company; Jack Watts, who founded marketing and communications agency Bastion; and Frank Greeff, who sold his real estate business to Domain for $180 million and made the first content to become a social media video genre mocking the CGT changes.
There is some unease at the Labor Party’s convention about the public response from some sections of the business community and mom-and-pop small businessmen. This concern dampens what MPs believe has been a largely positive response to the reduction of negative gearing and CGT changes for housing.
Finance Minister Jim Chalmers stepped forward after the review on Tuesday, citing what he described as “misinformation” after days of questions about a potential 47 percent tax rate on real capital gains for some firms.
A developing social media campaign has featured an AI-generated Albanian as a joint business partner at firms that hand over almost half of their profits; but the new framework only taxes real earnings, not nominal earnings.
“The resulting distortion in the capital gains tax system has more than compensated for fixed housing investments or even equities in some cases,” Chalmers told reporters in Sydney.
“By introducing this more neutral treatment, some types of investments will become more attractive than housing.”
Shadow treasurer Tim Wilson will describe the budget as a “bad” one focused on “revenue without reform” in a speech to the National Press Club on Wednesday.
In an attempt to generate energy among Australia’s 2.7 million small business owners, Wilson will promise a new small business bill that will ensure small businesses get paid on time, contribute to the decision-making processes of institutions such as the RBA and give them the chance to bid for government jobs.
Non-union-based Coalition parties have traditionally relied on the self-employed for support.
“Where the Albanian government declares war on the self-starters and small businesses of this nation, we will fight for them,” he will say, according to speech notes.
“We are rediscovering our fighting spirit; a self-starting nation where we aspire, innovate, invest in our future, look to the horizon and live the Boxing Kangaroo spirit.”
Spending, an independent MP for the affluent Sydney electorate of Wentworth, said he supported negative gearing and CGT changes to fund income tax cuts. “But,” he added, “there is significant work for the government to do to get the structure and parameters right to avoid some of the problems highlighted.
“Tax reform is difficult. It needs to balance welfare and fairness and get the balance right. The government must consult widely – it does [doing so] It needs to go further with the tech sector and with business owners, fund managers and the wider community. “It will be evaluated not by the rapid delivery of these measures, but by establishing the balance correctly.”
Chalmers acknowledged that high-risk, fast-growing new firms could face higher taxes.
The government is talking to the start-up sector about a possible exemption. But a narrow division does not address broader concerns voiced by influential figures such as Labor adviser Lachlan Harris, Seek founder Paul Bassat and activist investor John Wylie. They say the CGT changes will harm businesses of all kinds, from defense firms to pharmacies and plumbers, and hinder the dynamism seen as key to boosting national income.
Under pressure to announce tax changes, the government published the Treasury’s advice on Monday afternoon that the average tax rate on capital gains would rise from 19.3 per cent to 21.5 per cent. He stated that investments in the economy will not change significantly.
Critics worry that under the inflation-adjusted model, younger investors who often take bigger risks on fast-growing assets to get ahead would face a higher tax burden. On the other hand, retirees who invest in dividend-paying, low-growth assets, such as large bank stocks, will benefit because the new model favors assets that grow at about the same rate of inflation.
The Treasury advice also explained why the government decided against restricting CGT relief reforms to housing. He said investors could effectively “access CGT relief on an investment property by, for example, purchasing it through a company”.
Countries such as the UK and Canada have plans to reduce tax on start-ups, recognizing that certain investments should be taxed less to stimulate growth.
Albanese hinted at changes to start-ups on Tuesday. “It was not possible to have as much consultation before budget night as there was on tax policy,” he said in Perth. “And we’re using this period of this week and next week to do that consultation.”
National leader Matt Canavan said Labor needed to talk to the farming sector about regulation because young farmers, like start-ups, were taking big risks.
“The government’s capital gains tax changes are a handbrake on anyone who wants to grow their business and therefore a handbrake on our economy, our productivity and our growth,” 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.
