Chalmers Signals CGT Changes as Start-ups Warn New Model Could Lift Tax to 47%
Updated
Updated · Sydney Morning Herald · May 17
Chalmers Signals CGT Changes as Start-ups Warn New Model Could Lift Tax to 47%
2 articles · Updated · Sydney Morning Herald · May 17
Jim Chalmers said Labor may adjust its new capital gains tax regime after acknowledging tech start-ups could face much higher bills under the inflation-indexed model.
A high-growth firm with a low cost base could be taxed at up to 47% under the new system, versus a current maximum 23.5%, making start-ups and venture capital the sharpest flashpoint.
Business figures including Square Peg's Paul Bassat say scrapping the 50% CGT discount for all assets will deter investment, hurt small firms and leave Australia taxing capital gains more heavily than most developed economies.
Labor argues the budget change is aimed at curbing property speculation and inequality, while some advisers say measures on R&D, venture capital, instant asset write-offs and loss carry-backs should still support start-up cash flow.
The dispute has widened into a political fight, with the Coalition branding the policy a "tax on everything" as both sides trade claims over broader tax plans and budget costs.
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Australia’s Proposed 2026–27 CGT Reforms: What Startups, Investors, and the Economy Stand to Lose or Gain
Overview
Australia's 2026–27 Federal Budget proposes major Capital Gains Tax (CGT) reforms, marking a significant tax reset that will affect the middle market, trusts, and investment activities. While the government has not yet provided detailed information or a clear rationale for these changes, the reforms are expected to be introduced with the new budget. The lack of specific exemptions for startups and growth companies has raised concerns in the tech sector, as these reforms could have a strong and immediate impact on founders, employees, and investors. The exact implementation timeline and transitional details remain unclear.