Young investors and entrepreneurs have shattered Labor’s spin that its tax changes are good for younger Australians.
The government scrapped the 50 per cent capital gains tax discount to introduce cost-base indexation and a 30 per cent minimum tax rate, a measure young business owners say will disincentivise investment.
The Lad Collective co-founder and CEO Bill Ovenden said the changes were a “kick in the guts” for young Australians, the very people the government claimed its budget would help.
Ovenden’s bedding company, which is Australian owned and sells globally, is an example of the Australian small business story, but he said the new tax changes “makes that story harder to sell”.
“We want to be on a million beds by 2028 but this certainly makes it a lot harder for us to achieve that,” he told Sky News host Laura Jayes.
“I think these new reforms are basically going to lead us to be hamstrung in many ways, like in terms of looking at the exit point or liquidity event that will help us.
“We are scrambling to get advice on these reforms. I mean it’s OK for Canva and Atlassian. I mean sure, they feel it, but they’ve also got armies of accountants and tax lawyers.
“They’ll find a way. The people who can’t find a way are the ones who built something from nothing, a small brand, a product that they believe in, years of grinding.”
The government said its budget would address intergenerational inequity, but the changes to CGT and negative gearing were grandfathered.
This cements the favourable conditions for older Australians and those benefiting from the old scheme.
Younger Australians are also more likely to invest in shares to build wealth and save for a deposit on a home.
Realbase co-founder Frank Greeff said the changes would likely drive entrepreneurial Australians overseas to take advantage of better tax conditions, something that he said “breaks my heart”.
“I cannot express to you how many people have reached out to me to say, ‘hey, Frank, what is the right next move for me? What country should I go to?'” he told Sky News on Tuesday.
“Just this morning, I was in a WhatsApp group chat with a founder who employs a thousand people in Australia, and he’s saying, hey I’m in the US right now. We should move to the US.
“It’s because we already had some things that the other countries didn’t have, like a concentration of talent and things like that.
“I just worry that this is going to tip it over the edge and the whole ecosystem that’s been starting to build is going to go away.”
Mr Ovenden said he would consider moving his business overseas.
He said his bedding company had laid “incredible foundations” in the US and praised its pro-business outlook.
While he and his brother want to keep the company in Australia, he said he would not be surprised if they were driven out through adverse tax settings.
“It is just a real possibility that we get frozen out of our own country in terms of the feasibility of operating here,” Mr Ovenden said.
Ahead of the 2025 election, Prime Minister Anthony Albanese repeatedly ruled out any changes to negative gearing and capital gains tax arrangements.
In April 2025, Mr Albanese ruled out changes to negative gearing or CGT, saying: “Yeah, it’s off the table”.
He reinforced that position in May 2025, telling Sky News: “The proof’s in the pudding. If we were going to make changes, then why haven’t we?”
However, in the first federal budget since, the government has completely reversed its position without taking the changes to voters at an election.