The Albanese government has been asked to “rethink” its capital gains tax overhaul as a top Australian businessman fires back at former prime minister Paul Keating’s dismissal of small business concerns.
The Albanese government has scrapped the 50 per cent CGT discount to introduce cost base indexation and a 30 per cent minimum tax rate, a measure young business owners say will disincentivise investment.
Seek co-founder Paul Bassat said while the government has insisted there were carve-outs for small businesses, incentives had to be in place to ensure young entrepreneurs were building wealth-generating enterprises.
“I think what we need is to ensure that the incentives are in place, that people around Australia, particularly younger Australians who are going to be the people who are creating jobs and creating new businesses over the next five, 10, 15 years,” he said.
“I really, really hope the government rethinks its policy.”
Mr Keating, who served as prime minister between 1991 and 1996, has dismissed concerns of business owners surrounding the CGT changes, calling Labor’s proposed amendments “structurally sound”.
“A society that fails to house its children is a society in decline – this is what Jim Chalmers and his Prime Minister are seeking to arrest,” Mr Keating said.
“Yet when Jim Chalmers announces a policy principle to restore the equity of taxing capital profits on a basis of equality with the taxation of income – we hear the howls for continuing preference.”
Mr Bassat pushed back on the former prime minister’s refusal to listen to the concerns of small business owners, insisting he “stick to the facts”.
“I think the facts are really clear. This is not going to be good for the economy. It’s not good for small business people. It’s not good for startup founders,” he said.
“It’s going to lead to jobs being destroyed, not created.
“When you’re on the right side of an argument, you stick to the facts… Let’s stick to the facts.
“I think anyone who criticises anyone personally, it suggests that they don’t have a really, really good argument to rely on.”
Mr Bassat said Australia had become one of the highest taxation jurisdictions of capital gains in the developed world.
“Singapore is zero. New Zealand is zero (and) other countries around about that 15, 20, 25 percent,” he said.
If we go to a regime where it could be up to 47 percent for some people, particularly people without a cost base, then that’s going to make us not competitive. No question about it.”
On Wednesday, the AFR revealed the Albanese government was going to restrict the CGT changes to housing, but Treasury advised to broaden the measures to all asset classes.
Mr Bassat said the news suggested there had not been “a lot consultation” with small business or startups before pushing ahead with policy which will have a “fundamental impact on job creation and incentives”.
Speaking to Sky News, Mr Bassat said “alarm bells started” when he first heard that small businesses had not been consulted.
“Young companies in Australia, whether they’re startups, whether they are small businesses, they create the jobs, this economy,” he said.
“We need as much incentive as possible for young companies to be established, business builders to go off, take risk, make personal sacrifices, create jobs, create wealth for themselves, for their family and for the country, via employment, via taxes.”
It comes after NSW Premier Chris Minns broke ranks with federal Labor by saying the current top marginal tax rate of 47 per cent – including the two per cent Medicare Levy – meant Australians were working half the week for the government.