An Australian entrepreneur has warned of a potential “exodus of talent” over Labor’s proposed tax changes – which he said could incentivise business-focused locals to look for better opportunities abroad.
Labor has proposed axing the 50 per cent capital gains tax discount and introducing an inflation-adjusted model with a minimum tax rate of 30 per cent from July 1 next year.
The CGT reforms are part of a tax package, which also includes changes to negative gearing on properties, being scrutinised in a Senate inquiry this week.
Weighing in on the national tax debate, sparked by this year’s federal budget, Kogan.com founder and CEO Ruslan Kogan expressed serious concerns over the reforms’ potential effects on migration.
Mr Kogan told Sky News host Caroline Marcus he thought business leaders “in general are having lots of discussions with entrepreneurs” regarding the changes.
“They’ve had a career talking to people who are deciding whether they stay in one form of a job or whether they have a crack at a business and how hard they should work and what they should do and what should build,” he said.
“So, they’re people who are essentially at the forefront of talking to the builders in the country and I think they’re scared, I think that they’re seeing the writing on the wall.”
Mr Kogan said he agreed with the sentiment Australia was the “best country in the world”, but warned the such reforms could result in many Aussies, particularly working immigrants, looking for opportunities overseas.
“If we keep changing these policies… we may be having an exodus of talent, which we’ve seen all over the world,” he said.
“When you also correlate that with the fact that when you look at any of the business lists, there’s a lot of immigrants on them because they’re a highly predetermined group of people who are willing to drop everything they’ve got and take massive risks to build a better life for their families.
“So you go, all right, the people who do this building, the people that create businesses, the people that create jobs and opportunities and move our economy forward are also the sort of people that are highly predisposed to taking risks.
“If one place is telling them: ‘You know what, we don’t really value that sort of input, we don’t really value your hard work or the people that you employ or the risks that you take’… it’s not outside the realm of possibilities that those people will pack up shop and leave.”
His comments echoed a clip Mr Kogan posted to social media last Thursday regarding the proposed CGT changes, which had been viewed nearly nine million times as of Monday night.
“When they talk about saying that: ‘Alright, we’re going to massively increase the taxes and CGT’, you are incentivising the wrong the message. You’re not saying: ‘Hey, take a risk, come here, have a crack’,” he said in the clip.
“The Aussie culture has been all about working hard, taking risks, having a crack, and you’re going to be incentivising the wrong sort of people to come here.”