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Young business leaders have argued the prime minister and treasurer are stifling innovation. Matt Davidson<\/p>\n
When Labor handed down the most risky and high-taxing budget in more than a decade, its selling point was about levelling the playing field<\/a> for young Australians. The package of tax changes would eliminate negative gearing for future investors in existing properties while overhauling the capital gains tax discount.<\/p>\n But the CGT changes were not limited to property \u2013 they would affect stocks and other assets, including businesses. The most cut-through criticism is now coming from Millennial company founders who fear they will be stung and short-changed as soon as they start getting ahead.<\/p>\n Their meme campaign, which features AI-generated images of Anthony Albanese playing the role of their slack business partner, has gone viral among small businesses, whose owners are now delivering that feedback to Labor MPs.<\/p>\n The prime minister has two options. He can offer extra concessions, in line with his habit of seeking consensus and limiting blowback under pressure. Or he can plough ahead, demonstrating a new crash-through style where he will use his power early in the political term to create enemies in the name of making big changes.<\/p>\n The early verdict on last Tuesday\u2019s budget, as polls results trickled in on Sunday night, was conclusive: voters didn\u2019t like it.<\/p>\n Related Article It was the worst-received budget<\/a> since this masthead\u2019s Resolve poll started tracking sentiment five years ago. More than a third of those surveyed said they had a dimmer view of Labor and their own household would be worse off. Newspoll\u2019s result showed it was the least popular budget since 1993.<\/p>\n That was not unexpected, Treasurer Jim Chalmers told the 7am podcast on Thursday. \u201cI think it\u2019s important to acknowledge that when you\u2019re making a significant change \u2013 a controversial change \u2013 to the tax system, then obviously not everybody is going to be supportive of that,\u201d he said.<\/p>\n \u201cIn the midst of a pretty full-on scare campaign, in the midst of a big global oil shock which is putting extra pressure on people, and in a budget which is full of hard decisions rather than handouts, I think that that kind of reaction is not especially surprising.<\/p>\n \u201cOur job is to try and do the right thing for the right reasons, even if it means paying a short-term political cost in the polls.\u201d<\/p>\n<\/p>\n There was a surprise, however, in the scale of backlash from start-ups and small business.<\/p>\n Related Article While former Labor leader Bill Shorten\u2019s tax packages had featured a 25 per cent flat capital gains discount \u2013 half the Howard-era 50 per cent discount \u2013 the Albanese government reverted to the inflation-adjusted model introduced by Paul Keating<\/a>. This assesses how much an asset has grown in real terms, after inflation, and applies a minimum 30 per cent tax rate only to capital gains made on top.<\/p>\n Chalmers and Albanese say the scheme brings tax rates on assets into line with wages, although some members of cabinet struggle to explain privately why that specific design was chosen. Others familiar with the decision-making said there were harried conversations about unintended consequences of the indexation model in the final stages before the budget.<\/p>\n One of those consequences quickly became clear: for businesses that start from nearly nothing, there\u2019s no base to index, so there\u2019s no discount.<\/p>\n It was unclear that Labor would include all asset classes in its CGT overhaul. While a public conversation about housing had been running for years, and leaks about property tax emerged months before the budget, the decision to expand CGT changes to shares, cryptocurrency and other investments was made later in the piece \u2013 about mid-April.<\/p>\n So when last Tuesday\u2019s budget papers were published, company founders whose businesses were roped into the changes felt ambushed.<\/p>\n It started, as many cut-through moments in politics these days do, with a meme.<\/p>\n Fintech entrepreneur Julian Fayad, the founder of LoanOptions.ai, watched last Tuesday\u2019s budget and came out feeling deflated. \u201cThis was the most surface budget tax grab for small business,\u201d he says. \u201cThe government said it\u2019s in the interest of intergenerational equity, but they grandfathered all the Boomers. It\u2019s not a knock on Boomers, it\u2019s a knock on the government.\u201d<\/p>\n Still reeling on Wednesday, Fayad shared those feelings in a meeting scheduled with Frank and Jacques Greeff, brothers who are also start-up founders.<\/p>\n Fayad told them he\u2019d had an idea for a meme, which his head of content was working on, in which he would introduce Albanese as his \u201cnew cofounder\u201d about to take on 47 per cent of the company. (That 47 per cent figure was a reference to the top marginal tax rate, which founders whose companies started from a low base could be required to pay in tax upon a company sale, public float or share sale.) The Greeff brothers laughed, saying they\u2019d jump on board with their own content as well, and encourage other businesses to do the same.<\/p>\n Related Article They each posted Instagram carousels featuring an AI-Albanese. Tongue-in cheek-but still scathing, they introduced the prime minister as a slacker sitting at the back of team meetings on his phone while claiming almost half of business profits.<\/p>\n It caught on quickly. Most people who liked the posts shared them onwards, according to Fayad\u2019s data. Feeds were awash in AI images featuring Albanese \u2013 with varying degrees of likeness \u2013 lifting weights in their gyms, snoozing through meetings, even in the hospital delivery room.<\/p>\n \u201cThe reason it took off like wildfire was that everybody felt the same way I did: that there was nothing in this budget for young people,\u201d Fayad says.<\/p>\n They were posted alongside founders\u2019 stories of sleepless nights, deferred income, re-mortgaged homes, failed launches, lawsuits, low cashflow and staff stresses. \u201cThe reward needs to be worth the risk,\u201d wrote Vizio founder William Wang on LinkedIn. \u201cOtherwise fewer people take the risk.\u201d <\/p>\n Then the shadow treasurer, Tim Wilson, leant in. Wilson reposted Fayad\u2019s LinkedIn post, and created his own Instagram reel tagging the entrepreneur. \u201cWe didn\u2019t co-ordinate,\u201d Fayad says. \u201cI posted on my story \u2013 \u2018oh shit, the shadow treasurer just posted me on his reel\u2019 \u2013 leaning into the moment. By Thursday, his office reached out.\u201d<\/p>\n They organised a roundtable for last Sunday, when Wilson would be in Sydney, and invited other entrepreneurs. Within days, news channels, breakfast shows and newspaper front pages had all featured a cast of founders threatening to move overseas or airing their concerns.<\/p>\n Young business leaders united with an open letter<\/a>. Forty founders under age 40 said they supported the government\u2019s decision to remove tax incentives on property, but the broader capital gains changes would \u201csuck the ambition, drive and hope out of the hearts of young business builders nationwide.\u201d<\/p>\n They were backed by some of the biggest names in Australia\u2019s tech industry, who warned Labor was stifling innovation: Seek founder Paul Bassat, Canva co-founder Cliff Obrecht, Atlassian co-founder Scott Farquhar. Those who agreed span the political divide; the Coalition\u2019s concerns were echoed by former Labor adviser Lachlan Harris<\/a> and independent MP Allegra Spender.<\/p>\n It went further than them too. Small businesses, from gyms to hairdressers, plumbers, landscapers and veterinary clinics were all making memes about having to give half their business to the government, losing all incentive to innovate.<\/p>\n There was a glaring omission in the social media campaign, which Labor has described as misinformation. That is, most business owners won\u2019t be taxed 47 per cent<\/a> when they sell under the revamped CGT scheme.<\/p>\n Related Article According to tax data and treasury modelling, about 2.5 million small businesses \u2013 classified as those with less than $2 million annual turnover, or $6 million assets \u2013 will remain eligible for existing CGT exemptions and concessions. These are the vast majority of business operations in Australia.<\/p>\n Businesses with higher turnovers will be captured by the new rules, under which their overall tax rate will depend on inflation and their asset\u2019s rate of growth. Some will pay more tax than under the current system; some will pay less. It\u2019s the start-ups that deliver huge windfalls from a small base in a short period of time that will be hit hardest by the new indexation method.<\/p>\n \u201cNot all businesses are going to be taxed at 47 per cent, that\u2019s correct,\u201d Greeff said, when the question was put to him by the ABC this week. \u201cBut it said up to 47 per cent.\u201d<\/p>\n The memes sacrificed detail to go viral \u2013 barely a crime on the internet. \u201cThe truth of social media and attention is like, unfortunately, the more nuance you have, the quicker someone will scroll past and not really care about what you\u2019re saying,\u201d Greeff said.<\/p>\n Others in the start-up world have watched on sceptically.<\/p>\n If the 60-second reels and meme carousels of Instagram are where political rants go viral, LinkedIn is where founders were penning short essays and engaging in more nuanced debates.<\/p>\n Jessy Wu, a former venture capital investor who has since founded a small business, thinks the debate is playing out in a low-information environment. \u201cWealthy tech elites have skilfully co-opted the voices of small-business owners \u2013 such as plumbers and Vietnamese restaurant owners \u2013 many of whom will remain eligible for significant small-business tax concessions on asset sales,\u201d she says.<\/p>\n \u201cTech founders seem to think their blood, sweat, and tears belong in a special class, and that the fruit of their efforts should be rewarded differently. A cohort of people will end up paying more tax, that\u2019s a given. The question is, what\u2019s the fairest way to distribute Australia\u2019s tax burden?\u201d<\/p>\n Wu says the uproar is loudest among a network that is traced back to a small handful of venture capital funds whose partners have significant money on the line. \u201cWhat looks like howls of displeasure from across the whole ecosystem is in large part coming from the portfolio companies of big Australian [venture capital] funds.\u201d<\/p>\n Even within that network, views diverge. Daniel Petre, co-founder of major VC firm Airtree Ventures, was among the first to lash his peers. \u201cI\u2019m just so over rich people who\u2019ve made money complaining about tax rates,\u201d he told The Australian Financial Review. \u201cI call complete bullshit that founders or employees are saying they are going to move overseas because of tax.\u201d<\/p>\n<\/p>\n Others on LinkedIn followed. Jamie Hall, the co-founder of Lorikeet, wrote on LinkedIn that even if he got taxed at the top marginal rate, he was set to make \u201cmany millions of dollars\u201d.<\/p>\n \u201cThere are many reasons to build a start-up in the world\u2019s greatest country. The health and education systems, the climate, the coffee, the strong social safety net, the people. If it was only a matter of money and tax rates, my brothers in tech would have moved to Monaco already,\u201d he wrote.<\/p>\n Jevon Le Roux, the chief executive of Keeyu, argued the government\u2019s research and development incentives were just as important \u2013 \u201cI\u2019m not thrilled about parting with 47 per cent on an exit one day. But I\u2019m grateful the government has this program \u2026 It\u2019s keeping a lot of start-ups alive. Maybe we should talk about that instead\u201d \u2013 while Gary Donovan, who\u2019s been involved in nine start-ups without a major payout, called for his industry colleagues to \u201cpropose a solution that doesn\u2019t look like tax avoidance \u2026 and doesn\u2019t make our industry look like a bunch of entitled whingers.\u201d<\/p>\n And while Canva\u2019s co-founder joined the chorus of concern, a research engineer with the company was unimpressed: \u201cThe average person will never see millions in their life & are not sympathetic to you having to pay an extra ~$200k per million you make, god forbid,\u201d they wrote.<\/p>\n Chalmers has promised to consult on the changes. Treasury was this week talking with industry groups and business founders. Ideas being put on the table include concessions for employees who have been given stakes in the company as part of their package, averaging windfalls over a longer time period to reflect they\u2019re a one-off gain, and a flat 30 per cent rate for people selling shares in a company they had a direct role in starting.<\/p>\n While consultation was always on the cards, Labor\u2019s language has nonetheless softened throughout the week. Assistant Minister for the Digital Economy Andrew Charlton was strongest on this when he addressed the backlash on Nine\u2019s Today program on Friday morning.<\/p>\n \u201cThe point that many start-up founders, the point that many small businesses have been making is valid,\u201d he said. \u201cThere are real concerns out there \u2026 There was a statement in the budget recognising them, and we are consulting on them.\u201d<\/p>\n The government is weighing up its next moves.<\/p>\n![\"Treasurer](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/1779490091_19_530c33bbd59c43d85d2be78016ecc489ba2bbd56bccb1cd5c26686cf41583b4c.jpeg\")
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Shadow treasurer Tim Wilson during his recent address to the National Press Club.Alex Ellinghausen<\/p>\n![\"An](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/1779490093_881_dcf7612a0c2b135dd2dab441a790db62cf1eeb5d8d773d0aa218d0373884cecf.jpeg\")
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Treasurer Jim Chalmers and Prime Minister Anthony Albanese are weighing their next move. Alex Ellinghausen<\/p>\n
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