Markets 
Treasurer Jim Chalmers has made another tweak to fix the fallout from Labor’s budget tax rises, but a leading business group says the revised reforms remains harmful and sap confidence across the economy.
The government moved on Friday to address concerns from a range of influential businesspeople and some Labor figures that Labor’s new inflation-adjusted model for taxing capital gains could hurt fast-growing new businesses and worsen Australia’s productivity and investment.
Under the changes, companies operating for up to 15 years will be able to qualify for a CGT concession, up from 10 years, while investors will need to hold eligible shares for three years, down from five. The concession will also no longer be capped. And a research and development refund scheme for biotech firms will be accessible for 15 years, up from 10.
Tech Council of Australia chief executive Kate Cornick said the changes would “help ensure the risks that founders, talent and investors take to build and back early-stage companies are rewarded.”
“As a nation we have a lot of catching up to do on R&D, and the proposed [changes] … are a solid step toward getting us back on track.”
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the overhaul did not alter the overall impact of Labor’s tax package on businesses.
“We are almost four months on from the federal budget and the policy settings continue to move on a day-by-day basis, this is eroding confidence across the economy,” he said.
A media release from Chalmers’ office said the changes were “all about supporting small businesses and start-ups, including in the biotechnology and medical technology sectors. These reforms will deliver more innovation, encourage more entrepreneurship and deliver certainty for investors.”
Shadow treasurer Tim Wilson said Chalmers had been “forced by the prime minister into his fourth humiliating backdown over his budget”.
“The backdown is welcome, but it is embarrassing that certainty and confidence has been jeopardised for so many businesses because we have an out-of-his-depth treasurer.”
In the May budget, Labor scrapped negative gearing on existing properties and created new rules to stop tax minimisation by using trusts. It also moved from a flat 50 per cent CGT discount to an inflation adjusted model that could lead to lower taxes for investors in low-growth, high-dividend blue-chip shares but higher taxes on quicker growing firms that create dynamism.
Labor promised before the last election it would not pursue such policies, but said it changed its position due to the urgency of solving the housing crisis. House prices have continued their pre-budget tumble due to a combination of high-interest rates and the tax changes.
Labor has already walked back a tax on trusts that the Coalition weaponised into a “death tax” scare campaign, got rid of a tax that would have penalised people whose spouses died, and backtracked on elements of a new minimum tax on trusts.
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Paul Sakkal is Chief Political Correspondent. He previously covered Victorian politics and won a Walkley award and the 2025 Press Gallery Journalist of the Year. Contact him securely on Signal @paulsakkal.14.Connect via X or email.From our partners
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