Innovative businesses could continue to use the 50 per cent capital gains tax cut under a proposal being scrutinized by Treasurer Jim Chalmers as he moves to address concerns that the Labor budget will hurt high-growth and productivity firms.
As Labor copes deadlock in parliament regarding its tax reformState lawmakers in suburban seats say younger voters are giving the government credit for trying to make housing affordable while seeing investors in the desert and property prices falling.
Behind the scenes, Chalmers is in talks with business and investor groups who have urged Labor to reverse the decision to reform the capital gains deduction for all assets. They want to put the new inflation discount on residential property, not stocks and private businesses.
Although Labor had expected opposition to the budget changes from property investors, they were surprised by the outcry over the CGT tax changes on social media, echoed by young business people.
Several sources familiar with the government’s thinking said it could retain Howard’s 50 percent discount for companies that meet startup criteria. These businesses would be taxed at higher rates under the new inflation-adjusted model, so the government could either allow them to use the 50 percent model or create a new discount, closer to the 50 percent version.
Cabinet ministers are looking into how to legally define creative startups. Determining the criteria seems difficult, but the government could use criteria that are already used to identify businesses eligible for existing startup programs, including those that offer employee stock plans.
The carve-out is expected to coincide with the extension of existing CGT exemptions for businesses with turnover of up to $2 million, which Labor will probably extend to high-turnover companies, and the rollback of voluntary testamentary trusts, which are expected. The Union has armed itself with the threat of a “death tax”. campaign. Both of these changes were revealed by this gentleman last month.
Prime Minister Anthony Albanese wants to announce the changes before two weeks of parliamentary sittings later this month, following a two-day inquiry into the bill, which has been heavily criticized as being rushed. Labor believes the Greens will remain and pass the bill quickly to avoid backlash from left-wing voters, possibly in return for a longer inquiry into NDIS cuts.
Various polls included Resolve Political Monitorthey have found that Labour’s budget was one of the most unpopular in recent history. Due to the inflationary shock caused by the war, the government decided not to give immediate tax cuts to soften the blow of broken promises.
Opposition leader Angus Taylor he told this star on Tuesday the Union vote had sunk because the Labor budget was boycotting both major parties and fueling the rise of One Nation. When asked about his statement at a press conference on Tuesday, Taylor used different language.
“Well, I’m just saying people are angry. People are angry. I mean, talk to them,” he said. “I can tell you what, this prime minister doesn’t know. He doesn’t, and so I can understand why they’re angry.”
Many Labor MPs are frustrated that the application of the new CGT discount to businesses, not just property investors, has made it more difficult to sell housing.
Ash Ambihaipahar, MP for the Sydney seat of Barton, said he went to four auctions, including one in Kingsgrove, in one day, and first home buyers were more likely to bid against someone else than against investors. The first term MP said the parents of the young couple were happy with the change, saying “it’s about time”.
“There is a good impression,” he said, arguing that the grassroots response was better than the media and polling was going on.
“I got more input on the gun (purchase, announced after the Bondi murder) at the local level than this budget.”
Josh Burns, who holds the Melbourne seat of Macnamara against the Greens, said he had received emails from constituents asking questions about the CGT changes, but had also received support.
“I am often stopped on the street and receive free and transparent advice. But it has been encouraging to hear people in my community, including when the Treasurer (Jim Chalmers) came to visit, to stop us, to tell us how they agree with the tax changes,” said Burns, the government’s special representative for housing.
Bennelong MP Jerome Laxale said there are three groups of opinion about the budget in his community: those who supported the tough call; cautious voters — “perhaps influenced by misinformation, exaggerated memes and scare campaigns” — who wanted an explanation; and those who opposed it directly, “as they always were”.
The government has said its housing budget was designed to balance the treatment of workers and capital gains, making housing more affordable. But Treasury secretary Jenny Wilkinson mixed up its message last month when he defended tax increases on the basis that “revenue needs to be raised from somewhere”.
Special Minister of State Don Farrell appeared as Wilkinson when asked by At night Monday why Labor proposed its changes.
“Well, we needed to control our budget,” he said. “The best outcome is that we put downward pressure on the deficit, on the federal deficit, so that ultimately leads to lower interest rates.”
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Paul Sakkal is a Senior Political Writer. He previously covered Victorian politics and won the Walkley Award and the 2025 Press Gallery Journalist of the Year. Contact him safely on Signal @paulsakkal.14.Connect via X or email address.
