Opposition leader Angus Taylor calls government’s CGT backdown ‘half-arsed’

Angus Taylor has branded the government’s backdown on capital gains taxes for small businesses “half-arsed” as the topic is set to dominate business in Canberra this week.

The Opposition Leader diminished the government’s limited reductions on capital gains taxes for new businesses, days after Anthony Albanese and Jim Chalmers announced start-ups with turnover up to $10m will get a 50 per cent tax discount; up from $2m.

The initial CGT tweak, delivered in last month’s budget, has been widely panned by tech founders, and the federal opposition has described it as a “war on ambition”.

Speaking after the turnover threshold was lifted, Mr Taylor said the carve-outs were “half-arsed” and the tax as a whole was an “abject failure”.

“This is abject failure, and they are layering failure upon failure,” he told Sky News’ Sunday Agenda.

“And now we see a half-arsed carve-out from this government that is an admission of failure.

“Well, why not just get rid of the whole thing? Scrap it and start again. We need a budget that is right for the times, right for the country and right for prosperity.”

The fine print on the carve-outs will become clearer after consultation.

But a narrow range of “innovative” start-ups, such as technology and biotechnology firms, will be eligible for a 50 per cent discount on capital gains. The tax is likely to apply to founders, employees granted shares and other early-stage investors.

Criticism of the budget announcement has included fears the taxes will drive entrepreneurial Australians overseas.

About 60 per cent of all capital gains income is shared by just 0.2 per cent of tax filers, tax office figures show. Revealed by Mr Chalmers this week, 99 per cent of Australian tax filers account for only 13 per cent of all capital gains income in the 2023/24 year.

Mr Taylor said those figures were “ridiculous”.

“That’s irrelevant. What matters is what happens over someone’s lifetime, not over a very short period of time, so it’s a ridiculous analysis,” he said.

“What’s clear is that these taxes are going to hurt aspiration in this country.

“They are an assault on aspiration, on ambition, on investment, on risk-taking, on growth, on rising standards of living, on all the things that we know drive prosperity.”

The federal budget also included a $10bn package to cut a host of red tape for businesses.

In an earlier, prerecorded interview with Sky News, the Prime Minister said it was important to remember capital gains taxes were paid when an asset was sold.

“This isn’t an ongoing tax on a week-to-week basis,” he said.

Consultation with start-ups is also ongoing.

Mr Albanese said just because taxes were higher when an owner sold their business, that did not reduce incentive to grow the business itself.

“The aspiration is the same as for every worker; more income, to aspire to be better off in life,” he said.

“And what we’re doing is better aligning income from work, with income from assets.

“When most people go into small business, they don’t go in so they can start a small business today and sell it tomorrow.”

Many small businesses were also run by generations of the same family, he said.

“This is removing an anomaly, really, that was there that saw from 1999 - what we saw was additional investment, funnelled into housing, that’s had a real impact on property, that has meant that young Australians are simply priced out of housing.”