Anthony Albanese has laughed off an AI-generated meme campaign against capital gains tax changes from startup founders, thanking them for “very flattering” doctored photos of him working in their businesses.
But independent politicians representing some of Australia’s startup hotspots have raised alarm over the proposed increase to capital gains tax, warning the tax changes could see innovative companies and tech firms move overseas to chase higher rewards.
“The government needs to do the deep consultation required to get this policy right so any changes don’t drive investment offshore. We need to retain maximum sovereign innovative capability and retain economic benefit here in Australia,” said ACT senator David Pocock.
Last week’s federal budget proposed to change CGT – replacing the 50% tax discount on profits with “cost-base indexation”, meaning tax on profits after inflation, and a minimum 30% tax rate – which would affect profits on selling properties, shares and other assets.
Guardian Australia first reported on the AI-generated photos of Albanese being mockingly posted by tech startups and business owners, in protest of the proposed CGT changes. Entrepreneurs and the tech sector have warned that increased taxes could push people away from working for new businesses or send startups overseas.
Early-stage companies with little cashflow often offer employees equity in the company or stock options in lieu of higher pay, while founders can be motivated to take risks with new ventures by a large potential payday when they sell their companies.
The treasurer, Jim Chalmers, has said the government is still consulting on the changes, not denying there may be a carveout or special treatment for new businesses.
Wentworth MP Allegra Spender, Kooyong MP Monique Ryan and Canberra-based senator Pocock all backed the government’s broader moves on tax, negative gearing and CGT, but warned the application of the CGT changes to the startup sector specifically could be counterproductive.
“The government should be consulting widely – it is with the tech sector and needs to go further with business owners, fund managers and the broader community,” Spender said, calling on the government to take time to “get the balance right”.
“Tax reform is hard. It needs to balance prosperity and fairness and get that balance right.”
Spender held a roundtable discussion with startup founders in her eastern Sydney electorate on Monday, and plans to relay their concerns to government. She suggested revenue raised from CGT changes should be returned to Australians as income tax cuts.
Ryan, whose electorate is in inner Melbourne, suggested company founders, early employees and investors should get discounted or concessional rates of CGT.
“I’ve heard from constituents…
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