As the federal budget fallout continues, Minister for Small Business Anne Aly says the Albanese government will consider “reasonable questions” about its contentious capital gains tax reforms and the future of four small business concessions.
Aly on Monday joined the chorus of Labor government ministers defending the 2026-27 budget, which calls to replace the 50% capital gains tax (CGT) discount with a model taxing ‘real’ gains above inflation.
Speaking to SmartCompany on Monday, Aly blamed “misinformation and disinformation” circulating on social media, including through AI-generated memes, for “confusion” about the new CGT measures.
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But sincere concerns do exist.
Some small business representatives and leading economists fear higher taxes on the profits of selling a business could discourage entrepreneurs from starting in the first place.
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Responding to criticisms that the CGT reforms amount to a tax on aspiration, Aly pointed to four concessions shielding small businesses from major CGT bills that went unchanged in the federal budget.
Those concessions — which variously allow founders to reduce or disregard their CGT, if the sale is related to retirement or replacing business assets — will continue to apply for the “vast majority” of small businesses, she said.
But to qualify for those concessions, small businesses must have a net asset value below $6 million and an aggregated turnover below $2 million, with both thresholds unchanged since 2007.
And the 15-year exemption — the most generous concession, allowing taxpayers to entirely disregard capital gains tax — is only open to those aged 55 or older, making it unsuitable for younger founders looking to cash in on a thriving business.
Acknowledging those eligibility thresholds have not been reviewed in nearly two decades, Aly said the government is still consulting with small business leaders over its reform package.
“We’re not designing this reform from Canberra in isolation, we’re working directly with the people who represent small business, who represent startups and industries across the country,” she said.
“I think where there are reasonable questions, I think they deserve to be raised,” Aly added.
When asked if the government is open to lifting those CGT concession thresholds, as some tax experts have suggested, Aly said: “We’ll consult with the representatives of small business, and we’ll go from there”.
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Aly was circumspect on the prospect of broader carve-outs for technology startups, as founders and investors clamour against the budget measures.
Budget papers state taxpayers will only face a CGT bill on their profits above inflation.
But some startups have a cost base near $0, effectively making a founder’s entire windfall a taxable gain.
“What I can tell you is that startups are part of the conversation because they’re an important part of Australia’s future economy, and because we understand the structure and the setup for startups is kind of unique,” said Aly.
“And so we’re continuing to have those conversations and to consult with them.”
