Top VCs label ALP tax on unrealised capital gains 'bad policy'
Venture capital leaders warn Labor's proposed tax on unrealised super gains threatens innovation funding and creates impossible liquidity challenges for startup investors.
Prominent Australian venture capitalists have hit out at the Albanese government's plan to tax unrealised gains on assets held in super funds with balances above $3 million, warning it could stifle the industry and kill smaller VC firms.
The industry leaders say the tax fails to account for the highly illiquid nature of investing in startups, potentially forcing investors to pay tax on paper gains that might never materialise, and as such the VC industry should get an exemption.
"The idea of levying tax on unrealised capital gains is bad policy, sets a terrible precedent, and is likely to create unintended consequences," Paul Bassat, co-founder and partner at Square Peg told Capital Brief.
"The real issue is that this is another example of government tinkering with tax policy when what we need as a country is a serious debate about what our tax policy should be. We need to have the right policy to create the right incentives to drive growth and increase prosperity."
