Chalmers to imminently unveil CGT startup plan, will seek feedback
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The news: Treasurer Jim Chalmers will soon release Labor’s workaround for startups alarmed by his capital gains tax (CGT) changes, amid concern from the sector over last month’s budget.
The context: Addressing the Morgan Stanley Australia Summit on Thursday, Chalmers accepted that startups face specific challenges as Labor aims to remove the 50% CGT discount this month.
Chalmers has argued that he had been consulting with the founders since before the budget, having flagged some form of carveout for a sector which heavily relies on the discount to attract talent.
On Thursday, the treasurer confirmed he will “shortly” publish a policy paper seeking feedback on his proposed workaround.
“We do recognise there are some specific issues for small and startup businesses with low or zero cost base, and we have been engaged in targeted consultation with these sectors,” he said.
Capital Brief reported on Thursday that people involved in discussions do not expect a carveout to be part of the government’s first tranche of legislation.
Labor aims to ram through the key elements of its budget, including its changes to the CGT discount, by the end of the month.
Multiple sources involved in discussions expect the government to make its carveout part of a second tranche of legislation it takes to parliament.
Given the midwinter recess, that would mean August at the earliest, though it is not expected to come into effect until closer to December’s Mid-Year Economic and Fiscal Outlook.
What they said: “Shortly I will publish a policy position paper seeking feedback on our proposed approach, consistent with the commitment we made privately before the budget and publicly in the budget documents,” Chalmers said.
The source: Jim Chalmers speech
