Jim Chalmers ‘recognises’ startups and VC need special consideration amid CGT change
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The news: Treasurer Jim Chalmers has given his strongest indication yet that startups and venture capital could be given special treatment over capital gains tax changes unveiled in the Albanese government’s 2026 budget.
Speaking on ABC Insiders on Sunday morning, Chalmers said there had been a “couple of formal consultations” with the Tech Council of Australia and the Investment Council about the changes.
“We do recognise that startups and venture capital, and particularly the tech sector, have got a different kind of cost-base calculation,” Chalmers said when asked about the issue, adding the government had been engaging with the sector since before budget night”.
He pointed out that this ongoing consultation was specifically mentioned in the budget papers.
“I’ve had a number of informal engagements even before budget night so we recognise there’s a different case here and we will work through [that] with the sector,” he said.
“It’s not unusual after a big tax change is announced for there to be consultation on implementation and we flagged for some time that we are prepared to do that and that’s already begun.”
The context: The impact of the removal of the 50% capital gains tax discount and return to indexation on early-stage businesses is a key source of consultation from the federal government after the 2026 budget.
Founders have been pushing back about the CGT changes, arguing Australia will be the worst country in the developed world for startup equity and the shift could see talent move offshore and undermine employee share option plans.
Chalmers used his Insiders appearance to emphasise the consultative approach he would take on this issue and to double down on the importance of his tax changes.
“We’re taking one of the big distortions out of the market,” Chalmers said.
“By taking that distortion out of the system, it is a fairer, more neutral treatment of investment, capital gains in particular.”
He said that, on average, housing was over-compensated and shares were under-compensated and said the 50% CGT discount was “why shares over time have become relatively less attractive”.
He said it would help people “make decisions based on economic outcomes rather than tax outcomes”.
“I think about nine in 10 people under 35 don’t have any shares, and for people who do by getting rid of this distortion, which overcompensates established housing and under compensates shares or investments ... that will be a much fairer, much more neutral treatment of capital gains in the system,” he said.
Chalmers also hit back at rival Angus Taylor, who was speaking on Sky News on Sunday morning criticising the treasurer for his budget.
What they said: Chalmers declined to support Taylor’s plan to index income tax thresholds, saying cuts needed to be undertaken in a “responsible and affordable way”.
He said the 2026 budget was one of the most “responsible” in memory and accused Taylor’s indexation proposal as being irresponsible, accusing it of adding an extra quarter of a trillion dollars in debt over the decade.
“He would dramatically increase debt, there would be much bigger deficits, there would be more inflation as well,” Chalmers said about the budget reply from Taylor, adding it would “cost the Australian people dearly in debt interest”.
“Over the course of the forward estimates, our tax reform package is broadly neutral,” he said, noting that over 10 years the CGT and negative gearing changes raise a bit over $40 billion each. But he emphasised there are also some tax cuts for businesses and workers.
The source: ABC Insiders
