Australian business leaders and investors are increasing pressure on the federal government to reconsider its capital gains tax (CGT) reforms scheduled for July 2027. A new proposal to introduce a 40 per cent discount for active business assets has attracted support from prominent industry figures concerned that the changes could discourage investment, entrepreneurship and business growth.
The debate intensified after approximately 300 business owners and investors gathered in Sydney on November 11, 2026, at an event organised by Get Ahead Australia to oppose the government’s CGT changes.
CGT Changes
The government’s reported reforms would replace the existing 50 per cent CGT discount with a system that adjusts investment gains for inflation.
The changes are also expected to introduce a 30 per cent minimum tax rate on certain capital gains.
Under the existing general framework, eligible individuals can receive a 50 per cent discount on capital gains from assets held for more than 12 months.
The proposed replacement would calculate taxable gains differently, potentially increasing liabilities for investors whose assets have experienced substantial growth above inflation.
Although housing investment has attracted considerable attention, the proposed changes extend beyond residential property.
Business ownership, company shares and other investment assets could also be affected.
40% Discount Plan
Independent MP Allegra Spender has proposed an alternative approach intended to protect businesses that take financial risks.
Her Active Asset CGT Exemption Proposal would retain a flat 40 per cent discount for qualifying active assets instead of applying the new inflation-based calculation.
The proposal would cover eligible business assets, including certain shares and share options.
Spender argues that businesses should not have to meet narrow innovation requirements to receive favourable tax treatment.
Established companies pursuing expansion, emerging businesses and entrepreneurs taking substantial commercial risks could potentially benefit.
The proposal aims to maintain incentives for investment while preserving government tax revenue.
Business Support
The Australian Industry Group has backed Spender’s alternative.
Its chief executive, Innes Willox, urged Treasurer Jim Chalmers to reconsider how the reforms would affect Australian businesses.
The industry group believes the proposed tax changes could create unintended consequences for companies operating outside the residential property sector.
Its concerns include reduced investment incentives, weaker business competitiveness and potential difficulties attracting capital.
Supporters of the 40 per cent discount argue that a simpler system could provide greater certainty for business owners planning long-term investments.
However, whether the alternative would deliver the same revenue as the government’s approach would depend on detailed modelling and final eligibility rules.
Another CGT Idea
Stockspot founder and chief executive Chris Brycki has suggested a different approach based on how long an investment is held.
His proposal would introduce a 5 per cent CGT discount for every year an investor holds an eligible asset.
Under this model, the discount would increase gradually rather than becoming available at a fixed rate after 12 months.
For example:
- After two years: 10 per cent discount
- After four years: 20 per cent discount
- After six years: 30 per cent discount
- After eight years: 40 per cent discount
The approach is intended to reward investors who retain assets for longer periods.
Brycki believes a gradually increasing discount could discourage short-term trading motivated primarily by tax advantages.
Long-Term Investment
One criticism of the existing CGT discount is that investors can qualify for the full concession after holding an eligible asset for just over a year.
Brycki argues that this structure does not provide enough additional reward for investments held over much longer periods.
A tapered discount could create stronger incentives for patient capital, particularly in businesses requiring several years to become profitable.
This could be relevant for startup founders, growing companies and investors supporting long-term business development.
However, Brycki has acknowledged that his proposal would involve greater administrative complexity than simply introducing a flat 40 per cent discount.
Its revenue impact would also require detailed Treasury analysis.
Investor Concerns
Business groups argue that the proposed reforms could influence where Australians choose to invest their money.
Investors may reconsider holding shares or financing growing businesses if the expected after-tax returns become less attractive.
Entrepreneurs could also face different incentives when selling companies or transferring ownership interests.
Wilson Asset Management founder Geoff Wilson has been among the prominent critics of the government’s approach.
He has warned that economy-wide CGT changes could affect entrepreneurship and long-term capital investment, rather than simply changing property investment behaviour.
However, supporters of reform argue that capital gains concessions should be assessed for fairness, revenue sustainability and their broader economic effects.
The disagreement centres on how to balance these objectives without discouraging productive investment.
Political Pressure
The Sydney gathering organised by Get Ahead Australia highlighted continuing opposition to the reforms.
With business representatives, investors and political figures promoting alternative models, pressure is building on the government to consider amendments before the scheduled commencement.
Spender’s proposal has attracted industry support, but parliamentary agreement remains uncertain.
Changing the government’s approach would require political negotiations and potentially further legislative action.
Brycki has suggested that reversing an established policy could be politically difficult, even if business concerns continue to grow.
For now, the proposed 40 per cent active-asset discount and tapered annual discount remain alternatives rather than confirmed tax rules.
What Happens Next?
Australian investors and business owners will be watching closely for any government response ahead of July 2027.
Those considering selling businesses, exercising share options or realising substantial investment gains may need to examine how different CGT arrangements could affect their liabilities.
The final outcome could influence investment decisions across multiple industries.
While the government maintains its broader tax reform objectives, business groups are calling for changes that better recognise commercial risk and long-term investment.
The central issue is whether Australia can reform capital gains taxation without weakening incentives for business growth.
With two alternative discount models now attracting attention, the debate over the country’s future investment tax settings is likely to continue.
