While the federal government’s desire to level the playing field for younger generations trying to buy their first home is highly commendable, its new Capital Gains Tax (CGT) reform threatens to create uncertainty within our economy.
By replacing the 50pc CGT discount with an inflation-indexed system and a 30pc minimum floor tax, Canberra is effectively punishing the foundation of our aspirations.
Small to medium enterprises make up over 97pc of actively trading Australian businesses and employ nearly two-thirds of our private workforce.
These are the businesses lining our local main streets - the cafes, the tradies, and the family-owned retail shops, many under stress of local trading sales.
The 50pc CGT discount was the light at the end of the tunnel for an owner looking to retire, but slashing that concession is raiding those funds from everyday people.
The government said it would also consider offering exclusive CGT carve outs for tech start-ups.
Some small businesses and farmers currently receive CGT exemptions, yet the thresholds set 20 years ago are far less relevant in today’s economic climate.
Faced with backlash, the government has now introduced legislation and flagged urgent consultations to fix how the laws interact with everyday small to medium businesses.
Yet it has maintained the core of the reform - removing the 50pc discount and implementing a 30pc floor tax - must apply.
This policy signals a bias, implying that a software firm start-up is somehow more worthy of tax relief than a local manufacturing workshop or family bakery.
Every small business owner who risks their own capital drives our economy and deserves identical treatment.
The government must realise that helping young homebuyers should not mean crushing the local businesses that employ them.
