Australian founders are taking the fallout over Labor’s capital positive factors tax modifications on to the Prime Minister via a brand new open letter marketing campaign.
Australian founders are taking their backlash over Labor’s capital positive factors tax (CGT) modifications on to the Prime Minister via a brand new open letter marketing campaign.
Australian founders below 40 have launched an open letter to Prime Minister Anthony Albanese urging the federal authorities to rethink controversial capital positive factors tax (CGT) modifications unveiled within the 2026 price range.
The letter says the proposed overhaul dangers discouraging the companies Labor says it needs to help.
The marketing campaign particularly targets founders and enterprise builders below 40, positioning the modifications as a risk to youthful Australians making an attempt to construct corporations, make investments and create wealth domestically.
The outcry centres on Labor’s proposal to scrap the prevailing 50% CGT low cost for belongings held longer than 12 months and substitute it with a cost-base indexation mannequin.
Startup founders and traders argue the transfer might dramatically enhance tax payments for folks constructing or backing high-growth companies.
“We work the hours. We feature the chance,” the letter reads.
“We do it as a result of we consider within the enterprise we’re constructing, and since we now have been informed, repeatedly, that this spirit of getting a crack is strictly what the nation wants.
“Sadly, the Funds your authorities simply introduced tells us a really completely different story.”
Founders again housing reform, however not enterprise tax modifications
The signatories say they help measures geared toward bettering housing affordability, together with eradicating the CGT low cost on residential funding properties and modifications to unfavourable gearing.
However they argue extending the reforms to shares and enterprise possession unfairly punishes youthful Australians making an attempt to construct corporations and put money into productive companies.
“By eradicating the CGT low cost on shares, and changing it with a price base indexation scheme, you’ve clocked us with a large tax hit after which give you a alternative that can make issues even worse,” the letter reads.
“This aspiration ambush doesn’t simply affect tech startups both, it impacts each rising enterprise in Australia.”
The group behind the letter contains me&u co-founder and CEO Kim Teo, Bastion founder Jack Watts, Cyber Revolution co-founder Adam Hewitt, and Linktree co-founder Alex Zaccaria.
The letter positions itself as broader than the tech sector. It frames the modifications as a problem for formidable small enterprise house owners and founders throughout the complete Australian economic system.
“An enormous signal for us to go away”
In a LinkedIn post accompanying the marketing campaign, Kim Teo framed the problem as a part of a broader problem already going through Australian founders competing globally from a geographically remoted market.
“I’m scripting this from Chicago, attending the nationwide restaurant present with our US staff and companions,” Teo mentioned.
“Out of 100 folks I met over the previous couple of days – there have been [two] from Australia. Everybody else, impressed on the 20 hour journey effort to get right here.”
“It jogged my memory how a lot further effort Aussie founders & groups already should make to construct a worldwide enterprise.”
Teo mentioned she was comfy paying Australia’s present 23.5% CGT price, however warned the proposed modifications might ship the incorrect sign to formidable founders.
“47% would really feel just like the Australian authorities are [sic] holding up a giant signal for us to go away.”
The open letter comes amid mounting backlash from the startup sector, traders and enterprise teams over the proposed CGT modifications for the reason that federal price range.
NSW shadow minister for science and know-how, Jacqui Munro, has launched a separate ‘#StopTheTechTax’ petition alongside federal shadow innovation minister Aaron Violi. It argues that the modifications might push startups, expertise and funding offshore.
Shadow treasurer Tim Wilson has confirmed the Coalition would repeal Labor’s proposed CGT and unfavourable gearing modifications if elected, whereas startup teams proceed warning the reforms might make startup fairness and worker share schemes considerably much less engaging.
The federal authorities acknowledged the problem in accompanying price range paper materials.
“Given the distinctive traits of the tech and begin up sector the Authorities will seek the advice of on the interplay of the capital positive factors tax reforms and incentives for funding in early-stage and start-up companies,” the document read.
Since then, the federal government has flagged potential carve-outs for high-growth corporations, with Treasurer Jim Chalmers acknowledging some startups might face larger tax burdens below the modifications.
“We predict you’re a actually necessary a part of the economic system, in numerous methods the hope of the aspect relating to dynamism and productiveness, and we are going to replicate and recognise that in our coverage,” Chalmers said during Question Time last week.
However the founders behind the letter argue the problem extends nicely past venture-backed tech startups.
“That means each small enterprise that wishes to turn into a medium-sized enterprise and each medium-sized enterprise that wishes to turn into a giant enterprise,” the letter says.
“These are the enterprise builders which have simply been hit for a six by a tax change dropped on us out of the blue.”
Organisers are encouraging further founders below 40 to signal the letter forward of business roundtables reportedly happening this week.
