Business Groups Urge Rejection of Capital Gains Tax Reforms at Parliamentary Inquiry

Four major Australian business organisations called on parliament to reject the first tranche of capital gains tax reforms during a two-day parliamentary inquiry that began this week. The Australian Chamber of Commerce and Industry, Business Council of Australia, Council of Small Business Organisations Australia and Australian Industry Group issued a joint statement urging lawmakers to reject the legislation.

The groups said the changes would affect businesses of every size, from companies investing in major projects to small and family-run businesses seeking to grow, create jobs and support their local communities.

"We urge the Parliament not to proceed with the legislation and consult with the business community in good faith to fully assess its consequences," the statement said. The government is replacing the 50 per cent capital gains discount with a deduction tied to inflation and curbing negative gearing for property investors.

Treasurer Jim Chalmers described the tax reforms as the biggest shake-up of the tax system in 25 years.

The three major business groups will appear jointly at the inquiry. COSBOA has advocated for the small business threshold to be lifted from a turnover of up to $2 million and net assets of $6 million, to $10 million and $12 million respectively. More than 90 per cent of Australia's small businesses have access to one of four CGT concessions and exemptions, while raising the threshold would open the door for a further 200,000 small businesses.

The government announced CGT carve-outs for startups and the tech sector on budget night. Chalmers has been careful not to rule out extending CGT carve-outs beyond those announced on budget night as consultation continues. The Housing Industry Association will appear at the inquiry on Monday.