SYDNEY, June 18 - In response to objections from industry groups, the Australian government has adjusted its planned capital gains tax (CGT) reforms to lessen the burden on smaller firms. The changes were unveiled on Thursday after critics argued the originally proposed measures would undercut incentives to invest in and expand businesses.
Under the reform package announced in last months budget, a 30% minimum tax on net capital gains is slated to come into force from July 2027. The original proposal prompted concern among business groups who warned it could reduce the appeal of reinvesting proceeds from sales back into enterprises.
To temper those concerns, the government is increasing the turnover threshold that determines eligibility for a longstanding CGT concession. Businesses with turnover up to A$10 million will now be able to access a 50% discount on capital gains for assets held for more than 12 months, up from the previous A$2 million threshold. The administration said this change will extend the concession to 2.7 million active small businesses across the country.
"We back Australian small businesses and the important role that they play in Australia," Prime Minister Anthony Albanese said, framing the adjustment as support for the small-business sector. In addition to broadening the discount, the government said it will introduce a new "innovative business tax concession" designed for start-ups, though the announcement did not set out further specifics on eligibility or mechanics.
The statement reiterated the timing for the minimum CGT provision and left the structure of the start-up concession to be outlined later. For currency context, the government noted the exchange rate at the time of the announcement: $1 = 1.4239 Australian dollars.
Policy watchers will be tracking the forthcoming details of the start-up concession and the full implementation plan for the minimum tax when the government publishes formal rules. For now, the adjustment to the turnover threshold represents a substantial narrowing of the original proposals immediate reach, with the government framing the move as a way to preserve investment incentives for smaller firms while proceeding with the broader tax reform agenda.