Australians have unleashed on Anthony Albanese's bid to introduce what they call the 'highest capital gains tax in the world' in submissions for a 'rushed' public consultation that lasted less than two weeks. A Senate inquiry into the government's controversial new law changing the capital gains tax (CGT) discount and negative gearing kicked off on May 28.
Public consultations for Senate inquiries generally last four to eight weeks, but submissions on the bill will close on Tuesday, allowing just 12 days and covering the King's Birthday long weekend. Some Aussies fumed about the quick turnaround in their submissions, suggesting the Albanese government was trying to ram the changes through before parliament's winter break.
Public Outcry Over Short Deadline
'What a bloody joy it is to be spending a public holiday hastily scribbling this submission against yet another tax grab, with submissions due the day after a long weekend,' one submitter wrote. Another added: 'Labor promised before the election they wouldn't touch CGT like this. Now here we are, post-Budget, with a rushed bill that guts the 50 per cent discount Australians have relied on for decades to encourage investment, risk-taking, and building wealth.'
Fund manager and former NSW government economist Derek Francis attached modelling showing the changes would leave Australia with the 'highest capital gains tax in the world.' 'It will be 147 per cent above the world average capital gains tax, and a 69 per cent increase on the current effective rate of capital gains tax in Australia,' Mr Francis said, referring to a table that showed the 'average effective CGT rates for a typical retail investor' under the proposed changes. It ranked Australia at the top — above Denmark, Norway and the Netherlands.
Expert Warnings on Economic Impact
Australian National University economics professor David Stern also weighed in, saying the removal of the CGT discount would 'give Australia one of the least competitive capital gains tax rates in the developed world in the case of rapidly growing businesses such as start-ups.' 'This will discourage the founding of innovative businesses in Australia rather than in lower tax jurisdictions,' wrote Prof Stern, who suggested the reform should be limited to residential property only. 'These changes disincentivise the risk-taking, innovation, and investment that help drive productivity growth.'
Craig Rayner, CEO of Melbourne-based health tech company Oktopi, warned in his own submission that the change could lead to capital flight and brain drain as entrepreneurs moved to countries with friendlier tax systems. Mr Rayner said it was already impacting decisions at his own firm. 'For a founder weighing where to incorporate the next medicine development, climate technology, or quantum computing company, the choice between Melbourne and Singapore, or between Sydney and Auckland, becomes a choice between a regime that taxes the entirety of a decade of foregone salary on realisation, and one that does not tax it at all,' he wrote. 'The conversations are already happening, and they will accelerate... Uncertainty alone has already paused our discussions to repatriate two senior Australian biotech leaders from Europe and the United States.'
Criticism of Consultation Process
The Tax Institute's Julie Abdalla was among the critics of the brief window offered for feedback. In a statement late last month, she said public consultation on the law, including the tax changes, should have happened before it was introduced to parliament on May 28, not after. 'When consultation is rushed, or occurs only after a bill has been introduced, stakeholders are effectively responding to a largely settled policy position,' Ms Abdalla said. 'That is not a substitute for genuine engagement during policy development. These reforms were not measures that Australians were asked to vote on at the election. Given their significance, it is entirely reasonable to expect that taxpayers would have an opportunity to consider the proposals and express their views before legislation is introduced... Reforms of this scale should not be rushed.'
What Are the Tax Changes?
The government's proposed changes in the May budget include replacing the 50 per cent CGT discount with an indexation model for almost all assets. After July 2027, Aussies who sell shares, businesses or farmland will have to pay CGT of at least 30 per cent on their indexed capital gain, or their marginal tax rate of up to 47 per cent. Previously, they would have been eligible for the 50 per cent discount if they held those assets for more than a year. Negative gearing for property investments will also be limited to new builds, with properties held before budget night exempt. The changes are included in the Treasury Laws Amendment Bill 2026, which has passed the House of Representatives but must still pass the Senate, where Labor will require crossbench support following the inquiry's final report on June 22.
