Small business owners are warning the Federal Budget risks discouraging Australians from starting companies and backing startups, arguing entrepreneurs are being punished for taking huge personal and financial risks.
Business owners have warned the proposed changes could leave founders handing over almost half the profits from selling a business, despite years of sacrificing salaries, taking on debt and risking their personal finances to get companies off the ground.
Backlash Over Small Business Tax Changes
Rachael Wilde, co-founder of The Breakout Hack and Bouf Haircare, told Sunrise on Tuesday the changes fail to recognise the reality of how many Australians build businesses from scratch.
“People sell their DJ decks to start their small businesses. It’s such a small cost base that you start with,” Wilde said. “But you sacrifice your salary. You take out personal loans in your own name. You take all this risk on then, when you go to sell it, you’re taxed so heavily because your cost base is so small. I don’t think that’s actually been thought through.”
Wilde warned the changes could have broader consequences for Australia’s economy by discouraging both entrepreneurs and investors from backing new ventures.
“Today’s startups are tomorrow’s employers and innovators. And we should want more of that in the Australian economy,” she said.
Social Media Backlash and Memes
The backlash has even spilled onto social media, with small business owners taking part in a viral wave of AI-generated memes mocking Prime Minister Anthony Albanese as their new “business partner”.
In the trending posts, Albanese has been depicted as everything from a tradie to a salon worker as start-up owners mock the government taking a share of future profits despite not taking on the risk of building the business.
The criticism comes as younger Australians increasingly turn to alternative ways of building wealth amid soaring housing prices.
“I think there’s been a big focus in the budget around levelling the playing field, but that’s to do with owner-occupied property primarily,” Wilde said. “For young Australians, the idea of being able to own in an area where you want to live has felt out of reach for a very, very long time.”
With median house prices in Sydney sitting at 14 times the annual average income, Wilde said many Australians had adapted through strategies like starting businesses, accepting employee share schemes and rent-vesting.
“It’s hard to feel like in this budget that those ladders are now not just being taken away from young Australians, just as we’ve found a way to access them,” she said.
Multiple Areas Affected
The changes hit across multiple areas, with concerns raised about higher taxes on investment properties, shares, cryptocurrency and small business owners earning over a specified threshold.
“We weren’t expecting all of these other pathways and assets to fall into the same bracket as property,” Wilde said. “I think we can all admit there is a property problem, and we want a fix, and I think it’s a bold budget, and that’s great, but why have these other pathways also been put in there, because if you are going to take away a property as the wealth creation asset then I think you have to consider what you’re putting in its place for young Australians when we should be giving young Australians more options, not less.”
Even a former adviser to then Labor leader Kevin Rudd has criticised the changes, telling The Sydney Morning Herald they would make it “much, much harder” for young Australians to start or work in small business.
“We should be giving young Australians more options, not less,” Wilde said. “And that’s how it felt in this budget.”
