The budget signalled changes to capital gains treatment that could make future business exits and equity outcomes less attractive for some founders, investors and high-growth businesses.
And honestly, I think that sends the wrong message.
Existing Concessions Still Remain
Yes, existing small business CGT concessions remain in place.
And yes, the government has flagged consultation on start-ups and early-stage businesses because it recognises these businesses operate differently.
But incentives matter.
Signals matter.
And when Australia talks about productivity, innovation and economic growth while making long-term entrepreneurial outcomes less certain, it raises concerns for people building businesses.
SMEs Are the Australian Economy
Small businesses make up more than 97% of all Australian businesses.
They employ more than 5 million Australians, around 40% of the private-sector workforce.
That is not a small part of the economy.
That is the economy.
The Reality of Building a Business
Yet the reality of building a business is brutal.
- Around 20% of Australian businesses fail within their first year.
- Roughly 60% are gone within three years.
- Less than half survive long term.
- Only a tiny fraction ever reaches the point of a meaningful acquisition or exit.
Most founders never see the payday people imagine.
Because for most founders, the exit is the payoff for years of pressure and uncertainty.
You go years underpaid.
You hire before you feel ready.
You carry the stress.
You cover wages, GST, PAYG, payroll tax, company tax, rent, super, suppliers, legal fees and accounting fees, all before you know if it will even work.
And if you’re one of the very small percentage who build something valuable enough to exit?
The long-term incentive to take entrepreneurial risk becomes less certain.
Why This Matters
At a time when Australia keeps talking about productivity, innovation and economic growth, that feels backwards.
- Build a business.
- Create intellectual property.
- Export an Australian brand globally.
- Employ hundreds or thousands of Australians.
- Create long-term economic value.
- This should be encouraged.
This Isn’t About Paying No Tax
This isn’t about founders paying no tax.
Most successful founders are proud taxpayers because they’ve contributed to the economy for years before any exit ever happens.
But there’s a difference between taxing success and discouraging the creation of success in the first place.
Australia’s Future Depends on Entrepreneurs
The businesses Australia needs tomorrow are being built by founders taking risks today.
Australia should be doing more to back SMEs, founders and high-growth businesses — not creating uncertainty around the very incentives that drive people to build them.
Because productivity growth does not come from government spending alone.
It comes from entrepreneurs building companies, employing Australians, creating intellectual property, exporting products and generating long-term tax revenue for the country.
Disclaimer
General strategic perspective only.
Not tailored advice.
Apply with consideration to your own business context.