Labor Cabinet secretary Andrew Charlton has conceded the new capital gains tax regime “doesn’t interact well” with small businesses that have a low capital base.
The comments made by the Assistant Science Minister on Nine’s Today show on Friday appear to validate the sector’s concerns about the reform.
Asked if the Budget “outcry” was “unwarranted”, Mr Charlton acknowledged the new system hurts underfunded businesses.
“The point that many start-up founders, the point that many small businesses have been making is valid,” he said.
“It’s a valid point because that new regime doesn’t interact well if you have a really low capital base because you’ve got nothing to inflate off.
“So, there are real concerns out there.”
The Labor rising star added that the Treasurer had himself recognised the concerns of the sector before the Budget, noting in the final edition included that consultation would continue.
Treasurer Jim Chalmers had yesterday described much of the criticism as a “scare campaign built on lies” but had also agreed that the changes were “contentious”.
It comes after waves of small business owners used AI-generated images of Anthony Albanese to criticise Labor’s decision to include all asset classes in the CGT changes in what those critics are calling a “tax on success”.
The 50 per cent CGT discount will be axed to make way for an inflation-indexed model and a 30 per cent minimum tax rate on all net capital gains, covering everything from property to new shares and crypto.
But the fallout continued from the promise-breaking Budget on Friday, with new polling carried out by DemosAU for Capital Brief showing One Nation had overtaken Labor.
The poll, which was undertaken between May 14 and 20, showed Labor had sat flat on a 26 per cent primary vote while Pauline Hanson’s minor party rose to 28 per cent.
It comes amid reports that the Albanese government is considering a possible carve out for the changes to new discretionary testamentary trusts.
A concession could help Labor counter claims from opponents that the changes would be a “death tax” or “death duty” on Australians.
When asked about the speculation on Friday, the Prime Minister labelled claims Labor was trying to hit to inheritances as “misreporting” but added there would be consultation around trusts.
“Let’s be very clear. When it comes to some of the misreporting that’s there, we’re not interested,” he said.
“There’s no measures in there that are going to hurt inheritances.
“On trusts, there’ll be a consultation period about that, and we made that clear on Budget night.
“So, we’ll work through the legislation. We’ve said (it) will be introduced in the second half of the year.”
Former Labor Minister Joel Fitzgibbon questioned the party’s approach, saying from the outside it appeared like “reform for reform’s sake”.
“It looks to me a little bit like reform for reform’s sake,” he told Sky News on Friday, characterising the Budget as “rushed” and it’s sell as “messy”.
“I mean, they’re only securing about . . . just over a billion dollars a year in revenue terms — that sounds a lot of money to your viewers — but in Federal Budget returns, it’s not.
“I mean, it’s a lot less than we spend on subsidising renewables each year.
“I think the government got caught up in this push to . . . use their 94 seats in the House of Representatives to pursue some reform.
“So there’s not a big return for the government in any of this. Now, of course, they’re right to focus on housing affordability.
“But of course, there’s too much doubt in the community, and indeed, amongst the experts in that area as to whether this is going to make any rule and meaningful difference in housing affordability.
“I doubt right now whether the government’s going to get any bang for its buck out of this budget.
“Alternative, of course, it’s likely to be a drain on it’s political support for some time.”
Opposition leader Angus Taylor also accused Labor of appearing to rush the Budget and insisted they appeared “panicked” and “scrambling” after the fall out.
“There’s no plan here. There’s a panic and they’re scrambling for the exit because they hadn’t realised what they were doing,” Mr Taylor said on Friday.
“This Treasurer and this Prime Minister does not understand business, does not understand the private sector.
“Does not understand what it takes to grow an economy and certainly doesn’t understand what it takes to grow a business.
“They’re looking for any distraction. They can find at the moment because they’ve realised, what a mistake they’ve made.”
He also accused the government of trying to erode Australia’s standard of living and highlighted the cutting of the counter-terrorism budget in the lead up to the Bondi Beach massacre.
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