A Senate inquiry into the tax changes is holding the first of two days of hearings on Monday.
Under the changes, the 50 per cent discount for capital gains tax will be replaced with a rate tied to inflation and a 30 per cent minimum, while negative gearing will be limited to new houses only from July 2027.
In a joint statement, business peak bodies warned the measures would lower productivity and make Australia less competitive globally.
AI Group chief executive Innes Willox said the changes were being rushed through and a two-day hearing was not enough to adequately examine them.
"It's been thrown together in a pretty slapdash manner, and it (the inquiry) only lasts for two days into what the government says is the most major piece of tax reforms the country has seen in the generation," he told ABC Radio.
"It's hard to take it seriously if that's all the scrutiny, discussion and analysis that will be done of the government's proposals in a parliamentary setting.
"It stands up very poorly compared to what you know the Hawke-Keating government did over tax reform, what the Howard government did with tax reform."
In the joint statement, the Australian Chamber of Commerce and Industry, AI Group, the Business Council of Australia and the Council of Small Business Organisations Australia said the changes must be rejected.
"At a time of growing global competition, Australia cannot afford policies that make us a less attractive investment destination," the statement said.
"If passed, these changes will affect businesses of every size, from companies investing in major projects to small and family-run businesses seeking to grow, create jobs and support their local communities."
Assistant Treasurer Daniel Mulino rejected the claims the tax change would reduce investment in Australia.
"There's a broad agreement, I think, amongst policy experts and economists, both in government and the private sector, that the current system is distorting decisions," he told ABC Radio.
"This will actually be more neutral across asset classes and make for a better tax system."
Mr Mulino said talks were still taking place with small businesses on potential concessions to the tax arrangements.
Labor said it would want the changes to pass by July 2, when parliament rises for the winter break, but their passage is not guaranteed.
The coalition has come out against the measures, while the Greens are yet to indicate whether they will back the reforms through the Senate.
Opposition Leader Angus Taylor said the inquiry process was not enough.
"It's a sham, it's a stitch-up, that's what we're seeing from this government," he told reporters.
"They don't want an inquiry, they don't want any consultation, they don't want to see a genuine debate in the community about whether this is the right thing for our country."
Real estate industry organisations and economists will also appear before the inquiry on Monday.
The Property Council of Australia said the government was yet to make the case the negative gearing changes would boost supply.
"At a time when governments should be focused on improving productivity, lowering delivery costs and removing barriers to investment, the budget instead places new tax burdens on capital formation, enterprise and aspiration," the group said in its submission.
The federal government says the measures will help an additional 75,000 Australians buy their first home in the next 10 years.
15°C