National

Startups wouldn't exist under tax reform, inquiry told

Jun 17, 2026

Small business owners, CGT graphic — Under proposed changes, the capital gains tax discount will be replaced with inflation indexation. -PR HANDOUT

A peak body for private capital has warned some of Australia's most successful companies would not have survived without the current tax policy settings.

Hold tight - we’re checking permissions before loading more content

Australian Investment Council chief executive Navleen Prasad told the two-day parliamentary inquiry into Labor's planned tax changes, the policy architecture for venture and growth investment has been based on the existing capital gains tax discount.

"Through policy settings that have been supported by parliament over the last 20 years, we now have a sector in which, at least through the venture capital and the early stage venture capital, limited partnerships have channelled $36 billion of capital into the venture and growth sectors," she told Tuesday's public hearing.

"I would argue that if we didn't have that list of support, we wouldn't have companies like Canva or Employment Hero with us today."

Under changes proposed by the Albanese government, the capital gains tax discount of 50 per cent will be replaced with an inflation-indexed model and a 30 per cent minimum rate.

But the chief executive of digital health business Eucalyptus, Tim Doyle said he didn't believe the reform would affect the behaviour of startup founders.

"We aren't short on founders ... startups founders tend to do things out of an irrational desire to change the world rather than to reduce a tax outcome for themselves, and I certainly fell into that," he said.

He suggested genuine employee equity in early stage companies be exempt from the CGT changes.

"The best thing that we can do as part of these changes, or any carve out here, is to protect those employees, because quite often they come last in the stack of people that are cared about in startups, because you have investors protecting themselves through their share arrangements, and then you have founders protected through their board seats," Mr Doyle said.

His employees benefited from his company's recent sale to a US competitor for more than $1 billion.

A report on Labor's proposed reform is due to be handed down by the inquiry on Friday, as the government seeks for the measures to pass the parliament by the end of this month.

The coalition is opposing the changes, while the Greens are yet to lend their support.

Labor would have the numbers to get its tax reform over the line with the minor party's support in the upper house, but the Greens are pushing for the government to scrap concessions for existing investors.