One of Australia's richest businessmen has unleashed on the Albanese government over proposed tax changes he fears will have dire consequences for young Australians. Federal Treasurer Jim Chalmers is considering an overhaul of the capital gains tax discount ahead of next week's budget.
Proposed Changes to Capital Gains Tax
It is expected to include the removal of the 50 per cent capital gains tax discount for assets held longer than 12 months and replace it with the pre-1999 system, under which real gains are taxed after adjusting for inflation over the life of the investment.
Wilson Asset Management founder Geoff Wilson, who recently returned to Australia's Richest 250 list with an estimated fortune of $900 million, slammed the proposed changes as a 'punitive raid on aspirational Australians' in a series of scathing posts.
Impact on Young Investors
A young Australian who invested $10,000 a year for 50 years, compounded at 15 per cent annually, would see their investment grow to $10.84 million. Under the current 50 per cent discount, the government would take 'roughly $2.54 million in tax', according to Mr Wilson. The tax would double to $5.23 million if speculation about the proposed changes is correct.
'This isn't reform. It's theft from every aspirational Australian under 40 trying to get ahead,' the fund manager fumed. 'Chalmers is burning the ladder while the boomers are at the top.'
Reaction from Business Community
Mr Wilson described the changes as a declaration of war on small business and start-ups. 'Entrepreneurs building real companies, creating jobs, taking risks are now facing double the tax on success,' he continued. 'Shares, businesses, farms will all get hammered. Australia doesn't have a revenue problem. We have a productivity and aspiration problem. This pure tax grab kills the next generation of Australians.'
In a follow-up post, Mr Wilson described the proposed reforms as a direct assault on aspiration, risk-taking, and wealth creation. 'The hypocrisy is breathtaking. Boomers and Gen X built wealth under the 50 per cent discount for decades. Now the government is pulling up the ladder and calling it progress. This is intergenerational betrayal, not equity.'
He described the proposed stance as short-term political cynicism which will cause devastating long-term damage. 'Australia doesn't need more tax grabs. We need productivity, innovation, and incentives for private investment. This policy will drive capital into the family home, term deposits, or offshore, anywhere except productive Australian businesses. Short-term political cynicism with devastating long-term damage. A betrayal of the next generation's chance to get ahead.'
Mr Wilson doubled down on his tirade on Wednesday. 'Punishing success has never created prosperity. Young Australians building real wealth are about to get absolutely fleeced by Anthony Albanese and Jim Chalmers. They want to double the tax on your life's work. This isn't 'fairness'. It's a brutal raid on every Australian trying to build real wealth.'
Expert Concerns
Mr Wilson's concerns were echoed by leading finance expert Julian Finch. The Sydney-based Finch Financial Services owner slammed the government's narrative of helping younger Australians as a smokescreen. He warned that millennials and younger Australians risk losing key wealth-building advantages, forcing them to work until they're 90.
'They will not get the same opportunities that older Australians profited from,' Mr Finch told Daily Mail. 'They could be working until the day they die. It is nonsensical. The government talks about intergenerational equity, yet takes away the advantages that older Australians benefited from.'
Mr Finch warned that any attempt to reduce or remove CGT concessions risks being a short-term political decision with long-term consequences. 'There is a clear attempt to appeal to voters who are frustrated with housing affordability. However, those same voters are the ones who will be impacted down the track when they try to build wealth.'
'For decades, Australians have relied on property as a long-term wealth and retirement strategy. In 10 to 15 years, millennials will be the ones relying on these investments, just as baby boomers do today. If we undermine investor confidence now, we risk weakening one of the key pathways Australians have used to build financial security.'
Mr Finch added that speculation about reducing and tightening of CGT concessions has created uncertainty that is already influencing investor behaviour and affecting all property sales across the country. He had this advice for Gen Z Australians: 'If you plan to invest in property, if you plan to build a retirement fund, you should be very concerned about changes to CGT. Do not support changes that will hurt you later. You are the future investors and you will want every tax advantage available.'
