Paul Keating has dismissed claims from the Coalition and the startup sector that Labor’s capital gains tax reforms will undermine entrepreneurship, describing the changes as “marginal” and badly needed to improve housing affordability.
The former Labor prime minister criticised John Howard and Peter Costello for introducing the 50 per cent capital gains tax discount in 1999, which he said had inflated house prices from nine to 16 times the average household income, benefiting the wealthy at the expense of wage earners.
Keating argued that income is overtaxed while capital is undertaxed, a distortion that has disadvantaged a whole generation in terms of housing affordability. He pointed to the success of tech companies like Canva to argue that “punters with a big idea won’t be put off by some marginal change to the tax rate”.
The proposed changes would replace the 50 per cent discount with a cost-base indexation model and a minimum 30 per cent tax rate. They have been strongly opposed by some tech founders, but Keating insisted the reform was minor.
Prime Minister Anthony Albanese defended the reforms as fair, blaming misinformation for the backlash. However, shadow treasurer Tim Wilson warned Labor’s budget would kill the startup sector, and opposition leader Angus Taylor pledged to oppose and repeal the measures. NSW Premier Chris Minns also criticised the government for failing to address bracket creep.
