Nicolette Boele (Bradfield, Independent) Share this | Link to this | Hansard source

There's broad support in my electorate for tax changes to fix the broken housing market. People understand that capital gains tax and negative gearing rules have priced out young people for their first home, and that needs to change. But many have also raised concerns about the government's planned reforms disincentivising investments in startups and small businesses. I've surveyed my constituents about this, and three in four respondents supported CGT carve-outs for founders, recognising that passive property gains and active business gains are different. But beyond the startup and tech sector, I've also heard from small-business owners who have put in years of hard work, often forgoing salaries and super, with the expectation that their business would support their retirement. While existing small-business CGT concessions will remain, there are 175,000 small businesses that won't be eligible. These larger small businesses do a lot of heavy lifting on productivity and employment.

Thankfully, there's a simple tweak that could go a long way. Lifting the eligibility threshold for the small-business CGT concessions from $2 million in annual turnover to $10 million would cover all small businesses and align the concessions with the ATO's definition of small business. The government is undertaking consultation on this issue, and I welcome their willingness to engage. I urge them not to rush but ensure that these important reforms work for young people and a productive economy.

Claire Clutterham (Sturt, Australian Labor Party) Share this | Link to this | Hansard source

Measures in the federal budget with respect to tax incentives for venture capital reflect this government's understanding that we need to create an investment climate which encourages more capital to come into this country and which rewards innovation and risk taking. The budget seeks to improve the early-stage venture capital limited partnership and venture capital limited partnership tax incentives by adjusting for inflation and increasing caps on investee business assets and maximum fund sizes. This measure is getting lost in the noise, but we need to shout about it because it is a measure that directly encourages venture capital investment in Australian businesses.

Tax concessions will be available where early-stage venture capital limited partnerships invest in businesses with assets up to $80 million at the time of investment. This is up from the $50 million asset cap set in 2007. Investors may be able to access tax concessions with respect to investee businesses with assets up to $420 million, up from the $250 million cap set 20 years ago. Tax concessions will be available where venture capital limited partnerships invest in businesses with assets up to $480 million at the time of investment, up from $250 million set in 2002. The budget significantly increases these thresholds that have constrained these programs for over two decades. It deliberately encourages the type of private equity environment we need in this country and supports startups and early-stage companies.