Andrew McKellar doorstop at Parliament House
Transcript: 27 May 2026
Andrew McKellar:
Okay. Thanks very much. All right, well look, thanks for coming along today. We wanted to make a statement about the proposed tax changes that were announced in the budget and in particular those changes relating to capital gains tax. We're making a statement on behalf of ACCI and all states and territory Chambers of Commerce around Australia. And as each day goes by, more and more business stakeholders are contacting us and expressing concerns about the impact of the proposed capital gains tax changes that have been announced in the budget. It's clear that those changes will have an impact right across the board in all sectors and for small, medium and large businesses. So it's not restricted to issues of startups. It's not restricted to issues of the tech sector. It's not restricted to the impacts that we'll have on small business. All of those things are serious, but right across the board we are going to see impacts.
If the government's objective at the start of this process had been to undertake some measures that went to affordability issues and concerns about the level of investment in established residential housing, then that's something that could have been addressed directly. Unfortunately, the impact here is right across the broader...it applies to all types of investment. It obviously impacts the ability of any growing business to bring in new investment investors to seek new sources of funding. So whether that's their own equity that they want to put into the business, whether that's bringing a partner into the business, whether it's going to seek private equity more generally, whether it's floating on the stock market, there's going to be an impact. And it's not just domestic sources of investment. Obviously it impacts Australia's competitiveness as a destination for investment. We are urging the government to rethink, to pause. We know that they want to introduce legislation tomorrow.
We think they've got to address these impacts across the board. It won't be good enough to simply carve out one or two narrow areas. They have to look at this comprehensively. We want to see a transparent process in the parliament. We urge the Senate to do its work to certainly to seek an inquiry, a public inquiry to bring forward the evidence. So right around Australia, there are more than four hundred and thirty local and regional chambers of commerce. They're going out talking to businesses in their local communities. We think that those businesses, those chambers of commerce, the state and territory chambers of commerce, the industry associations in every sector, they should have the opportunity to present the evidence to the Senate about the adverse impacts on business investment that are likely to flow. Happy to take some questions.
Journalist:
Mr. McKellar, there's a proposal from COSBOA that they say would help mitigate some of this around lifting the threshold for what is a small business up to 10 million turnover. Does ACCI have a position on that suggestion?
Andrew McKellar:
Well, we would say that by itself, that doesn't go far enough and I think this is the very important thing. So we welcome the fact that COSBOA are bringing forward suggestions like that. And obviously we think that things do need to be considered in relation to small business clearly. We have multiple definitions of small business. The arrangements that apply to CGT for small business are different to those that the tax office applies. The fact that there's a $2 million turnover threshold there where everything else is 10 million, those things should be fixed. They should be fixed anyway. The Board of Taxation looked at those issues in 2019. They made recommendations. Those recommendations have not been acted upon, whether it's by this government or the previous government. So those things should be addressed, but by themselves, they're not enough. And I think this is where we would say business as a whole, let's stick together.
Let's ensure that we get an outcome across the board that we address all issues because if we don't, what we're going to see is the result of these policy changes will be that there will be more tax on business investment. That means there will be less business investment. That will be bad for productivity, that will be bad for competitiveness. It will be bad for the future growth of the Australian economy.
Journalist:
The government says it's followed the normal process leading up to the budget in terms of consultation. Can you characterise what that consultation was like?
Andrew McKellar:
Well, I think obviously in the lead up to the budget itself, they've gone through a process where that's been considered within government they've sought the advice of government agencies. There hasn't been here a broad ranging inquiry. So it hasn't been a process yet like the Henry review. It hasn't been a process where there's been public submissions or whether the government's brought forward a discussion paper or an options paper.
So we haven't seen any of that. All those options were available to government. They've chosen not to use those. Of course, the budget process acts under particular protocols and we understand those. Now, those decisions are out on the table. The government's proposing to bring legislation forward rather than consulting now on the scope of that legislation. They're seeking to bring in the first tranche tomorrow and to pass that quickly. We think there are fundamental issues with that headline legislation. Those need to be addressed. And that's one of the reasons we're urging the Senate to do its job. We're urging the Greens, the cross bench to set up an inquiry in the Senate, make it a full and proper inquiry process. And let's ventilate the issues that have been very clearly identified that are coming forward that we know that many members of the Labour Caucus are hearing from their own constituents out and around Australia, every electorate in Australia, anywhere where you've got a small business or medium sized business, whatever it might be, there's real concerns.
Journalist:
So what are the concessions that would need to be made to assuage your concerns exactly?
Andrew McKellar:
Well, look, I think at the fundamental level, what we think should be on the table is what is the problem that the government is trying to address? And they've articulated that they are concerned about housing affordability. They're concerned about the impact that measures like the capital gains tax discount and negative gearing in combination have had on the incentive for passive investment in established housing and real estate property. So that's where their concern is. So if they focused on that, they can be a very different situation.
Journalist:
So restricted to housing? All together, just.
Andrew McKellar:
Absolutely. I mean, our position is pull it back to that. You will not create stronger investment in Australia if you put more tax on business investment. There will be less business investment as a result of these changes than there otherwise would be. That was certainly not something that was in any way discussed or agreed or contemplated when we go back to the economic reform round table in August last year.
Journalist:
So just to clarify, you think the changes should only apply to housing, nothing else?
Andrew McKellar:
We think that would be. I mean, if that's the stated objective. I haven't heard the government say they want less business investment. They haven't come at this as a process with a comprehensive set of tax reforms. So if this was parcelled up with other changes, if we were cutting the company tax rate to 25 per cent, if we were addressing marginal tax rates on the income tax scales, if there was something else in terms of a broader business investment allowance, then there'd be swings and roundabouts. There'd be carrot and there'd be stick. This is all stick and no carrot, and that's the problem.
Journalist:
(Inaudible) ...been looked at by the government, you're saying none of them would be sufficient (it) needs to go.
Andrew McKellar:
Well, that's exactly right. So we're saying they don't address the fundamental problems. Of course, we want to see an improved outcome for small business. That should be part and parcel of what the government brings forward, but it by itself would not be sufficient to address the fundamental flaws in the budget announcement.
Journalist:
Do you mind if I get your thoughts ... Just on the Job Seeker announcement from what we know so far that's been reported this morning, your take on that and then also from a private sector perspective, how can it better collaborate or how can the government better collaborate with the private sector to make sure people on Job Seeker can get the work that they need?
Andrew McKellar:
Well, it's an important area. We welcome the fact that the minister's speaking shortly at the Press Club and obviously we want to see the detail of what's in her speech. I'll be rushing down there after this to make sure that I'm listening to her speech, but obviously this is an important area of reform. It's an area which has been, I think, crying out for fundamental reform for a long time, it's important to address that. Now, we'll be an active part of the process of consultation. And I think here's an example. This is a way to do reform. So start with a position paper or a discussion paper, go through that consultation.
(inaudible) …available in the labour market to keep them looking for active employment and also for employers then to identify what that pool of talent is that's out there that's available and to make sure that we can minimise the long-term impacts of dislocation in the labour market. We've been very fortunate in Australia to have a robust, resilient labour market for a long period of time. We're starting to see a little bit of a return to more normal circumstances where we don't have full employment in the labour market. That's why it's very important. If we're seeing the unemployment rate rising, it's important that we ensure that we're able to minimise the impact of that going forward.
Journalist:
Do you feel misled by the government if they've sprung this only given their talk of consensus, bringing them into the economic reform round table? Has this been out of spirit with their initial language of the relationship with business?
Andrew McKellar:
Look, I don't feel misled. I think the issue here is what's the impact of the change that's been proposed? And if we go back rewind to the economic reform round table in August last year, I mean, everyone went into that in good faith. There were good discussions and good options that were put on the table coming out of it. You review the comments and the Treasurer's characterization of what happened in that discussion, there were two things that he pointed to. One was trying to address what are seen as intergenerational inequities in the tax system. The other was the need to encourage stronger business investment. At no point, at no point was it discussed, that to encourage stronger business investment, we need more taxes on business investment and that wouldn't make sense. That clearly wasn't part of the discussion, that's one of the objectives. That's not what's come out of the budget in this context.
That's why we need to pause. That's why we need to stop and look at how we address those issues.
Journalist:
You said the issues with this budget weren't limited to startups and TCs. Would you accept that they face particular challenges?
Andrew McKellar:
Well, they do. They do face challenges, that's for sure. But so do businesses at a larger scale who are investing in active assets and if you want to attract capital into Australia, it's got to be competitive. And our concern is that out of all of this, we won't have the same level of competitiveness in terms of whether to attract the business investment domestically from within Australia or whether it's seeking to get investment coming in from offshore into active assets that are impacted by capital gains tax. Obviously it'll go much further when we look at the trust changes that are proposed as well. And look, that's something that again, is going to be a huge issue.
Whether you're looking at almost every housing builder in Australia, whether you're looking at pharmacies, whether you're looking at cafes and restaurants around Australia family businesses, they're all going to be impacted. Obviously that'll be the next layer of detail that needs to be looked at when that legislation comes forward and we just urge the government to start to think about how that's going to impact as well.
Thanks very much everyone. Thank you