Andrew McKellar interview on ABC News 24 about CGT changes
Transcript: 28 May 2026
Kathryn Robinson:
Andrew McKellar, CEO of the Australian Chamber of Commerce and Industry. Good morning to you.
Andrew McKellar:
Good morning, Kath. Great to be with you.
Kathryn Robinson:
So we just heard the Treasurer there introducing those tax bill reforms there to the parliament. What consultation have you had with the government in the lead up to this?
Andrew McKellar:
Well, obviously this was something of a surprise in the context of the budget, which was announced two weeks ago. I mean, there had been some foreshadowing that there would be potentially some changes to CGT and other measures, but obviously it wasn't canvased in its full detail before the budget. Since then I think on a day-by-day basis, we've had more and more businesses coming to us saying, "What does it mean? Can you explain? How is this going to impact us? Is this going to mean that we pay more tax on the investments that we're making?" I think government has increasingly been aware that those questions are being asked and we are having discussions with government. I think that's a good thing. So we want those discussions to go forward. The bill today is a high level bill. There's more detail to come and I think it's very important that we work through those details with government to ensure that there isn't an adverse impact on the level of investment.
That's going to be very hard to manage, but we don't want to see investment going backwards in this country.
Kathryn Robinson:
And so is that the biggest sticking point for the Australian Chamber of Commerce and industry?
Andrew McKellar:
The biggest sticking point for us is that for many investors, so whether you're a small, medium, or large sized business, and it doesn't matter which sector you're in, this is not just a tech sector issue. It's not just a startup issue. If you've got a low cost base, there's a broader range of impacts where this will result in a higher level of taxation on business investment. And that's not something that's going to be good for the economy. If we want to boost productivity, if we want to create a culture of enterprise have more successful businesses being homegrown in Australia, creating jobs and opportunities for Australians, then we're not going to achieve that by increasing the level of capital gains tax on those businesses.
Kathryn Robinson:
Well, as we just heard from the Treasurer, and we also heard it from the Assistant Treasurer this morning, that is that it's about distortion. So if you only apply it to on part of the economy, you're going to be creating distortions elsewhere. So no carve outs, therefore no distortion.
Andrew McKellar:
I mean, that's all very well in theory. The reality is if you increase a tax on any kind of investment, and let's reflect that the problem they said they were trying to fix here was housing affordability. They wanted to reduce the level of investment in passive established housing, take some of the pressure out of that part of the market, but they've done so by increasing in effect for many businesses the level of tax that they're going to pay on their investments. So it might be one size fits all, but it'll have the same impact across many parts of the economy and that's a negative thing. And I think if this was part of a broader set of tax reforms, if the government had announced that they were cutting the company tax rate to 25 per cent or they were putting in place a broader investment allowance, or they were cutting the marginal tax rates on personal income as part of a broader reform.
And I think people would've said pluses, minuses, that's okay. At the end of the day, that's all fair and reasonable, but they haven't done that. This is a one-off set of measures. There's very limited upside, a couple of small measures that have been announced that really apply to small business, but it's not a comprehensive tax reform by any measure.
Kathryn Robinson:
Did I get a hint of optimism from you, Andrew, when saying that this is being introduced at a very high level and the specifics of that might come as the government pointed out, that is what has happened in the past with say GST reform, et cetera. Are you confident that despite this being introduced to parliament today, you might get some of the changes that you are after in the ensuing days?
Andrew McKellar:
Oh, look, I'm always optimistic, but I'm also not naive. And look, I think here we've got to have those discussions with government. I think one of the things that the bills are being introduced today, we urge the Senate to do its job and part of its job, I think, is holding the government to account here. So I think a full and open Senate inquiry into this legislation which shouldn't be rushed through. We should take the time with this legislation to make sure that that detail is right and that the broad principles are also right. So I think there's a lot of water to go under the bridge. We want to play a constructive role in that discussion, but we don't want to have a piecemeal solution to what is a very complex problem.
Kathryn Robinson:
With respect to how it will impact across businesses, you're suggesting, the Prime Minister said that only 10 per cent of small business would be affected because they would qualify for one of four concessions that apply for businesses with turnovers under two million.
Andrew McKellar:
I think to clarify that there are some exemptions in the existing application of capital gains tax and in what we saw before the Treasurer referred to that. But
the criteria to qualify for those exemptions is quite restrictive and the way in which those exemptions apply is also very restrictive. And in most cases, it's really about you've got to have held an asset for 15 years or longer. If you're over 55, if you're looking to retire, you're looking to get out of your business, then you qualify for some of those exemptions. So we want to see something that applies a single definition for small business at the moment. For those exemptions, it's a turnover of two million or less. In most cases, the tax office has a definition of turnover of 10 million or less. So that's a starting point, but honestly, I don't think that's going to be good enough. We've got medium-sized businesses, larger businesses. We've got impacts across a whole range of industries. We've got to look at what the impacts are there.
I don't think it's going to be satisfactory just to try and carve out some small areas.
Kathryn Robinson:
And very briefly, Andrew, if I just may, because we are almost out of time, if legislated in the current form, what will happen to businesses that you look after at the Australian Chamber of Commerce and industry?
Andrew McKellar:
That's the most important question and our concern is that the level of business investment will be curtailed as a result. And that's the last thing that we need if we're going to make the Australian economy perform as it needs to in the future.
Kathryn Robinson:
Andrew McKellar, CEO of the Australian Chamber of Commerce and Industry. Many, thanks for your time today.
Andrew McKellar:
Thanks, Kath.