Andrew McKellar interview on Sky News on business tax changes
Transcript: 27 May 2026
Kieran Gilbert:
Live in the studio is Chief Executive of the Australian Chamber of Commerce and Industry. Andrew McKellar. Andrew, thanks for your time. The Prime Minister referenced your organisation yesterday, says negotiations are continuing with the business community on the capital gains tax changes. Where are they at in your view?
Andrew McKellar:
We certainly appreciate, I mean, we are having discussions. Government is consulting and that includes with us. I think those discussions I think are very professional and we appreciate the fact that government is now reaching out. Our concern is that you cannot fix the impact of what's been proposed, particularly the CGT changes, capital gains, tax changes, simply by making a few changes at the margin, trying to find something that just applies to startups or just applies to small business. The impact of this tax change will hit small, medium, and large businesses across every sector in the economy. It will mean that there will be higher tax on business investment across the board. And as a result of that, there will be less business investment than there otherwise would've been.
Kieran Gilbert:
Richard Holden from the University of New South Wales called it a tax on productivity when I spoke to him earlier. Do you agree with that?
Andrew McKellar:
Well, I do. I mean, fundamentally one of the things, if we go back to the productivity round table, the economic reform round table that was held in August last year, one of the key points that came out of that, we identified that we need to have more capital deepening in the economy. We need to lift the capital to labour ratio. If we're going to increase productivity, we need more business investment. You're not going to get more business investment by putting more tax on business investment. You're going to get the opposite. So it is a tax on productivity. We won't have the same growth in productivity that we need and that translates into jobs and higher income.
Kieran Gilbert:
So you're saying just stick with the property changes. If you want to do the capital gains tax change away from the 50 per cnt discount to inflation, peg it to inflation, leave it to property, but take it off the business sector.
Andrew McKellar:
Well, that's right.
Kieran Gilbert:
That's your message.
Andrew McKellar:
Oh, that's right. I mean, if the government is saying, "What is the problem you are trying to fix?" They are saying that their focus is on housing affordability and their concern is the interaction between the capital gains tax discount and the negative gearing regime and the impact that that's having on housing affordability. So if it's those two things and you think that's going to make a difference, then focus your change on residential, existing residential investment, not expanding that to all areas of business, whatever sector it's in, whether you're a startup, whether you're a small business, a medium sized business, no matter what industry you're in, this is going to have an impact. We would say focus it there. If this was a balanced reform package, if we were talking about changes to the company tax rate or if we were talking about changes to the marginal income tax rates, if there was a broader investment allowance, then that would be comprehensive tax reform and there would be some swings and roundabouts.
There is not that in this particular package.
Kieran Gilbert:
Did you see this more as just a tax grab?
Andrew McKellar:
I think in net terms it is. Look, there are some things that are beneficial, but they're quite small and they're quite focused. So the instant asset write off for small business has limited application. It is something of value, but it doesn't in any way offset the broader impact of this capital.
Kieran Gilbert:
The loss carryback?
Andrew McKellar:
And also loss carryback. So those two things, but combined, they pale into insignificance by comparison with the overall impact that these changes will have. And then of course, further down the track, we've got the changes to trusts. That is a whole new can of worms, which we haven't even start to open that up at this point.
Kieran Gilbert:
So that's another challenge down the track, but would you expect the government obviously wants to undertake some significant reform. They're saying they're removing distortions from the system. You're saying in doing that, you're going to reduce economic growth.
Andrew McKellar:
Ah, that will be the consequence. So you put more tax on investment, there'll be less investment.That's simple economics.
Kieran Gilbert:
And if we can just get the binoculars out for when they do go to legislate the trust changes, is there anything in that that is acceptable in your view or what needs to happen to make that palatable from a business community sense?
Andrew McKellar:
Again, we're not saying that there shouldn't be reform. We do need to have reform and nobody's saying that trusts shouldn't be looked at in that holistic approach. But the problem here is it's one out and it's only addressing one particular part of the business tax equation. So we don't think that this is comprehensive tax reform and coming in and making those changes in areas where there are small businesses that are structured around family trusts in almost every housing constructor in Australia, many, many pharmacies, news agents, retail, restaurants and cafes, that they're all going to be structured around trusts and it really impacts then how the family manages those business operates.
Kieran Gilbert:
And so your message finally when it comes to that legislation tomorrow, you're saying pause it?
Andrew McKellar:
Well, we're saying pause it. At a minimum, really, we want to see the Senate do its work and have a very proper inquiry into that and we want to see the evidence called we're urging the government to be flexible. We really think they should go back to the drawing board, focus on the problem you are trying to solve, not on trying to create problems in other areas where we just don't need them.
Kieran Gilbert:
Chamber of Commerce and Industry Chief Andrew McKellar great to see you. Thanks.
Andrew McKellar:
Thanks,