Government’s business tax grab will hurt productivity

Media Release: 10 June 2026

Increasing the capital gains tax (CGT) on investment in businesses will have a significant and sustained negative impact on investment and slow productivity growth, the Australian Chamber of Commerce and Industry (ACCI) says.

In its submission to the Senate Economics Legislation Committee, ACCI says the government has failed to explain why it is targeting business investment in its policy aimed at investment in established property.

“The government readily explains why it wants to tax investment in established property, but nowhere has the government explained why it is a good thing to put a new penalty on investment in business,” ACCI Chief of Policy and Advocacy David Alexander said.

“The same CGT penalty that will see fewer investors turning up to house auctions will also see fewer investors turning up to invest in businesses,” Mr Alexander said. 

“The legislation fails to recognise the importance of capital gains incentives for the ongoing health of small and medium-sized businesses, where owners often sacrifice current income for later returns.”

ACCI’s submission argues the 50 per cent CGT discount should be retained for the sale of businesses, shares, and the distribution of capital gains from managed funds.

Mr Alexander said the explanatory memorandum on the legislation makes no mention of the impact on business owners or how the changes will affect business investment.

“Such consequential legislation should not be rushed through Parliament without proper consultation or a clear understanding of the consequences,” Mr Alexander said.

“The decision to legislate in a rush and work out how to minimise the damage to certain sectors afterwards is an obviously flawed policy-making process.

“These changes will influence decisions to start, expand or restructure a business, and over time, will slow investment and weaken productivity growth.” 

“Tax reform should be on the table, but the government is mistaken if it thinks reform requires higher taxes on business investment, when in fact tax settings need to support investment.” 

Read ACCI’s submission