Labor government adjusts capital gains tax reforms amid backlash
Consensus Summary
The Australian Labor government announced significant adjustments to its capital gains tax (CGT) reforms on June 18, 2026, following weeks of criticism from business groups, opposition parties, and public backlash. Key changes include raising the small business turnover threshold for CGT concessions from $2 million to $10 million, exempting all testamentary trusts from a proposed 30% minimum tax, and introducing a special 50% discount for innovative startups. These concessions, costing $475 million over the forward estimates, were framed as responses to 'scare campaigns' and concerns about stifling growth, particularly among startups and small businesses. The government also reduced Treasurer Jim Chalmers’ discretionary powers to define asset classes and new home builds, addressing concerns raised by Greens Senator Nick McKim. Opposition Leader Angus Taylor dismissed the changes as insufficient, calling for the entire budget to be scrapped, while the Greens remained skeptical, arguing the reforms did not go far enough to address the housing crisis. The adjustments aim to secure passage through the Senate, where the Greens hold the balance of power, but negotiations remain tense as parliament prepares to rise on July 2.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- The annual turnover threshold for small business CGT concessions increased from $2 million to $10 million, benefiting 2.7 million businesses
- The government introduced a special 50% CGT discount for 'innovative' startups, with details to be finalized via consultation
- All discretionary testamentary trusts (including future ones) were exempted from the proposed 30% minimum tax, addressing 'death tax' accusations
- The changes cost the budget $475 million over the forward estimates, while the full tax package is expected to raise $8.1 billion
- Jim Chalmers reduced his discretionary powers to define asset classes and new home builds in the legislation
- The reforms were announced on June 18, 2026, following weeks of sustained criticism from business groups and opposition
- The original proposal replaced the 50% CGT discount with inflation-linked indexation, raising concerns for startups with negligible cost bases
- Greens Senator Nick McKim had warned about potential misuse of ministerial discretion in future tax laws
- Opposition Leader Angus Taylor called for the entire budget to be scrapped, saying the government 'got it wrong from the start'
Points of Difference
Details reported by only one source:
- The backdown was framed as a test of Labor’s commitment to 'hard policy reform' despite avoiding confrontation historically
- The Greens leader Larissa Waters called the changes 'tinkering around the edges' and criticized the government for not being 'braver' on housing
- The article mentions a Senate inquiry report due to be tabled on June 20, 2026, setting the scene for tense negotiations before parliament rises on July 2
- The opposition weaponized the testamentary trust changes as a 'death tax' in false allegations, according to the government
- Tech Council of Australia welcomed the startup concessions, calling it a 'constructive response' that rewards 'productive risk-taking'
- Council of Small Business Organisations Australia CEO Skye Cappuccio said the changes were 'welcome but did not go far enough'
- National Farmers Federation President Hamish McIntyre praised the trust taxation changes as 'meaningful for farmers'
- The ABC article explicitly states the government aims to progress its legislation in the 'next fortnight' (by June 30, 2026)
- The article includes a quote from Jim Chalmers: 'We understand that there’s never a unanimous view about economic reform... it will be worth it'
- The article notes One Nation has taken over as the 'nation’s most popular party' during the budget backlash
- Albanese insisted house prices would continue to rise but at a 'slower pace' due to the reforms
- The article references a 'Resolve Political Monitor' (unspecified) during the budget turmoil
Contradictions
Conflicting information between sources:
- The Guardian and SMH describe the changes as 'tweaks' or 'adjustments,' while The Age and ABC frame them as 'winding back tax hikes,' suggesting differing interpretations of the scale of concessions
- The Guardian and SMH emphasize the $475 million cost as a 'small sum' relative to the $8.1 billion raised, while The Age and ABC do not explicitly contextualize the cost in the same way
- The Guardian mentions a 'viral meme campaign from entrepreneurs' as a key factor in the backdown, but no other source references this specific detail
- The ABC and The Age quote Albanese saying the feedback on the budget has been 'positive,' while the Guardian and SMH highlight sustained criticism and backlash as the primary driver for changes
- The Guardian notes the Greens could 'stall the entire process' if they accept a Coalition offer to delay the tax bills, but no other source explicitly mentions this negotiation tactic
Source Articles
The CGT ‘backflip’ is more tweak than transformation. Labor hasn’t changed its mind on housing
Do the concessions undermine the original objective of helping young Australians buy their own home? No Get our breaking news email , free app or daily news podcast The noise, negative headlines and internet memes that have surrounded Labor’s capital gains tax changes since their budget night unveiling made a backdown feel like an inevitability. It wasn’t a question of if concessions would be offered but rather when and, most importantly, how much they might undermine the original purpose. Conti
Chalmers winds back ministerial powers in bid to clear CGT Senate hurdle
Businesses with turnover of up to $10 million will be able to claim 50 per cent off their capital gains tax.
Afternoon Update: CGT exemptions for small business; ebike thefts soar; and Australia’s top university named
Want to get this in your inbox every weekday? Sign up for the Afternoon Update here , and start your day with our Morning Mail newsletter . Good afternoon. Anthony Albanese has announced bigger capital gains tax exemptions for all of Australia’s 2.7m small businesses. Startups and testamentary trusts are also set to receive carve outs from the government’s contentious tax reforms. New phone evidence halts inquest into Melbourne influencer’s death following freebirth ‘I wish it hit me’: Sydney mo
Albanese announces ‘generous’ capital gains tax exemptions for small businesses after budget backlash
Startups and testamentary trusts to receive carve outs after criticism of Labor’s CGT changes Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast All of Australia’s 2.7m small businesses will receive “generous” exemptions from capital gains tax, as Anthony Albanese flagged startups and testamentary trusts would receive carve outs from the government’s contentious tax reforms. The prime minister’s announcement on Thursday follows wee
Breaking: Albanese, Chalmers unveil capital gains carve-outs for small businesses, startups
The federal government has consulted with small businesses and startups over contentious elements of its budget tax proposal.
Albanese winds back tax hikes for small businesses, start-ups, testamentary trusts
Businesses with turnover of up to $10 million will be able to claim 50 per cent off their capital gains tax.