What are the proposed capital gains tax (CGT) changes in the Australian 2026 federal budget?

The Albanese government's 2026 budget proposes abolishing the 50% capital gains tax discount and returning to an indexation system.

Why is the tech and venture capital sector pushing back against the CGT overhaul?

Startups and venture capitalists argue that removing the 50% CGT discount will make Australia the worst nation in the developed world for startup equity.

How is Treasurer Jim Chalmers responding to the tech sector's concerns over CGT?

Treasurer Jim Chalmers has flagged that the federal government may grant tailored exemptions or special consideration to startups and venture capital.

Who is the Australian government consulting with regarding potential startup CGT exemptions?

The federal government is engaged in formal consultations with the Tech Council of Australia and the Australian Investment Council. These ongoing discussions, which were explicitly noted in the budget papers, aim to address industry pushback before the tax implementation is finalised.

How much revenue does the Australian government expect to raise from the CGT and negative gearing changes?

The revenue package is projected to raise just over $40 billion each from the CGT and negative gearing overhauls over a 10-year period. Treasurer Chalmers maintains that the overall tax package remains broadly budget-neutral due to offsetting tax cuts for workers and businesses.

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Chalmers flags CGT relief for Australian startups

Written by Isaac FrancisPublished May. 17 2026Last Updated May. 17 2026

Treasurer Jim Chalmers has delivered his strongest signal yet that the startup and venture capital sectors may receive tailored exemptions from the controversial capital gains tax overhaul announced in the Albanese government’s 2026 budget.

Speaking on ABC’s Insiders on May 17, Chalmers confirmed the federal government is actively engaged in formal consultations with the Tech Council of Australia and the Australian Investment Council.

The discussions aim to address fierce industry pushback regarding the abolition of the 50% CGT discount and the return to indexation.

Founders have warned the changes could make Australia the worst nation in the developed world for startup equity, threatening employee share option plans and risking a mass exodus of tech talent offshore.

"We do recognise that startups and venture capital, and particularly the tech sector, have got a different kind of cost-base calculation," Chalmers stated, noting that ongoing implementation discussions were explicitly flagged in the budget papers.

While defending the broader policy as a vital measure to eliminate market distortions—arguing the previous system unfairly overcompensated established housing at the expense of shares—Chalmers emphasised a willingness to accommodate early-stage businesses.

Concurrently, the Treasurer rejected a counter-proposal from Shadow Treasurer Angus Taylor to index income tax thresholds.

Chalmers branded the Coalition's alternative as "irresponsible", claiming it would inject a quarter of a trillion dollars into national debt over the decade and exacerbate inflation.

In contrast, Chalmers maintained that Labor’s package, which projectively raises over $40 billion each from CGT and negative gearing changes over 10 years, remains broadly budget-neutral while delivering targeted tax relief.