What is the Australian government’s proposed capital gains tax workaround for startups?

Treasurer Jim Chalmers announced that the federal government will soon release a policy position paper detailing a capital gains tax (CGT) workaround specifically for small and startup businesses.

Why are Australian startup founders anxious about the upcoming CGT changes?

Founders are concerned because the removal of the 50% CGT discount makes investing in or working for early-stage companies less financially rewarding. Startups often have low or zero cost bases and use equity or equity-like incentives to attract global talent.

When will the government's startup CGT carveout take effect?

The final implementation is not expected until closer to December, around the release of the Mid-Year Economic and Fiscal Outlook (MYEFO). While the government wants its core CGT changes passed by the end of June, the specific startup workaround will be delayed.

How does the legislative timeline affect the risk profile for tech sector investors?

Uncertainty will remain high in the short term because the startup carveout is excluded from the first tranche of legislation. Investors face a regulatory gap where the broad CGT discount cuts could pass in June, but the specific startup exemptions won't be debated until August at the earliest.

What are the key bull and bear points for the Australian tech sector following this news?

The bull case is that the government explicitly acknowledges the unique needs of small businesses and is actively planning a targeted concession. The bear case is that the relief is being delayed, creating a period of policy limbo that could freeze early-stage funding.

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Chalmers to imminently unveil startup CGT workaround

Written by Mahathir BayenaPublished Jun 11, 2026, 6:14 AM

Treasurer Jim Chalmers is poised to imminently unveil a targeted capital gains tax workaround for the startup sector, rushing to soothe industry anxiety triggered by last month's budget.

Addressing the Morgan Stanley Australia Summit on June 11, Chalmers confirmed the government will "shortly" publish a policy position paper to seek industry feedback, fulfilling private and public budget commitments.

The move comes as Labor faces intense pressure from founders who rely heavily on the 50% CGT discount to attract global talent and offset high-risk ventures.

While the government aims to ram through its core CGT changes by the end of June, sources close to the discussions reveal that the startup carveout will not feature in the first tranche of legislation.

Instead, the mechanism is expected to be deferred to a second legislative package.

Given federal parliament’s upcoming midwinter recess, debate on the specific startup framework will be delayed until August at the earliest.

Industry insiders do not expect the final measures to come into effect until closer to December’s mid-year economic and fiscal outlook.

"We do recognise there are some specific issues for small and startup businesses with low or zero cost base, and we have been engaged in targeted consultation," Chalmers said, defending the timeline by noting that consultation had been ongoing since before the budget.