What are the proposed changes to Australia's capital gains tax regime?

The Albanese Labor government plans to remove the 50% capital gains tax discount on investments outside of residential property. Starting July 1, 2027, the discount will be replaced with an inflation-adjusted indexation model alongside a minimum 30% tax rate on realised gains.

Why are Australian start-ups and small businesses worried about the CGT overhaul?

Sector leaders warn the changes will trigger severe capital flight and a tech brain drain to lower-tax jurisdictions. Start-ups rely heavily on attracting talent and early-stage seed investment via future equity upside, which will face higher tax burdens under the new 30% minimum rate.

How is New Zealand positioning itself to capitalised on Australia's tax changes?

New Zealand currently has no capital gains tax regime and is actively pitching its business environment to Australian entrepreneurs. Finance Minister Nicola Willis has publicly invited Australian founders to set up shop across the Tasman, highlighting their zero-CGT policy, accelerated depreciation, and simpler tax system.

What real-world impacts are Australian tech companies already reporting from the tax uncertainty?

Melbourne-based biotech firm Oktopi reported that uncertainty around the CGT changes has already forced them to pause talks to repatriate two senior Australian biotechnology leaders from Europe and the US. Management noted that founders and early investors will easily choose domiciles like Singapore or Auckland over an uncompetitive Australian market.

How could the proposed CGT changes affect employee share options and talent acquisition?

Executive search firm Tier One People warned the reforms will hinder Australia's ability to attract international fintech and tech executives. Because equity and option structures form a massive part of total compensation packages, a higher CGT rate drastically reduces the after-tax proceeds for staff holding long-term options.

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New Zealand lures Aussie firms amid CGT backlash

Written by Liezl GambePublished Jun 8, 2026, 3:58 AM

Start-ups, small businesses, and investment fund managers are warning of a major brain drain and capital flight to New Zealand if the Albanese government proceeds with its overhaul of the capital gains tax.

In submissions to a Senate enquiry, sector leaders cautioned that Labor’s plan to remove the 50% CGT discount on non-residential investments—replacing it with inflation-adjusted indexation and a minimum 30% rate from July 2027—will severely damage Australia’s global competitiveness.

The warning coincides with efforts by New Zealand’s centre-right leader, Christopher Luxon, and Finance Minister, Nicola Willis, to actively lure Australian entrepreneurs across the Tasman by promoting their own zero-CGT, pro-growth economy.

Shadow Treasurer Tim Wilson accused Prime Minister Anthony Albanese of handing Australia’s future prosperity to New Zealand "on a platter" after Luxon labelled a capital gains tax an economic "wrecking ball".

Craig Rayner, CEO of Melbourne biotech firm Oktopi, stated that tax uncertainty has already paused talks to repatriate senior Australian leaders from Europe and the US, noting that a high tax rate on an industry that flees the country "raises nothing".

Meanwhile, executive search firm Tier One People warned the reforms will hinder Australia's ability to attract top fintech talent who rely on equity-weighted compensation.

While Employment Minister Amanda Rishworth defended the policy as ensuring a "fair go" for workers and homebuyers, the legislation remains deadlocked in the Senate.

The government is rushing to pass the changes before July 2 amidst allegations from the Coalition of avoiding proper scrutiny.