Australia's four major peak business organisations have jointly called on Parliament to reject the Federal Government's proposed capital gains tax (CGT) changes, arguing the legislation will discourage investment and has been progressed without adequate consultation or economic analysis.
In a joint statement, the Australian Chamber of Commerce and Industry, the Australian Industry Group, the Council of Small Business Organisations Australia, and the Business Council of Australia said they strongly oppose the proposed changes and called on Parliament to reject what they described as "rushed legislation."
"At a time of growing global competition, Australia cannot afford policies that make us a less attractive investment destination," the groups said in the statement. "Instead, we should be competing to attract the capital our projects and businesses need to grow the economy and fund the services Australians rely on."
The statement said the changes, if passed, would affect businesses of every size, "from companies investing in major projects to small and family-run businesses seeking to grow, create jobs and support their local communities."
Under the proposed reforms outlined on the Federal Government's Budget 2026–27 website, the current 50 per cent CGT discount would be replaced with a discount based on inflation, alongside a new minimum 30 per cent tax on gains. The Government states the reform is intended to ensure investors only pay tax on their real capital gain, restoring the original intent of the CGT arrangements.
The changes would apply only to gains arising after July 1, 2027, and investors in new builds would be able to choose between the existing 50 per cent discount and the new arrangements.
Separately, the Budget papers outline a minimum tax of 30 per cent on discretionary trusts from July 1, 2028, with some exceptions, alongside rollover relief for three years from 1 July 2027 to assist small businesses and others seeking to restructure.
As well as opposing the changes, the business groups argued there was no need to fast-track the CGT legislation given the changes are not due to take effect until July 1, 2027.
"The speed of this process raises serious concerns about whether any genuine economic impact analysis has been conducted," the statement said.
The groups also pointed to last year's Government-convened Economic Reform Roundtable, which they said they joined “in good faith” to examine broad reform aimed at lifting productivity and making Australia more competitive.
They argued the approach taken in the current legislation was fundamentally inconsistent with that process and its objectives.
The statement called on Parliament not to proceed with the legislation in its current form and urged the Government to consult further with the business community. The groups argued tax reform should be considered holistically, accounting for the interaction between personal, company, consumption and state taxes as part of a long-term plan, rather than through what they called "ad hoc changes.”
"The right tax settings encourage investment and innovation, drive productivity and deliver higher living standards for current and future generations," the statement said. "We stand ready to work with the Government to get there."
For small businesses specifically, an explainer on the Budget 2026-27 website states that the four existing small business CGT concessions will remain in place, with more than 90 per cent of active businesses expected to continue to be eligible.
The explainer notes the new rules are entirely prospective, with business value accumulated before July 1, 2027 retaining access to the existing 50 per cent discount regardless of when the asset is eventually sold.
The document also addresses the treatment of small businesses operated through a discretionary trust structure, to which a new 30 per cent minimum tax will apply at the trustee level from July 1, 2028. The explainer states that more than 90 per cent of Australia's 2.7 million active small businesses are not expected to be affected by this measure in any given year, and that around 350,000 active small businesses operated through a discretionary trust in 2022–23, of which about 40 per cent are not expected to pay additional tax or need to restructure.
Primary production income, discretionary testamentary trusts existing at the time of the announcement, and fixed trusts are exempt from the new minimum tax.
The explainer also confirms that small businesses wishing to restructure out of a discretionary trust into a company or fixed trust will have access to rollover relief for three years from July 1, 2027, which it states will provide relief from income tax and CGT consequences arising from the restructure.
From January 1, 2027, the Australian Small Business and Family Enterprise Ombudsman will be available to help small businesses understand their options, and the Australian Securities and Investments Commission is putting arrangements in place to support small businesses that wish to incorporate.