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In this episode of DBrief, Dr. Jeff Wilson speaks with Innes Willox, CEO of Australian Industry Group, about the Federal Budget’s capital gains tax changes and what they mean for investment and the economy.

They discuss how these proposals have dominated the budget narrative, despite a range of positive business measures on tax, investment and regulation. The conversation traces how the changes emerged outside earlier reform discussions and why they have prompted such a strong response from industry.

They also explore the impact on businesses in practical terms, from the treatment of long‑term investments and the role of risk in capital allocation, through to the implications for startups, small businesses and larger firms. Particular attention is given to concerns around complexity, retrospective application and the potential for changes in investment behaviour both domestically and internationally.

The episode also considers what this moment reveals about the broader tax system — including its complexity, structural weaknesses and the challenges of delivering meaningful reform — as the debate continues in Parliament.

Key takeaways

• The budget included several business‑supportive measures, but these have been overshadowed by the proposed capital gains tax changes.
• The capital gains measures were not a central part of earlier reform discussions, contributing to uncertainty and strong reactions from industry.
• The changes may alter investment decisions, particularly in relation to risk‑taking, long‑term capital allocation and startup activity.
• Retrospective elements and increased complexity are key concerns for businesses navigating the new framework.
• The current approach highlights ongoing structural challenges in Australia’s tax system, including reliance on income taxes and system-wide complexity.
• Effective tax reform requires coordinated, whole‑of‑system design rather than isolated policy changes.
• Confidence in reform depends on consultation, transparency and rigorous policy development processes.
• The outcome of the current debate may influence how future governments approach tax reform in Australia.

Contact the Industry Development & Policy team here.