CGT tax changes could make it harder to raise funding in Australia, says AI founder | The Business
The Treasurer has introduced the government’s controversial tax laws into parliament and if passed, they will see the replacement of the 50 per cent capital gains tax discount with indexation, end negative gearing on housing investment, except new builds, and deliver a modest tax cut for wage earners.
Dr Tom Kelly is the founder of AI company Heidi Health, which is valued at around $700 million. He joined The Business to discuss how the changes will impact small business and startups. Heidi has raised $100 million so far. Tom Kelly says in Australia, superannuation funds allocate investment to venture capital, which then invests in startups and tech firms. He says that pool of money could shrink if these tax changes go ahead in their current form.
“I think there’ll be less money going to tech if the CGT doesn’t have some sort of carve out for tech or doesn’t address these different issues with precision,” he said.
The Treasurer is consulting with the startup sector and has not explicitly ruled out carve outs. Dr Tom Kelly says: “We’ve been part of a consortium actively having conversations with government and I think they’ve shown a good interest to engage with the sector.”
There are already concessions for 90 per cent of small businesses, those with turnover of under $2 million and assets under $6 million. The much contested bill will now face a three-week Senate inquiry.
The Treasury Secretary, Jenny Wilkinson, was out spruiking the changes at a post-budget Australian Business Economists lunch in Sydney, which Business Editor Michael Janda attended.
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