Prime Minister Anthony Albanese and Treasurer Jim Chalmers announced a package of last-minute capital gains tax concessions at a Sydney press conference on June 18[1]Tax reform implementation for small business and startups“The Albanese Government is today announcing further implementation details for its tax reform package, following an intensive first round of post-Budget consultation.”, weeks after their legislation cleared the lower house with just two days of debate. The carve-outs cover small businesses, startups, and testamentary trusts — and every line of the announcement implicitly concedes the original bill was incomplete. What the government calls "further implementation details" would more honestly be called a second attempt at the policy design it should have completed before May 28.
What did Labor announce on June 18?
The government confirmed three main changes in its official media release[1]Tax reform implementation for small business and startups“The Albanese Government is today announcing further implementation details for its tax reform package, following an intensive first round of post-Budget consultation.”: the turnover threshold for the existing 50%[15]Senate inquiry into controversial CGT, negative gearing reforms kicks off in Canberra“Some of Australia's most successful tech companies, including Canva and Employment Hero, would not have survived without the 50% discount, the Australian Investment Council said on Tuesday.” active asset CGT reduction will rise fivefold from $2 million[3]Government unveils capital gains tax carve-outs | Midday News Bulletin 18 June 2026“Today we're announcing that we'll increase the turnover threshold for existing small business 50 percent active asset CGT concession from $2 million to $10 million.” to $10 million, covering all 2.7 million active small businesses and 98% of active businesses nationally. A consultation paper was released on a new "Innovative Business CGT Concession" — a proposed 50% discount for founders, early investors, and employee share scheme participants in startups under 10 years old with under $50 million in turnover, provided shares are held for five years. Income from all types of testamentary trusts — roughly 10,500 structures in Australia[4]Albanese unveils sweeping CGT carve-outs“the bill handing the Treasurer nine separate discretions, including the ability to decide which assets retained CGT discounts and how 'new builds' would be defined for negative gearing and concession purposes” — will be exempt from the new 30% minimum tax.
Albanese conceded the total cost of the carve-outs is $475 million over four years — "about one-seventeenth" of total expected revenue from the reforms[2]CGT overhaul: Labor announces SME and startup carve-outs after backlash“The carve-outs announced on Thursday were set to cost the budget $475 million over the four-year budget period, Mr Albanese revealed, which is about one-seventeenth of the total expected to be raised by the overall tax changes.”.
The stakes for startups are not abstract. The Australian Investment Council told the Senate inquiry that some of Australia's most successful tech companies, including Canva and Employment Hero, would not have survived without the existing 50% CGT discount[15]Senate inquiry into controversial CGT, negative gearing reforms kicks off in Canberra“Some of Australia's most successful tech companies, including Canva and Employment Hero, would not have survived without the 50% discount, the Australian Investment Council said on Tuesday.”.
Labor's CGT reform: by the numbers
- $475 million — cost of June 18 carve-outs over four years, one-seventeenth of total expected revenue
- $825 million — CPA Australia's upper estimate of one-off transitional compliance costs, not disclosed by Treasury
- $295–542 million/year — CPA Australia's estimate of ongoing annual compliance costs vs. Treasury's $88.4 million figure
- 11 days — time stakeholders had to respond to legislation affecting millions of Australians
- Nine — ministerial discretions originally embedded in the bill, now being curtailed after widespread criticism
- July 10 — closing date for startup concession consultation, eight days after Parliament's planned July 2 winter recess
What's still missing from the legislation?
Even after June 18's announcement, critical elements of the most consequential tax reform in a generation remain unwritten. The government's own release confirms the startup concession is still a consultation paper, not law. Consultation closes July 10[1]Tax reform implementation for small business and startups“The Albanese Government is today announcing further implementation details for its tax reform package, following an intensive first round of post-Budget consultation.” — eight days after Parliament's scheduled July 2 winter recess. The Senate is being asked to vote on a tax package before the government determines which startups qualify for the 50% discount that the tech sector was told would address its concerns.
The definition of "new build" — the single most commercially critical term in the negative gearing package, determining which future property investments retain concessions — is also absent. Chalmers promised it will appear in "a future tranche of tax reform legislation" following further consultation[1]Tax reform implementation for small business and startups“The Albanese Government is today announcing further implementation details for its tax reform package, following an intensive first round of post-Budget consultation.”. PwC noted in its analysis that the bill currently leaves this definition entirely to ministerial discretion by legislative instrument[9]2026-27 Federal Budget – CGT and housing tax reform“The Bill, which also includes the Working Australians tax offset and $1,000 standard work-related deduction, has also been referred to the Senate Economics Legislation Committee for inquiry and report by 22 June 2026.” — a power Chalmers acknowledged his bill originally held with nine separate discretions.
Parliament is being asked to pass a reform where the key policy settings do not yet exist in a visible or testable form.
CPA Australia, submission to Senate Economics Legislation Committee
How did we get here? The process that produced this mess
How the CGT bill unfolded
- May 12, 2026 — Budget announces CGT and negative gearing overhaul
- May 28 — Treasury Laws Amendment (Tax Reform No. 1) Bill 2026[9]2026-27 Federal Budget – CGT and housing tax reform“The Bill, which also includes the Working Australians tax offset and $1,000 standard work-related deduction, has also been referred to the Senate Economics Legislation Committee for inquiry and report by 22 June 2026.” introduced with no exposure draft
- June 4 — Bill passes lower house after two days of debate
- June 9 — Senate inquiry submissions close; stakeholders had 11 days to respond
- June 15–16 — Senate committee hearings; Treasury unable to split CGT/negative gearing revenue; admits errors in explanatory memorandum
- June 18 — Carve-outs announced for small business, startups and trusts
- June 22 — Senate committee report due
- July 2 — Winter recess; bill must pass before this date
- July 10 — Startup concession consultation closes
CPA Australia confirmed the legislation was introduced without an exposure draft, a consultation paper, or formal stakeholder engagement, and that stakeholders received just 11 days to respond[5]CPA Australia Tax News | 11 June 2026“CPA Australia's bottom-up analysis puts the figure at $295 to $542 million per year and identifies a further one-off transitional valuation obligation of at least $675 to $825 million that Treasury has not disclosed.” to legislation affecting millions of Australians.
The consequences became visible at the June 15–16 Senate hearings. Treasury officials were unable to separate the revenue impact of the CGT changes from the negative gearing changes[8]Tensions flare over CGT costings in fast-tracked Senate hearing“The Senate committee will produce its report on the budget reforms no later than June 19, as the government attempts to pass those measures through the Upper House by July 2.” when asked directly by Liberal Senator Claire Chandler. Treasury Deputy Secretary Diane Brown took the question on notice. Officials also admitted errors in the bill's explanatory memorandum, saying corrections were "ultimately a matter for government"[7]Treasury officials left flat-footed on Labor's tax overhaul“Treasury officials have been left flat-footed and unable to answer basic questions at a two-day inquiry into Labor's controversial tax overhaul, including the revenue windfalls for each of the CGT and negative gearing policies over any time frame.”. The Institute of Public Accountants' Tony Greco told the same inquiry: "The phones have been ringing off the hook since the budget ... I can't overstress the complexity and the compliance cost associated with this measure."
What do compliance costs actually look like?
Treasury's regulatory impact statement puts ongoing compliance costs at $88.4 million per year[13]Peak accounting group CPA Australia says rushed Budget tax legislation has more hidden costs for investors“CPA Australia calculated the compliance costs would be $295m to $542m a year, continually, and at least $675m to $825m more as a one-off transitional cost. 'This is three to six times Treasury's own estimate of $88.4 million.'”. CPA Australia[5]CPA Australia Tax News | 11 June 2026“CPA Australia's bottom-up analysis puts the figure at $295 to $542 million per year and identifies a further one-off transitional valuation obligation of at least $675 to $825 million that Treasury has not disclosed.”'s bottom-up analysis using ATO Tax Statistics arrived at $295 million to $542 million per year — three to six times Treasury's figure — plus a one-off transitional cost of $675 million to $825 million that Treasury had not disclosed at all[5]CPA Australia Tax News | 11 June 2026“CPA Australia's bottom-up analysis puts the figure at $295 to $542 million per year and identifies a further one-off transitional valuation obligation of at least $675 to $825 million that Treasury has not disclosed.”. That transitional cost stems from a single requirement: every Australian holding a CGT asset must establish an ATO-acceptable market value as of June 30, 2027. The apportionment formula for that valuation has not yet been designed. The $475 million[2]CGT overhaul: Labor announces SME and startup carve-outs after backlash“The carve-outs announced on Thursday were set to cost the budget $475 million over the four-year budget period, Mr Albanese revealed, which is about one-seventeenth of the total expected to be raised by the overall tax changes.” in carve-outs announced June 18 is less than the lower bound of that one-off compliance bill.
CPA Australia warned that the compliance burden "will fall disproportionately on everyday Australians rather than the high-wealth investors that this policy was intended to target"[6]Warnings of one-off $825 million compliance bomb in CGT plan“The compliance burden is real, it is sizeable, and it will fall disproportionately on everyday Australians rather than the high-wealth investors that this policy was intended to target.”.
| Measure | Treasury estimate | CPA Australia estimate |
|---|---|---|
| Ongoing annual compliance | $88.4 million/year | $295–542 million/year |
| One-off transitional (valuation at June 30, 2027) | Not disclosed | $675–825 million |
| Ratio vs. Treasury | — | Three to six times higher |
Can Labor pass the bill before July 2, and at what price?
Labor holds 30 of 76 Senate seats. With the Coalition uniformly opposed — Shadow Treasurer Angus Taylor has called the package "toxic taxes" — the government needs the Greens' 11 votes to clear the upper house. The Greens will give them, but the price is not fewer concessions to business. It is fewer concessions to existing property investors. Senator Nick McKim has used the Senate hearings to press for grandfathering to be wound back, making negative gearing and CGT changes apply retrospectively. The Greens have given several hints they want to scrap grandfathering provisions in Labor's negative gearing and capital gains tax changes[10]CGT changes: Greens hint they want to scrap grandfathering in Labor's Budget tax changes“The Greens have given several more hints they want to scrap grandfathering provisions in Labor's negative gearing and capital gains tax changes for its Budget legislation to pass the Senate.” for the legislation to pass the Senate. Their starting position is the elimination of the CGT discount entirely, with no exemptions for existing assets[10]CGT changes: Greens hint they want to scrap grandfathering in Labor's Budget tax changes“The Greens have given several more hints they want to scrap grandfathering provisions in Labor's negative gearing and capital gains tax changes for its Budget legislation to pass the Senate.”. The June 18 SME carve-outs do nothing to satisfy that demand. If anything, they establish a precedent: if Labor will move under business pressure, why not on grandfathering?
Even the Reserve Bank is waiting. RBA Governor Michele Bullock confirmed after the June 16 rate hold that the Bank would not assess the fiscal impact of the tax changes until they become law: "We take those as given when they're legislated and then we'll work through what we think that means for aggregate demand."[7]Treasury officials left flat-footed on Labor's tax overhaul“Treasury officials have been left flat-footed and unable to answer basic questions at a two-day inquiry into Labor's controversial tax overhaul, including the revenue windfalls for each of the CGT and negative gearing policies over any time frame.” The central bank fighting inflation is still flying blind on a fiscal package that is itself still being written.
Chalmers told reporters on June 18: "We are delivering real change here." What June 18 actually delivered was a revised framework — still missing its startup concession criteria, its "new builds" definition, and its trust legislation — for a Senate vote in less than two weeks, on a law the government chose to introduce before it was finished.