Business says Labor's tax changes like a plastic surgery 'freak show'

Business remains unhappy with the government's proposed tax changes. (ABC News: Callum Flinn) Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar says Labor's tax changes have been piecemeal. Mr McKeller says proposed changes to capital gains taxes are relatively simple compared with the government's proposed tax policy. The government plans to try to pass changes through the Senate in the next two weeks. Link copiedShareShare articleBusiness has labelled Labor's budget tax overhaul a "freak show", saying its proposed changes are like an American celebrity who has had too much plastic surgery. The federal government unveiled capital gains tax carve-outs for small businesses and startups yesterday, following five weeks of post-budget backlash. The details are still being determined, but Labor is proposing an innovative business exemption for startups that meet certain strict criteria backed up by business records. Australian Chamber of Commerce and Industry (ACCI) chief executive Andrew McKellar told the ABC's Insiders Podcast the changes were starting to get ugly. "[When it] ends up, they might think it looks beautiful, but to everybody else it's just a freak show." ACCI's Andrew McKellar is not alone in his criticism. (ABC News: Matt Roberts) The government wants to pass changes to negative gearing and capital gains tax through the Senate in the next sitting fortnight with the help of the Greens. The Greens party has expressed interest in tightening CGT discounts but has not yet formally given its support. Council of Small Business Organisations Australia chief executive Skye Cappuccio welcomed the government's extension of the 50 per cent capital gains discount for businesses with a turnover of up to $10 million instead of $2 million. Skye Cappuccio says she would have liked to have seen more exemptions for small business. (ABC News: Callum Flinn) She said the sector was hoping for increases to other tax concessions, but the change was important to the additional 180,000 businesses that fall within that threshold. "So, not as far as we were hoping, but nonetheless, very much welcome and important," she said. Australian Industry Group CEO Innes Willox said the changes to Labor's cornerstone tax policy added complexity, uncertainty and retrospectivity into the tax system that would harm business. "There's still a lot more work for the government to do if they're going to implement capital gains tax measures that don't harm the economy as a whole," Mr Willox said. "The changes to small businesses are welcome, but should not have been done in the first place." Business Council chief executive Bran Black said the sector told the government last year that tax changes should increase investment because that is the only way to sustainably lift productivity and raise living standards. "Put simply, tax reform must grow the pie," Mr Black said in a statement. "This body of reform still does not meet that yardstick. Instead, it increases the tax burden, will reduce investment and therefore sets the nation back." Meanwhile, industry groups representing smaller sectors, including medical technology, said they were pleased with Labor's changes. Medical technology companies say new restrictions on tax refunds for research and development will hurt health startups in Australia. Oz Biotech chief executive Rebecca Cassidy said Labor had recognised the nature of health technology innovation, which could assist with medical breakthroughs. "Running clinical trials is an expensive activity and it is long and precise, absolutely by necessity. These products are designed to help improve human health," she said. Likewise Judy Anderson Firth, who co-chairs the Startup Network, said the overhaul was important for investing into artificial intelligence technology. "If we don't invest now, that wave of technology disruption is going to pass us by," she said. Treasurer Jim Chalmers said the changes announced yesterday were a result of consultation flagged when the budget was announced, while conceding Labor's broken promise on capital gains tax and negative gearing had done some political damage. "I think we have lost some political paint, but I think it's worth it because we're doing the right thing here," Mr Chalmers said. "If we're given the choice between taking the easier path politically or doing the more difficult thing or the right thing in the interests of first home buyers, workers, young people in the tax system, then it will be worth it." Independent Wentworth MP Allegra Spender applauded the government for updating its proposed changes in the budget, but added the amendments risked making the system needlessly complicated. "Honestly, I think they should be considering other, more simple models that don't require sort of bureaucracy to assess whether they are innovative or not," Ms Spender said. Stockspot founder Chris Brycki says his company would be ineligibl

Business says Labor's tax changes like a plastic surgery 'freak show'

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