I left my corporate career to join a tech startup.
The opportunity to get in on the ground floor and grow with a company that was solving productivity challenges was hard to pass up.
But I’ll be honest, if it were under the Albanese Labor Government’s new tax settings, it’d make me think twice.
There is no doubt that technology holds the key to solving our national productivity challenges – and productivity is the missing piece to lifting our living standards.
But the tech sector isn’t built on guaranteed corporate budgets.
It’s built by talented risk-takers willing to trade a stable paycheck for stock options, betting their careers that they will be part of the next tech success story.
By axing the 50 per cent capital gains discount, Treasurer Jim Chalmers has launched a direct attack on that incentive to innovate.
The reality is, startups rely on equity and stock options to entice talent when cashflow is low, and employees accept lower wages today in exchange for a slice of a company’s future value.
Take Australian tech success story Canva as an example.
When Canva launched 12 years ago, its three founders enticed employees to join by offering equity as part of their remuneration.
Under the Treasurer’s tax changes, an employee who joined Canva early and saw their options grow from pennies to millions would face 30-47 per cent tax upon sale.
When the ATO takes a bigger slice of the ‘maybe’, the ‘definitely’ of a stable corporate paycheck starts to look a lot more attractive to the talented Australians we need building our future.
Even if a young Australian wanted to make the leap into a tech startup, the reality is the option might not exist under the government’s new tax settings.
Because while Canva chose to start out in Australia, Labor’s tax changes mean the next one may not.
We’ve already seen founders talking about the decisions they will have to make on where they will start their next business.
The Tech Council and FinTech Australia have warned that the government’s capital gains tax changes will weaken startup investment and push founders, capital and talent offshore.
The Treasurer can’t keep talking about a Future Made in Australia while simultaneously dismantling the structures that allow Australian-based innovation to get off the ground.
That is not the future I want for our tech industry, our founders or our country.
It is our nation that will pay the price when our best ideas to drive productivity can’t get off the drawing board.
Like many in the sector, I want to see founders thrive here on home soil, where they stay to build a legacy, and where our nation reaps the productivity rewards of Australian-based innovation.
This is just one reason the Coalition has announced we will repeal the CGT tax changes.
Aaron Violi is Federal Member for Casey and the Shadow Minister for the Digital Economy; Science, Technology and Innovation; and Cybersecurity
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