Australia’s major business chambers have urged the federal government to scrap its damaging business tax hikes and instead pursue reforms that support investment and productivity.

CEOs of the Australian Chamber of Commerce and Industry, Business NSW, the Victorian Chamber of Commerce and Industry, Business Chamber Queensland, the Chamber of Commerce and Industry Western Australia, the South Australian Business Chamber, the Tasmanian Chamber of Commerce and Industry, the Northern Territory Chamber of Commerce, and Canberra Business Chamber called on the government to rethink its changes to the capital gains tax (CGT) and the tax on trusts.

“The business community is shocked that the government has decided to impose major new taxes on business through capitals gains tax and trusts,” said ACCI Chief Executive Officer Andrew McKellar.

“There is no economic rationale for piling more tax on businesses, and the government must adopt a more comprehensive approach to tax reform.”

The chambers of commerce say that:

· The government’s stated objective is to address housing affordability issues, but higher taxes on business investment do not contribute to this objective.

• The measures fail to recognise that for Australia’s future prosperity, investment in business should be supported, not penalised.
• Penalising investment in small and medium businesses will undermine their productivity and ability to compete.
• The biggest losers under the new system will be the most productive businesses in every industry, making the proposed CGT change a tax on productivity.
• An enormous number of small and medium businesses use trusts, and the proposal to drive up tax on these businesses will damage their productivity.
• Comprehensive tax reform is necessary, but this needs to recognise the need for Australian businesses to be more competitive and productive.

Daniel Hunter, Business NSW Chief Executive Officer:

“Business confidence in NSW has collapsed to its lowest level since at least 2009. Government taxes, levies and surcharges have now overtaken insurance and energy as the top cost concern for businesses.

“The government needs to pause and consult on their tax proposals if they really want to support Australia’s biggest employer — business.”

Sally Curtain, Victorian Chamber of Commerce and Industry Chief Executive Officer:

“Victorian businesses and investors need confidence that the commitments our leaders make on tax policy will be honoured if government expects them to continue providing the jobs, investment and growth that contribute towards a prosperous economy and society.

“Governments should be focused on creating a more competitive environment that supports productivity, innovation and economic growth if they are serious about lifting our living standards.”

Heidi Cooper, Business Chamber Queensland Chief Executive Officer:

“Queensland businesses are already under pressure, and higher taxes on investment will only make it harder to grow, hire and compete.

“Businesses are telling us costs are up, confidence is fragile and conditions remain tough. What businesses need now is certainty, genuine consultation and a swift resolution to these issues so they can keep investing with confidence.”

Will Golsby, Chamber of Commerce and Industry Western Australia Chief Executive Officer:

“Now more than ever, businesses need certainty. In Western Australia we are on the cusp of significant opportunities including critical minerals, defence and energy investment.

“These changes, on the back of the significant impact of fuel disruption, will make Australia a less attractive place to invest while driving down productivity and squeezing small and family businesses.”

Andrew Kay, South Australian Business Chamber Chief Executive Officer:

“The federal government says productivity is a national priority, but you do not lift productivity by making business investment less attractive. These changes should be

paused and properly tested against the impact they will have on businesses trying to grow, employ and compete.”

“We are in a global competition for investment capital. This budget takes us from the premier league to the second division.”

Glen Hingley, Northern Territory Chamber of Commerce and Industry Chief Executive Officer:

“The Northern Territory has the highest small business density per capita in Australia, so when investment rules change, we feel it first and often more deeply than anywhere else.

“Our economy depends on Territorians backing themselves, taking risks and building something from nothing, often with the support of investors, but when the only real return comes at the point of sale, changes like this cut directly into that incentive and make people question whether the risk is worth it.”

Greg Harford, Canberra Business Chamber Chief Executive Officer:

“We need to create an environment that supports entrepreneurship and encourages businesses to grow. Starting and growing any business requires huge personal and family commitments, sacrifices and risks.

“The government doesn’t share in those risks, and the proposed changes raise equity and fairness issues. The Canberra Business Chamber strongly urges the government to roll back the changes to both capital gains tax and trusts, or at least restrict the changes to residential investment property.”

Colleen Reardon, Tasmanian Chamber of Commerce and Industry Acting Chief Executive Officer:

“As the state with the highest proportion of small businesses — more than 97 per cent — Tasmania will be hit particularly hard by these disastrous changes.

“Small businesses employ nearly half of all Tasmanians in work, yet these proposed changes effectively punish people who take the risk of setting up a business.

“It is particularly disappointing that in defending these proposed changes, the federal Labor government is portraying businesses owners as somehow doing something wrong by using legal trust structures for their business affairs; nothing could be further from the truth.”