Prime Minister Anthony Albanese said Thursday that the Australian government will extend capital gains tax discounts to small businesses and startup founders [1].

The move represents a significant pivot in the administration's tax strategy to appease small-business groups and ensure the budget passes through the Senate [2, 3].

Under the new measures, small businesses with an annual turnover of up to $10 million [1] will now be eligible for an extra 50% capital gains tax discount [1]. This threshold is a substantial increase from the previous limit of $2 million [1]. The government is also introducing a similar 50% concession for startup employees and founders [1].

Treasury Secretary Jim Chalmers joined the Prime Minister in unveiling the carve-outs [3]. The policy shift is estimated to cost the government $475 million [2]. These changes affect hundreds of thousands of small businesses across the country [4].

The administration faced mounting pressure from business advocates who argued the original reforms were too restrictive. While some industry leaders have criticized the volatility of the tax changes, others have suggested the focus should shift elsewhere. Robyn Denholm said in June that the industry should stop whingeing about tax changes and focus on artificial intelligence [5].

The government expects to introduce the necessary legislation within the next fortnight [1].

“The government is also introducing a similar 50% concession for startup employees and founders.”

This reversal indicates the Australian government's vulnerability to lobby pressure from the small-business sector and its urgent need for legislative cooperation in the Senate. By expanding the turnover threshold fivefold, the administration is prioritizing economic stability and political consensus over the original revenue goals of its tax overhaul.