Budget shortchanges new investors and young Australians, CPA Australia says

“We’ve seen changes that raise revenue, increase complexity and discourage risk-taking. Genuine tax reform should expand opportunity - not limit it," Wong said in a statement.

"This budget doesn’t address Australia’s over-reliance on income taxes. It focuses more on capital and risk, less on workers.”

Without addressing what Wong said are “critical issues”, productivity is likely to remain subdued, investments discouraged, and Australia’s competitiveness in the international markets weakened.

On Tuesday, 12 May, the Albanese government delivered a raft of tax reforms, including the Working Australians Tax Offset (WATO), limiting negative gearing to new builds, and applying a minimum 30 per cent rate on discretionary trusts from 2028-29.

The budget also replaced the 50 per cent capital gains tax (CGT) discount with inflation-adjusted indexation from 1 July 2027, with a minimum tax rate of 30 per cent on realised gains.

Accountants Daily breaks the budget down further here, with responses from leading financial and accounting institutions.

Wong warned the changes to CGT and investments settings would only serve to disproportionately impact on the mum-and-dad investors, younger Australians and small business owners.

“For anyone looking to invest, grow a business or take on risk, the message is clear – the government will take at least 30 per cent, regardless of the outcome,” Wong said in a statement.

She said it effectively created a “minimum tax on aspiration” and sent the “wrong signal” at a time when Australians should be investing.

In his speech on Tuesday night, treasurer Jim Chalmers said the government hoped the tax reforms and productivity measures would back business innovation and ongoing investments.

However, Wong said that productivity depends on investment and the government’s changes only “make that equation harder”.

“If you’re taking a risk, building something, investing in growth – you’re handing over a significant portion of that return. This is a clear disincentive; it reduces the incentive to invest in the kinds of businesses that drive long-term productivity and job creation.”

While the budget contained a number of measures designed to support business investment, including a permanent instant asset write-off and the return of the two-year loss carry back, Wong said the budget failed to deliver support at a time of economic pressure.

Any positive measures are “outweighed by broader changes that increase the tax burden and complexity”, Wong said.

“For small business operators – particularly those using trust structures – this means higher effective tax rates and less flexibility.

“Small businesses are already dealing with rising costs and uncertainty. This doesn’t improve confidence or encourage investment,” Wong said, adding the absence of measures to lift digital capability for small businesses was a missed opportunity.

For younger Australians, financial independence has been made that much harder at a time when building wealth is already challenging.

“Increasingly, they are being pushed towards one pathway – earning a salary, buying a home if they can, and relying on super for retirement. That’s a pretty narrow definition of opportunity for Australians,” Wong said.

“Intergenerational equity matters but today’s proposed changes won’t deliver it, and go some way to making it worse.”

Wong explained intergenerational equity is shaped “by more than tax policy”, with deficits and rising government debt also placing a burden on future generations.

At a time when global competition for investments and people is intensifying, CPA added the tax measures risk pushing capital and “our most ambitious and entrepreneurial talent” offshore.

This is paired with the increased complexity of the tax system, which would disproportionately favour the wealthier investors.

“This is not levelling the playing field – it’s tilting it even further in one direction. Those with the resources to navigate complexity will adjust. Ordinary Australians will simply pay more,” Wong said.

The overall design has raised questions about fairness and Australia’s global competitiveness, Wong added.

“It is difficult to reconcile a system where ordinary Australians face higher effective tax rates on investment, while more sophisticated investors can restructure.

“The more complex and restrictive the system becomes, the more it benefits those at the top end. At the same time, it risks undermining confidence in Australia as a place to invest and grow.”