Treasurer Jim Chalmers challenged over data as young entrepreneurs fight tax change

An awkward interview has revealed the Albanese government may be underestimating the number of young Aussies who own shares by nearly half.

An awkward interview has revealed the Albanese government may be underestimating the number of young Australians who own shares by nearly half, with ASIC figures contradicting the Treasurer’s claims.

Jim Chalmers argued that “one in every 10 people under 35 have got shares” during an appearance on youth-oriented podcast The Daily Austhis week.

“So that’s not a tiny number but it’s not a big number,” the Treasurer said in defence of his controversial decision to remove the capital gains tax (CGT) discount for all assets including shares.

But editor-in-chief Billi FitzSimons pushed back, asking: “Where did you get that data from, because when I looked at it, ASIC says that one in five people under the age of 28 do invest in shares. So is it possible that this is more prevalent than your numbers suggest?”

Dr Chalmers flipped through some papers and replied that his figures were the “most recent numbers from the Treasury”.

“I’ll check that out, but regardless, I think sometimes when you read the commentary about the change we made on Tuesday night, it kind of assumes that everybody is in the sharemarket,” he continued.

Ms FitzSimons was referring to ASIC’s Moneysmart Gen Z Survey, published in March, which found that of 18 to 28-year-olds, 18 per cent owned shares and 23 per cent owned crypto.

Dr Chalmers, on the other hand, appeared to be relying on income tax data for 2023-24. News.com.au has contacted Dr Chalmers’ office for comment.

‘Jim Chalmers argued that ‘one in every 10 people under 35 have got shares’.

Editor-in-chief Billi FitzSimons pushed back.

‘A really dangerous place’

The Treasurer’s damage control came as some of Australia’s most successful young founders united in an open letter to Anthony Albanese against the CGT changes.

“Rather than back us, you have ambushed us with a massive tax increase, a tax that will hit us, the Australians we hire, and the investors who believe in us, the hardest,” the letter, signed by 40 Australian founders aged under 40, said in response to last week’s federal budget.

“The consequence isn’t a budget that helps young people get ahead; it’s a budget that will ensure that young business builders, people like us, are much more likely to get left behind.”

Among the signatories was Damien Fitzpatrick, a former rugby player with the NSW Waratahs who founded the sports supplement business Pillar Performance.

Mr Fitzpatrick told news.com.au that the reform in the budget “disproportionately values the risk and hard work that is required to build a business”.

“I just feel Australians are so good at having a go at things and not worrying too much about the downside — I just don’t want people to be discouraged to do that, particularly that next young generation,” Mr Fitzpatrick said.

“I think it’s a really dangerous place for us to blanket CGT changes with building business, because we take that away from young people and that part of our DNA in Australia, and it’s a pretty grim look at what the alternative options are.”

ASIC’s Moneysmart Gen Z Survey was published in March.

The 40 signatories represented a broad cross-section of Aussie enterprise.

Alongside Mr Fitzpatrick, they included Kim Teo, founder of a QR-code menu provider, and Jack Watts, chief of communications agency Bastion.

They were joined by heavy hitters like Frank Greeff, who sold his real estate business to Domain for $180 million.

The backlash from shareholders and entrepreneurs has been severe since Dr Chalmers broke Labor’s election promise not to touch the capital gains tax (CGT) discount.

Pre-budget leaks had suggested the Treasurer would remove the discount for investment properties in a bid to reduce incentives for speculators and rein in the housing market.

On budget night however, he went much further, replacing the discount with an indexation model for all assets.

The change means that Australians who own shares and businesses will no longer receive a 50 per cent CGT discount when they sell after July 2027, and will instead pay tax on their indexed capital gain at their marginal income tax rate of up to 47 per cent, or a minimum of 30 per cent.

Among the signatories was Damien Fitzpatrick, a former rugby player with the NSW Waratahs who founded supplement business Pillar Performance. Picture: Supplied

In a viral trend, frustrated business owners shared AI-generated memes of Mr Albanese as a mock “47 per cent silent partner” doing everything from welding to shop fitting.

“It just shows that this problem spans across generations,” Mr Fitzpatrick said of the trend.

“From anyone who’s planning to have a successful side hustle at 15 or 16 years old, all the way up to someone in a regional Australian town, running a panel beating business that might want to pass that down to their apprentice.”

Both Mr Albanese and Dr Chalmers have defended the changes, but critics have labelled their answers confusing and “illogical”.

“Many of the young business builders who have signed this letter support the measures in the budget that make it easier for young Australians to buy a house, including removing the CGT discount on the sale of residential investment properties,” the founders’ letter to the Prime Minister said.

“But the changes to the CGT discount on shares will do nothing to make houses more affordable; all they will achieve is to suck the ambition, drive and hope out of the hearts of young business builders nationwide.

“Surely that can’t be the plan?”

Source: https://www.news.com.au/finance/economy/federal-budget/young-aussie-founders-turn-on-albo-in-open-letter-against-labors-controversial-tax-changes/news-story/495f8129fe0badf0cf9cf9b36dc114c8