The guest argues Australia’s budget tax changes unintentionally disadvantage startups and scaleups by reducing the after-tax incentive for employees to join risky early-stage businesses versus property investment. He says the reforms may help owner-occupancy goals, but they also risk slowing talent attraction and weakening the country’s startup momentum.
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This ABC News Australia segment is an interview with James B, who discusses his company Own Home and the broader impact of the government’s proposed changes to negative gearing and the capital gains tax (CGT) discount. He explains Own Home’s mission as expanding access to home ownership and notes that his company also includes Peach Property, aimed at democratizing access to advocates during the home-buying process. The core market/business argument is that the tax changes create an unintended relative disadvantage for startups and scaleups. He says employees at Own Home are part owners through shares with a zero cost base, and under the new regime there is no CGT discount on those shares, while property can still receive a discount. …
Near term, the actionable setup is reputational and policy risk for Australian startups: the budget changes may cool sentiment and make equity compensation less attractive versus property. Watch the consultation process for any relief or carve-outs that could reverse the immediate negative read.
Over the next few months, the key question is whether the reforms actually alter founder hiring, employee participation, or startup formation. If no real behavioral shift appears, the debate may fade; if talent or capital starts leaning away from startups, the policy will be seen as a meaningful drag.
The structural issue is how tax policy shapes national innovation capacity. If property remains preferential versus entrepreneurial risk-taking, Australia may struggle to convert its ambition to become the 'clever country' into a durable startup-heavy growth regime.
The budget changes create an unintended loser: people looking to start a small business.
The opening line and later answers frame startup founders and employees as disadvantaged by the tax changes.
Own Home’s mission is to expand access to home ownership by providing up to 100% home finance.
The guest directly defines the company’s purpose and business model.
The tax changes weaken the incentive for startup employees who are part owners with zero-cost-base shares.
He explains that employees own shares and that the new tax treatment removes a prior discount on capital gains.
What does Own Home do?
Own Home's mission is to expand access to home ownership. They help people who don't have access to the 'Bank of Mum and Dad' by providing up to 100% home finance. They also have Peach Property, which democratizes access to advocates during the home purchase journey.
What do you make of the government's proposed changes to CGT?
The biggest implication is attracting talent. Every Own Home employee is a part-owner with shares that have a zero cost base. Pre-Tuesday there was a discount on capital gains; post-Tuesday there's zero discount for those shares but a discount still exists for property. The risk-reward tradeoff of joining a startup is being undermined.
The treasurer says decisions around business can now be based on economics rather than tax gains. What do you say to that?
James agrees the tax tail should not wag the investment dog for most people, but at the margins tax can create important incentives. He notes that post-Tuesday, on a relative basis, it is in many cases better to invest in property versus start a business with the same money.
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