Gina Rinehart warns against Anthony Albanese’s CGT plan

Australia’s richest woman has given the thumbs down to Anthony Albanese’s capital gains tax, warning it will force business investment offshore.

Gina Rinehart remains Australia’s richest person, with a personal net worth estimated of over $41 billion AUD.

Now she’s warning the nation that the CGT tax changes are ill-considered and bad for the Australian economy.

“If you reduce the incentive and ability for people to invest, you reduce future discoveries, future mines, future jobs, future revenue and future growth for Australia at a time when our country sure needs it,’’ she told The Australian.

“Additionally, what is also being missed in the CGT increase is that people are investing money they have already paid tax on through PAYG and other taxes, and yet any profits they make on that reinvestment is now going to be subject to even higher taxes.

“New Zealand points out that it has no capital gains tax and suggests publicly (that) struggling Aussies invest in New Zealand instead. Investment is internationally mobile.”

It comes as tech entrepreneurs’ AI-generated photos mocking Anthony Albanese as their new founder have hit their intended target, with Labor MPs leading the charge to “tweak” the capital gains tax changes.

As MPs return to Canberra this week, the Albanese Government is preparing to introduce the first tranche of legislation over contentious reforms to capital gains tax and negative gearing.

But that doesn’t mean the reforms are signed, sealed and delivered.

Instead, the ALP caucus committee will hold talks on Monday with MPs pushing for a more generous regime to help start-ups and entrepreneurs.

The CGT changes replace the 50 per cent tax discount on profits with an indexation model, which taxes profits after inflation, and a minimum 30 per cent tax rate.

Entrepreneurs have raised concerns that the changes disproportionately hurt start-ups because they typically begin with a near-zero cost base, leaving founders facing an effective tax rate of up to 47 per cent on the profit from a successful business sale.

What Labor MPs want

Several MPs who spoke to news.com.au want carve outs to go beyond tech start ups.

“I see the same argument for a tech start-up as for a non-tech start-up,’’ a Labor MP said.

“I think there will be a carve-out, and it will be for start-ups.”

One option could be to increase the threshold for small businesses captured by carveouts with a turnover of under $2 million.

“Those numbers haven’t changed in a while,’’ a Labor MP said.

But it’s not clear that the Treasurer Jim Chalmers is on board with big changes.

Senior government sources admit the situation is fluid and the government hasn’t landed on a final position.