The Hon Andrew Leigh MP
Assistant Minister for Productivity, Competition, Charities and Treasury
E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO CANBERRA, BREAKFAST WITH ROSS SOLLY
FRIDAY, 19 JUNE 2026
SUBJECTS: Budget; Tax reform implementation details; start-ups
ROSS SOLLY: So you’ve been hearing in the news all morning that the government announced yesterday that there will be changes to its capital gains tax policy and the way that trusts are taxed. There’s also going to be a walking back of the powers that Jim Chalmers had as Treasurer. All of these things were causing a considerable amount of angst in many circles. And despite the government saying that they’re going to push through and they’re going to hold their nerve, in the end, they were unable to do so.
Dr Andrew Leigh is the Member for Fenner, and also the Assistant Minister for Productivity, Competition, Charities and Treasury and joins us this morning. Dr Leigh, good morning to you.
ANDREW LEIGH: Good morning.
ROSS SOLLY: Crikey, what happened there? Are you still with us, Dr Leigh?
ANDREW LEIGH: I certainly am, yes. All is good on my end.
ROSS SOLLY: No, there was a big squeaking noise there. I’m not sure what it was. So why – tell me why that your government has decided to make these changes?
ANDREW LEIGH: Well Ross, I take issue with the way you’ve characterised these changes. Budget Paper 1 on page 30, released on Budget night said ‘The government will consult with stakeholders on key details of the capital gains tax reforms, including the treatment of early stage and start-up businesses given the unique features of the tech and start-up sector.’ That’s exactly what we’ve done. And these announcements that the Prime Minister and the Treasurer made yesterday reflects that consultation that we said we’d do on Budget night.
ROSS SOLLY: But you’ve also been, and including yourself Andrew Leigh, on this program and Jim Chalmers, Anthony Albanese have all been talking about just how important the laws were in their state and what you were trying to achieve. I know you’ve said that you were going to be having consultations, but you all really, really believed in the laws – in the Budget changes you put forward initially.
ANDREW LEIGH: Ross, what we’ve done is announced the results of the consultation which refined the way in which we’re treating start-up businesses. We are still delivering reforms which are going to see 75,000 more first home buyers coming into the market, reforms which will see every working Australian get a tax cut. This package returns the revenue to people in lower income taxes, and what we do through this package is to ensure that start-up businesses are able to thrive.
In terms of the revenue effect of the announcements that were made by the Prime Minister and Treasurer yesterday is about one-seventeenth of the total revenue of the package…
ROSS SOLLY: Yeah, I guess it doesn’t make a big difference in terms of the Budget bottom line, but I guess the question many might ask is did you, did the Treasurer, did the government consult widely enough before coming up with the initial policy? Because now you’ve had to go back and rework it, or was it just that the voices of those concerned were so loud that you couldn’t ignore them?
ANDREW LEIGH: Ross, we consulted extensively on this issue over the last couple of years. This is an issue that was canvassed at the Economic Reform Roundtable. Groups such as e61, the Tax and Transfer Policy Institute here at the ANU and the Grattan Institute have been calling for reform of the capital gains tax and negative gearing…
ROSS SOLLY: But this is what I don’t understand…
ANDREW LEIGH: To help first home owners to get into the market.
ROSS SOLLY: Yeah, this is what I don’t understand though. If you’d been negotiating for a couple of years on this, how come what you decided, what you announced in the Budget wasn’t, you know, reflected in what the community wanted?
ANDREW LEIGH: Well what we announced in the Budget is that we would make a series of changes and we’re going ahead with those changes. And we also said on Budget night the government will consult with stakeholders on key details. We’ve done that detailed consultation with start-ups, and the announcements that were made yesterday will see a hundred per cent of active small businesses eligible for the CGT concession…
ROSS SOLLY: I thought it was 98 per cent? But let’s not quibble over 2 per cent.
ANDREW LEIGH: 98 per cent of all businesses, 100 per cent of small businesses.
ROSS SOLLY: All right then, okay. Now the changes that you’ve made now though, have made it way too complicated Andrew Leigh. And the last thing people want is a complicated system. Is it now going to be too unwieldy?
ANDREW LEIGH: What we need to do is to reform the capital gains tax discount because there was a significant mistake made by the Howard Government back in 1999. They put in place an arbitrary 50 per cent discount thinking that would encourage innovative investment. But instead it caused a whole lot of additional investment into property, crowding out first home buyers from being able to buy a home of their own. We’re making changes which will see strong incentives to invest in start-ups. We’re returning to inflation indexation, which has much stronger economic backing since you’re taxing real gains rather than giving an arbitrary 50 per cent discount.
For some investors the new arrangements will be better. So for example, if you had an index fund of the all ordinaries from 1999 to 2026, you would have been better off under inflation indexation than under the capital gains tax discount. Some will be better off, some will be worse off under our changes. But we know it will get more first home buyers into the market.
ROSS SOLLY: You’ve also changed the rules regarding testamentary trusts. Now rightly or wrongly, that’s been described as a death tax. You’ve also tweaked that Andrew Leigh. In the end, I mean, just – people standing up in the media saying you’re introducing a death tax, you were never going to win that argument were you?
ANDREW LEIGH: Well it’s clearly a false argument. There was never any tax on inheritances. But we’re exempting all income from testamentary tests from the minimum tax on capital gains…
ROSS SOLLY: But has the scare campaign worked then? If it is a scare campaign, has it worked then Andrew Leigh, or was it just the wrong policy?
ANDREW LEIGH: Well look, we have desperate opponents out there – the three right-wing parties will say anything they can and we need to make absolutely clear that we’re not taxing income from testamentary trusts.
ROSS SOLLY: But they seem to have won here, though. They’ve got you to change the rules?
ANDREW LEIGH: Look, the revenue impact of this is around $50 million over the forward estimates, quite small in the scope of the overall Budget…
ROSS SOLLY: Yeah but you have been forced to change the rules, though. You have had to change it because they’ve been there every day in the media describing this as a death tax. And whether you describe it as a scare campaign or whatever, they have been effective in getting you to change the policy?
ANDREW LEIGH: Ross, it’s just helpful to put this into context. So there’s about 800,000 discretionary trusts in Australia. There’s about 10,000 testamentary trusts. All that the change does is it says that those testamentary trusts are exempt, including new testamentary trusts that are set up after the announcement. So it’s the new testamentary trusts that is the change. I would characterise this very much as a tweak and one which still maintains the original intent of the law reforms announced on Budget night.
ROSS SOLLY: If you were hoping this might take some of the sting out of it, Andrew Leigh, it seems it’s not going to. The Chamber of Commerce and Industry says it’s a rushed patch-up which doesn’t go far enough. The Business Council says this goes nowhere near far enough. Is there room for more tweaking, or is this going to be it?
ANDREW LEIGH: Ross, you and I have knocked around politics for a while and both of us know that when you do serious reform there are critics out there. That was true when Paul Keating and Bob Hawke announced the capital gains tax itself in 1986. They had a whole lot of attacks on them, people saying that that would tank the economy and it didn’t. We had attacks on us when we made the changes around ensuring fuel standards for Australian vehicles. And now we’re getting cleaner, cheaper cars. These scare campaigns come and go. What matters is that governments are committed to getting more Australians into home ownership and cutting taxes for all working Australians. That’s what the Budget does.
ROSS SOLLY: So, there’ll be unlikely to be any more changes?
ANDREW LEIGH: Look, there are some issues where we’ve announced that we’re doing further consultation, such as the innovative businesses. There’s other issues where we’ve got a clear landing point, such as increasing the threshold for CGT concessions on small businesses to $10 million.
ROSS SOLLY: Andrew Leigh, I have to ask you because more than a few were also urging you to stand your ground. They were arguing you have a massive majority, there’s two years to the next election – have the courage to back your own convictions and stare down the critics.
ANDREW LEIGH: Ross, the trouble with that line of questioning is it misunderstands what we said on Budget night. On Budget night, we said ‘The government will consult with stakeholders on key details of the capital gains tax reforms, including the treatment of early stage and start-up businesses’. So this is simply doing what we said we would do on Budget night. And I think it’s important that people don’t over egg the pudding on that and think that somehow we had announced a package on Budget night with absolutely every single detail nailed down. We didn’t. We said we’d consult. We have, and we’ve announced the results of that consultation.
ROSS SOLLY: Dr Andrew Leigh, appreciate your time this morning. Thank you.
ANDREW LEIGH: Thanks so much Ross.
ROSS SOLLY: That’s Dr Andrew Leigh, the Member for Fenner.
ENDS