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The campaign, launched by the Council of Small Business Organisations of Australia (COSBOA) and backed by the Mortgage and Finance Association of Australia, seeks to encourage small-business owners to share their concerns about the proposed changes to capital gains tax (CGT) and trust taxation announced in the federal budget.
The ‘Fair Go’ campaign encourages MFAA broker members and their small-business clients to share their stories and contact their local members of Parliament and senators.
The first tranche of federal budget measures passed the lower house on 4 June. It has now been referred to the Senate economics legislation committee, which will report by 22 June.
The MFAA has also lodged a submission to the Senate economics committee, which is reviewing the proposed legislation, outlining the potential implications of the capital gains tax changes for mortgage and finance brokers and the clients they support.
As a member of COSBOA, the MFAA noted that many of its members operate as small businesses and that the proposed capital gains tax (CGT) and trust taxation changes could therefore impact brokers’ financial futures.
MFAA CEO Anja Pannek said the association welcomed the opportunity to support COSBOA’s Fair Go campaign and encouraged members to have their say.
“Brokers are small-business owners who build their businesses over years, often decades, working with their clients, investing in their teams and their communities. This campaign is an important opportunity for our members to share their experiences and ensure their voice is part of this conversation,” Pannek said.
“For many brokers, the eventual sale of their business is a central part of their retirement planning. They have invested years building something of real value and it is important that policymakers understand what these proposals could mean for that planning.
“We also encourage our members to share the Fair Go campaign more broadly with their small-business clients to ensure this critical part of the Australian economy has a voice in the conversation.”
Backlash to the budget
The federal budget has provoked both pushback and ridicule across the industry.
Industry concerns have largely centred on the government’s move to remove the capital gains tax (CGT) discount across all assets and alter discretionary trust tax structures.
Further concerns revolve around the changes to negative gearing.
According to several broking industry figures, these moves will severely penalise both property buyers and small- to medium-sized enterprises (SMEs).
In a survey of more than 200 brokers conducted by SME lender RedZed, half said their small-business clients felt either somewhat or very negative about the budget, while only 36 per cent reported a somewhat or very positive reaction.
Last month, Joseph Daoud, founder of It’s Simple Finance, spent more than $17,000 on billboards throughout the capital’s airport protesting the tax changes.
Speaking about the impacts of the changes, Daoud said to Broker Daily: “In the short term, the proposed changes have already created confusion and hesitation among clients and peers.
“Many people are reconsidering investments in start-ups or delaying decisions to hire because they’re unsure how their eventual exit or profit-sharing will be taxed.
“In the long term, my concern is that Australia could lose its reputation as a place where entrepreneurs are encouraged to innovate. If capital gains are treated punitively, we risk pushing talent and investment offshore and discouraging everyday Australians, from young ETF investors to employees with employee share schemes, from building wealth.”
The changes also prompted Julian Fayad, founder and CEO of broker fintech LoanOptions.ai, to launch a tongue-in-cheek social media campaign.
Using AI-generated images of Prime Minister Anthony Albanese asleep at the office and celebrating with the LoanOptions.ai team, Fayad announced the Prime Minister as a “co-founder” of the business, given that he would have to “give him 47 per cent equity”.
Meanwhile, other industry figures, such as Westbridge Funds Management chairman and Momentum Wealth managing director Damian Collins, have said that a more gradual approach is necessary.
COSBOA CEO Skye Cappuccio said that it was important for policymakers to hear directly from the small business community.
“Small businesses employ more than 5 million Australians, contribute more than $500 billion to the national economy each year and make up more than 97 per cent of all Australian businesses,” Cappuccio said.
“We want decision-makers to understand the real-world implications of these proposed changes and ensure the voice of small business is heard.”
[Related: HIA urges Senate to broaden housing tax exemptions]
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