Fact-check
Post arguing the CGT redesign tells founders to keep their business small
This post combines one supported threshold point, one mostly supported arithmetic point, and one broader behavioural claim. ATO guidance does confirm the small business CGT concession gateways at $6 million in net assets or under $2 million aggregated turnover, and the $6 million limit is explicitly not indexed for inflation. It is also directionally right that a zero-cost-base business gets no uplift from indexation itself. But the stronger jump from those mechanics to 'the Government is telling you to keep your business small' is a broader behavioural and design judgement rather than a cleanly verifiable fact, and the statement that tax 'doubles' on sale still depends on the owner's rate and relief eligibility.
2 supported 1 requires assumptions 1 rhetorical
Prefills a fully post-2027 founder exit at the top marginal rate so the zero-cost-base and small-business-concession threshold claim can be pressure-tested against explicit relief assumptions.
Per-claim verification
requires assumptions 84% confidence
Because the small business CGT concession thresholds sit at $6 million in net assets or under $2 million aggregated turnover, the new regime creates a stronger tax disincentive to grow beyond those thresholds.
“The Government’s proposed changes to CGT actively discourage businesses from growing above either $6m in net value or $2m per year in aggregated turnover.”
The threshold mechanics are real: ATO guidance confirms the $6 million net-asset test and the under-$2 million aggregated-turnover gateway for the CGT concessions. But saying the reform 'actively discourages' growth above those thresholds is a behavioural and design inference. It is plausible, especially where founders are near the boundary and rely on concession access, but it is still stronger than the policy text alone proves.
Assumptions required
- Assumes founders and owners materially change growth behaviour in response to the threshold-driven concession cliff.
- Assumes concession eligibility is the binding factor in the relevant exit scenarios.
Alternative defensible framings
- The redesign makes the small business CGT concession thresholds more consequential for founders who might otherwise outgrow them before exit.
- Threshold cliffs can create stronger tax-planning incentives once the general CGT treatment becomes harsher.
supported 87% confidence
The relevant small business CGT concession thresholds have been effectively fixed for well over a decade, with the $6 million test explicitly not indexed.
“With these thresholds remaining unchanged for over 15 years ...”
The currently cited ATO guidance expressly says the $6 million maximum-net-asset limit is not indexed for inflation. The post's broad complaint that these thresholds have not moved for a very long time is directionally consistent with that design.
Alternative defensible framings
- At minimum, the $6 million maximum-net-asset test is explicitly not indexed, which means its real value shrinks over time.
supported 89% confidence
A zero-cost-base business gets no direct uplift from indexation, and in a no-relief top-rate case the new regime can roughly double tax relative to the old discount system.
“a new business with a zero Goodwill cost, will gain no benefit from CPI indexation. That doubles the CGT on its sale if the owner cannot use the Small Business Concessions.”
The zero-cost-base arithmetic is real: indexation of a zero base still leaves zero. And in the standard no-relief founder scenario already modelled on the site, moving from the old discount system to the post-2027 regime can roughly double the tax burden. The caveat is that this depends on relief not applying and on the owner's specific tax position, which the post itself partly acknowledges by conditioning the claim on the owner not using the small business concessions.
Alternative defensible framings
- If goodwill really has a zero cost base and no small business CGT concession applies, the new regime can produce a dramatically higher sale-tax outcome than the old discount system.
rhetorical 90% confidence
The Government is effectively telling founders to keep their business small.
“BUDGET 2027 - KEEP YOUR BUSINESS SMALL ... Honestly, who is doing the thinking in Government?”
This is the author's political characterisation of the threshold and CGT design rather than a discrete factual proposition. The underlying tax mechanics can be described, but this slogan-level conclusion is still an interpretive judgement.
Alternative defensible framings
- The post argues the threshold-and-concession design creates a stronger incentive to avoid outgrowing small-business CGT relief.