Tonight the Australian Government announced that it is removing the current 50% discount on Capital Gains Tax (CGT), and is introducing a minimum 30% tax on gains. Good. I think that everyone should pay a fair share of tax, and it is unfair that people with investments get an unlimited discount on their taxes that wage earners don’t.

There has also been quite some disquiet from the tech industry about getting rid of this CGT discount. In particular, Paul Bassat (co-founder of Seek and other startups) said that if the discount is abolished, “founders will leave Australia in big numbers”.

So I’m posting this to say that I’m an Aussie startup founder, and I’m not leaving Australia.

The CGT discount is just not an important factor in my decisions as a founder and an investor. I have co-founded two successful startups, SmartyGrants sold to Our Community and ThinkTilt sold to Atlassian, so I’ve benefited from CGT discounts in the past. I can honestly say CGT had no impact on my decision to found those startups or on where they were domiciled. I founded them because the products were needed, and Australia was the right place to found them. It just doesn’t make any sense that I would move overseas to avoid a bit of extra tax five to ten years from now at the cost of losing the ideal customers, staff, or partners for the business that we have here in Australia.

I reckon I can say the same for the people we’ve employed and the investors who trusted their money with us. I never heard any of them talk about getting into startups for the CGT discount, it was always about believing in the product and the team. Investing in startups is all about betting on which startup will grow exponentially, and if you really believe that you’re on to a winner I highly doubt CGT is going to discourage you from investing. If you gotta pay a lot of tax because the startup is successful… well, then that’s a good problem to have.

Of course I don’t speak for all founders, and perhaps some really will leave Australia because they think CGT discounts are necessary to their success. If that is true then I think Bevan Slattery’s suggestion of keeping CGT discounts for Australian residents investing in Australian startups is a great way to mitigate that. And even if it’s not true I still think there’s some argument that keeping the discount for Australian startups would be fair and productive. Australia has lost a lot to foreign big tech and we need to find ways to rebalance that. We’ve seen advertising money sucked out of Australia’s economy from our media by foreign big tech like Alphabet (Google) and Meta (Facebook), taxi fares sucked out overseas by Uber and DiDi, shopping revenues sucked out overseas by Amazon and Temu, etc, etc. It might seem fair at face value that all investments are taxed the same, but is it really fair that a foreign monopoly which shifts profits offshore is treated the same as a local startup bringing real competition?

But hey, that’s a question for the policy wonks and I’d rather focus on launching my third startup: Neighbo, the search engine for Melbourne. None of this stuff changes my plans one bit. Neighbo is proudly founded—and staying—here in Australia regardless of any tax system changes.