In response to recent changes in Australia’s capital gains tax policy introduced by the Labor government, local entrepreneurs are considering expanding their businesses internationally. The revised tax measures have prompted several start-ups to relocate to countries like New Zealand and the United States, where corporate tax rates are more favorable.
New Zealand has become an attractive option for these businesses due to its lack of a comprehensive capital gains tax. This absence of CGT is a significant draw for Australian companies seeking to minimize tax obligations and maximize growth opportunities.
With the Anthony Albanese administration’s decision to eliminate the 50 percent discount on capital gains tax, many Australian business owners are exploring opportunities beyond their borders. This policy shift has sparked interest in moving operations to countries with more business-friendly tax environments.
Bill Ovenden, a co-founder of The Lad Collective, a bedding company based in Queensland, anticipates a substantial migration of businesses to New Zealand and the U.S. as a result of these tax policy changes. He predicts that Labor’s new approach will drive a “massive” relocation of enterprises seeking better tax conditions.
In a conversation with the Daily Mail, Ovenden expressed his dissatisfaction with the support provided by the Labor government, indicating that the current tax environment feels unsupportive for business owners like himself.
Mr Ovenden told Daily Mail he didn’t feel supported by the Labor government.
‘We’re two brothers from Brisbane who started a bedding brand because we had a good idea and backed ourselves and it (tax changes) lands on us,’ he said.
‘Businesses like us are being taxed harder, not the ones in Silicon Valley. This government has made it a lot more expensive for us and the 50,000 other businesses in Australia.’
The Lad Collective founders Bill and Ed Ovenden (pictured) are looking at moving their business overseas on the back of the Labor government’s changes to capital gains tax
After the Anthony Albanese government scrapped the 50 per cent CGT discount, Aussie business owners are now looking abroad to run their companies
Mr Ovenden said he and his brother are willing to take their company overseas if it is better for business.
‘We’ll be more than happy to turn the business on its head and have 90 per cent of the business coming from the US and 10 per cent from Australia if it means we are generating more value,’ he said.
‘The US is very good at supporting small business, to the point that my brother Ed is moving to Austin, Texas, because we want to be the biggest bedding company there.
‘That’s how far we’re willing to go and we could go further.’
Mr Ovenden said Labor’s CGT changes will be ‘hugely damaging’ to the economy.
‘The damage won’t start in 2027, when the laws kick in, it’s happening right now because if you don’t know what you’ll pocket when you sell, under this government, you get conservative about how you approach things,’ he said.
‘You hire less, you invest less, and stop swinging for the fences and that’s ultimately bad for the Australian economy. It’s not the business that won’t continue to exist, it’s the jurisdiction we decide to operate in.’
Small businesses contribute nearly $600billion to Australia’s Gross Domestic Product (GDP), or a third of the economy, and employ roughly 5.4million people.
Victorian Hydrogen & Ammonia Industries Limited founder Allan Blood says he feels more welcome in New Zealand as a business owner
Allan Blood, the founder of Victorian Hydrogen & Ammonia Industries Limited has been critical of the Labor government for some time.
Mr Blood accused Labor of having an ideology ‘against coal’ while moving his $2billion urea fertiliser project to New Zealand.
He said he has been welcomed with open arms by the New Zealand government after claiming the Victorian state government declined to support his project.
‘We just got sick of it and we’ve moved over here where the government is welcoming… just you can’t imagine how strong the assistance, the friendliness and the facilitation has been,’ Mr Blood told nine.com.au.
‘The government wants to make things happen in New Zealand. They don’t want to inhibit things.’
Mr Blood said it would be a ‘smart move’ for Aussie entrepreneurs to explore opportunities overseas.
‘From the standpoint of our investors, they would be far better off here than in Australia,’ he said.
