Young Australian investors have expressed strong support for proposed changes to the Albanese government’s planned tax reforms, aligning with a business-led compromise that aims to ease concerns over the impact of a minimum 30 percent capital gains tax (CGT) rate and the hybrid tax model.

The Ai Group, a leading industry association, recently put forward a five-point compromise addressing the government’s proposed overhaul of capital gains taxation. Ai Group CEO Innes Willox argued that the current plan could deter investment at a time when Australia needs capital inflows most. Key elements of the group’s proposal include applying new tax rules only to assets acquired from July next year, abolishing the fixed minimum 30 percent CGT rate, raising small business thresholds, introducing symmetrical treatment of gains and losses, and allowing capital gains to be averaged over multiple income years to better reflect the timing of asset appreciation.

Among younger investors, support for these recommendations is notable. Bassel Beydoun, a 20-year-old law and economics student, emphasized the importance of removing the minimum rate, citing concerns about fairness. He pointed out that taxing students, part-time workers, or lower-income investors at a flat minimum rate could lead to higher taxation than their regular income tax rate. Beydoun also endorsed income averaging, explaining that capital gains typically accumulate over years rather than being earned in a single year, and the current proposal could push taxpayers into higher brackets when liquidating investments for major expenses such as a home deposit.

Similarly, Victor Yan, a 21-year-old law and computer science student at UNSW and an active investor in shares and exchange-traded funds (ETFs), welcomed the recommendation to introduce “genuine prospectivity”—the principle that new tax rules would only apply to future asset acquisitions. Yan noted that this change would offer clearer predictability regarding the after-tax value of his investments, enabling him to retain a larger portion of his returns. He also highlighted that scrapping the hybrid tax system, which currently subjects gains to overlapping taxation rules, would simplify administrative processes.

Jack Coombes, 20, who has invested $65,000 in ETFs, also supports the prospectivity provision but raised concerns about its limited scope. He noted that as a young investor, his share purchases only date back to when he turned 18, restricting the amount of assets protected under the grandfathering clause. This, he said, limits the benefit of the proposed change for younger taxpayers in the long term.

The Ai Group’s compromise aims to balance the government’s goal of reforming capital gains taxation with the need to maintain incentives for investment, particularly among younger Australians. While the government has yet to finalize the details of the tax overhaul, the conversation has highlighted differing perspectives on how best to ensure tax fairness and economic growth.