Australian Business Owners Eye Expansion to New Zealand and U.S. Amid Capital Gains Tax Reforms

In light of recent amendments to capital gains tax introduced by the Labor government, Australian business owners are gearing up to expand their enterprises internationally.

A number of start-ups from Australia have already set up operations in countries like New Zealand and the United States, drawn by the promise of more favorable corporate tax rates.

Notably, New Zealand stands out for its absence of a comprehensive capital gains tax (CGT), making it an attractive destination for entrepreneurs.

With the Anthony Albanese administration’s decision to eliminate the 50 percent CGT discount, many Australian business leaders are considering relocating their operations overseas.

Bill Ovenden, the co-founder of The Lad Collective, a bedding company based in Queensland, anticipates a significant exodus to New Zealand and the U.S. due to the recent CGT policy shifts enacted by Labor.

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.