Sam Kroonenburg, founder of the successful Australian startup A Cloud Guru, has voiced strong concerns about the federal government's planned capital gains tax changes. He warns these reforms threaten the financial incentives for founders to remain and build their companies in Australia, potentially prompting an exodus of startup talent.
- CGT reforms could double tax on startup exits for founders
- Higher taxes may limit reinvestment in new Australian ventures
- Ambitious tech founders might relocate to more favorable markets
What happened
Sam Kroonenburg, notable for founding the Melbourne-based startup A Cloud Guru which sold for $2 billion in 2021, has submitted feedback to a Senate committee on proposed changes to Australia’s capital gains tax (CGT) system. The changes involve removing the 50% CGT discount and instituting CPI-based indexation from mid-2027, along with a minimum tax rate of 30% on capital gains.
Kroonenburg shared that these changes would significantly increase tax obligations for startup founders upon exit events, potentially doubling the tax bills. This shift could severely impact the financial returns that founders receive, which are often reinvested into new startups and venture funds within Australia.
Why it matters
Kroonenburg believes that the proposed CGT reforms jeopardize a generation’s worth of progress in creating a vibrant and competitive Australian startup ecosystem. Increased taxation on successful exits reduces the capital available to fuel future innovation and support emerging founders in the technology sector.
He also warned that heightened tax burdens may encourage Australia’s most ambitious and internationally savvy founders to relocate their operations and talent to countries with more favorable tax environments, such as the United States, Singapore, or the UAE. This could trigger a damaging brain drain, weakening Australia’s position in the global tech market.
What to watch next
The Senate committee is currently conducting hearings and will publish its findings later in June 2026. Treasurer Jim Chalmers has indicated forthcoming consultations focused specifically on the nuances affecting startups and founders, suggesting some modifications may be under consideration for zero-cost-base assets and other concerns.
Startup founders, investors, and industry groups will closely monitor the committee’s recommendations and government responses. The outcome will likely determine whether Australia can maintain and grow its homegrown tech talent or if the proposed tax environment drives a strategic shift in where startups choose to scale and innovate.