Jim Chalmers has doubled down on his claims that business is booming in Australia, leading to stunned reactions from professionals in the real estate and business community.
The Treasurer had come under fire for “gaslighting” the public over claims he made in recent weeks, saying more new Aussie businesses were created in June – after the budget – than in any other month on record.
This week, the Treasury put out another media release saying this boom had continued in July, and was backed up by ASIC figures.
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It said 44,040 new companies were registered in July. This came after 43,393 were registered in June.
“Many more businesses are being created on our watch and there is a much smaller proportion of insolvencies than under the Liberals and Nationals,” Dr Chalmers said.
“We have a big agenda to boost productivity and investment and drive growth, and our policies are supporting businesses right around the country.”
He said this was not just a new trend that has suddenly happened, but that business creation had been growing for several years.
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“We already saw before the budget that average new company registrations were higher under this government than any previous government on record, and today’s data continues this trend,” he said.
“There have been only two times since records began in 1999 that more than 40,000 businesses have been registered in a month and both times have occurred under the Albanese Labor Government, with the biggest two months for business creation being the two months since the budget.”
He said there have been more than 1.3 million new companies registered under the Labor Government and more than 1.3 million jobs created.
“An average of 900 companies have been created each day of this Labor government while just over 30 have become insolvent,” he said.
“There’ve been around 30 times the number of companies opening than closing each day on average on Labor’s watch.”
‘We are doomed’: Stunned reaction
The Treasury’s statement has been met with stunned reactions from some in the business world.
McGrath sales agent Jordan Bulmer said he “literally sat in my car for five minutes in silence” after reading it — thinking “we are doomed being governed by these people”.
He had claimed before the budget was handed down that people were going to counteract the latest changes to Capital Gains Tax and negative gearing by rearranging their finances in a company structure.
“No one’s going to buy for a negative geared property now,” he said.
“It’ll be neutral or they will manufacture it to be positive and a few other things.
“I’m a 31-year-old that sells a lot of houses. I’ve done okay, but I’m no economist.
“They’ve got a whole government and advisory board and this bimbo is saying that he believes that people are starting new businesses (in record numbers).
“No, Jim, they’re starting company structures to get away from your stupid policy changes.
“It is mind blowing how illiterate these people are. It’s crazy. How could they not see that?”
Outspoken real estate agent Tom Panos also called out what he called “the spin”.
“He’s boasting about it, but before we crack out the champagne bro, I want to explain something to you, registering a company does not necessarily mean somebody has opened up a thriving new business,” he said.
“Someone might register a company for tax purposes, they might restructure something they already have.
“What you’re probably seeing in these numbers is people restructuring their affairs because of your changes to family trusts – I know lots of people doing that.”
He also claimed a number of registrations would be coming from people feeling the need to start a side hustle or have another income stream due to the cost of living crisis.
“Treasurer: that’s not an economic boom, that’s economic stress. Don’t spin it like that,” he said.
‘Incredibly irresponsible’: Expert blasts claim
The recent figures have also been slammed by veteran investor and Wilson Asset Management chairman Geoff Wilson — a vocal critic of the new tax changes and the cousin of shadow federal treasurer Tim Wilson — who said the boom was entirely artificial.
Another finance expert — Jenny Wong, tax lead at CPA Australia — added that the widening gap between ASIC company registrations and GST registrations suggests the surge in new businesses could be heavily driven by tax restructuring rather than organic economic expansion.
Mr Wilson believed the figures actually showed a phantom trend created by taxpayers fleeing Labor’s new tax hikes.
Pointing to the Budget’s new 30 per cent minimum tax rate on discretionary trust distributions, Mr Wilson claimed Australians were rushing to incorporate company structures simply to access the lower 25 per cent corporate tax rate available to entities turning over under $50 million.
“The Treasurer is trying to gaslight the public again by saying the increase in company registrations is to do with an improving economy or more businesses being founded,” Mr Wilson said.
“That is 100 per cent incorrect. It’s people moving from trust structures, which will now be taxed at 30 per cent, to company structures, which — unless you have turnover over $50 million — are only taxed at 25 per cent.”
He said the trend was purely a tax minimisation strategy, and that a second reason behind the spike may be everyday Aussies putting their shares into company or trust structures to avoid increased capital gains taxes.
Recent research shows investors who bought the 20 most popular stocks six years ago would pay nearly double the amount of tax under Labor’s changes to capital gains tax.
Experts say the changes will unfairly disadvantage investors with diversified portfolios of directly owned shares over pooled investment vehicles like ETFs, which net gains and losses internally.
Mr Wilson said 7.7 million Aussies bought shares and many of them were restructuring their finances in response to the budget.
“The tax asymmetry on a portfolio of shares would drive people to set up company structures to allow them to offset the real losses against real gains,” he said.
“If you had it in a pooled structure like a trust or a company, you offset the real loss against the real gain.
“It’s not to do with the health of the economy — the economy is getting sicker. It’s a reflection of the cost that Aussies have to bear because of the insane capital gains tax that is being imposed.
“The increase in tax — by the increased capital gains tax on Australian businesses — means fewer people are investing in Australian businesses. Small companies listed on the ASX are significantly underperforming.
“Money is going away from growth companies, and ‘growth’ has now become a dirty word because of the new tax on success or aspiration that has been legislated by the current government.”
Mr Wilson pointed to ASIC’s annual insolvency data that showed business failures had tripled.
The data shows corporate failures reached a historic peak of 14,722 in the 2024–25 financial year as the Tax Office resumed aggressive debt collection.
That’s a near-tripling from the post-pandemic low of 4912 in 2021–22 — when government support and temporary statutory relief kept insolvencies artificially low — and sits roughly 79 per cent above Australia’s long-term pre-Covid average of around 8200 company collapses per year.
“The sharp increase in company registrations is evidence that Australia’s tax system is changing business and investment behaviour,” Mr Wilson said.
“Rather than directing more capital into productive businesses, the legislation directs more effort into choosing the most tax-efficient legal structure.”
‘Don’t act too early’: Tax expert’s warning
Ms Wong said that while a surge in company creations aligns with expected behavioural shifts following the Budget’s trust tax overhaul, the true test of trading activity lies in GST data.
“The GST registrations reflect the amount of active businesses,” Ms Wong said.
“If the gap between ASIC company registrations and GST numbers widens, then that points towards structural change as a result of Budget measures rather than organic economic growth.”
According to Australian Business Register (ABR) tracking, that gap is widening significantly. While company incorporations surged by 12.55 per cent in June, new GST registrations grew by just 4.46 per cent — meaning new corporate entities are forming at nearly three times the pace of active trading businesses.
Ms Wong meanwhile has warned Aussies not to restructure their finances too quickly in response to the new budget measures — adding that business owners jumping the gun to restructure before final legislation is passed face severe financial risks.
“Most advisers would tell people: don’t act until you see the design of the legislation,” she said.
“If people are restructuring without seeing the detail, there is a potential for states to levy transfer duty or stamp duty.”
Treasury hits back
A spokesman for the Treasury told news.com.au Australia hasn’t just seen a record number of businesses created since the budget, we’ve also seen a record number of businesses created in the past year, and in the past four years.
“More than 1.3 million new businesses have been created since Labor came to office, that’s a record for any four-year period,” he said.
“We’re delivering $3.8 billion in new business tax relief, making the instant asset write-off permanent, delivering a permanent two-year loss carry back for small companies, introducing loss refundability, expanding tax incentives for venture capital, ensuring 1.5 million sole traders benefit from our $250 tax offset and much more because we believe in small businesses and we’re backing them.”