RBA claims there\u2019s a new threat in rates call<\/a><\/p>\n\u201cWe already saw before the budget that average new company registrations were higher under this government than any previous government on record, and today\u2019s data continues this trend,\u201d he said.<\/p>\n
\u201cThere 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.\u201d<\/p>\n
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.<\/p>\n
\u201cAn average of 900 companies have been created each day of this Labor government while just over 30 have become insolvent,\u201d he said.<\/p>\n
\u201cThere\u2019ve been around 30 times the number of companies opening than closing each day on average on Labor\u2019s watch.\u201d<\/p>\n
\u2018We are doomed\u2019: Stunned reaction<\/p>\n
The Treasury\u2019s statement has been met with stunned reactions from some in the business world.<\/p>\n
McGrath sales agent Jordan Bulmer said he \u201cliterally sat in my car for five minutes in silence\u201d after reading it \u2014 thinking \u201cwe are doomed being governed by these people\u201d.<\/p>\n
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.<\/p>\n
\u201cNo one\u2019s going to buy for a negative geared property now,\u201d he said. <\/p>\n
\u201cIt\u2019ll be neutral or they will manufacture it to be positive and a few other things.<\/p>\n
\u201cI\u2019m a 31-year-old that sells a lot of houses. I\u2019ve done okay, but I\u2019m no economist.<\/p>\n
\u201cThey\u2019ve got a whole government and advisory board and this bimbo is saying that he believes that people are starting new businesses (in record numbers).<\/p>\n
\u201cNo, Jim, they\u2019re starting company structures to get away from your stupid policy changes.<\/p>\n
\u201cIt is mind blowing how illiterate these people are. It\u2019s crazy. How could they not see that?\u201d<\/p>\n
Outspoken real estate agent Tom Panos also called out what he called \u201cthe spin\u201d.<\/p>\n
\u201cHe\u2019s 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,\u201d he said. <\/p>\n
\u201cSomeone might register a company for tax purposes, they might restructure something they already have.<\/p>\n
\u201cWhat you\u2019re probably seeing in these numbers is people restructuring their affairs because of your changes to family trusts \u2013 I know lots of people doing that.\u201d<\/p>\n
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.<\/p>\n
\u201cTreasurer: that\u2019s not an economic boom, that\u2019s economic stress. Don\u2019t spin it like that,\u201d he said.<\/p>\n
![\"Aussie](\"https:\/\/content.api.news\/v3\/images\/bin\/47600a7ccd920a0c6dc78f6e16a6c3b1\")
<\/p>\n
\u2018Incredibly irresponsible\u2019: Expert blasts claim<\/p>\n
The recent figures have also been slammed by veteran investor and Wilson Asset Management chairman Geoff Wilson \u2014 a vocal critic of the new tax changes and the cousin of shadow federal treasurer Tim Wilson \u2014 who said the boom was entirely artificial.<\/p>\n
Another finance expert \u2014 Jenny Wong, tax lead at CPA Australia \u2014 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.<\/p>\n
Mr Wilson believed the figures actually showed a phantom trend created by taxpayers fleeing Labor\u2019s new tax hikes.<\/p>\n
Pointing to the Budget\u2019s 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.<\/p>\n
\u201cThe 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,\u201d Mr Wilson said.<\/p>\n
\u201cThat is 100 per cent incorrect. It\u2019s people moving from trust structures, which will now be taxed at 30 per cent, to company structures, which \u2014 unless you have turnover over $50 million \u2014 are only taxed at 25 per cent.\u201d<\/p>\n
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.<\/p>\n
Recent research shows investors who bought the 20 most popular stocks six years ago would pay nearly double the amount of tax under Labor\u2019s changes to capital gains tax.<\/p>\n
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.<\/p>\n
Mr Wilson said 7.7 million Aussies bought shares and many of them were restructuring their finances in response to the budget.<\/p>\n
\u201cThe 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,\u201d he said. <\/p>\n
\u201cIf you had it in a pooled structure like a trust or a company, you offset the real loss against the real gain.<\/p>\n
\u201cIt\u2019s not to do with the health of the economy \u2014 the economy is getting sicker. It\u2019s a reflection of the cost that Aussies have to bear because of the insane capital gains tax that is being imposed.<\/p>\n
\u201cThe increase in tax \u2014 by the increased capital gains tax on Australian businesses \u2014 means fewer people are investing in Australian businesses. Small companies listed on the ASX are significantly underperforming.<\/p>\n
\u201cMoney is going away from growth companies, and \u2018growth\u2019 has now become a dirty word because of the new tax on success or aspiration that has been legislated by the current government.\u201d<\/p>\n
Mr Wilson pointed to ASIC\u2019s annual insolvency data that showed business failures had tripled.<\/p>\n
The data shows corporate failures reached a historic peak of 14,722 in the 2024\u201325 financial year as the Tax Office resumed aggressive debt collection.<\/p>\n
That\u2019s a near-tripling from the post-pandemic low of 4912 in 2021\u201322 \u2014 when government support and temporary statutory relief kept insolvencies artificially low \u2014 and sits roughly 79 per cent above Australia\u2019s long-term pre-Covid average of around 8200 company collapses per year.<\/p>\n
\u201cThe sharp increase in company registrations is evidence that Australia\u2019s tax system is changing business and investment behaviour,\u201d Mr Wilson said. <\/p>\n
\u201cRather than directing more capital into productive businesses, the legislation directs more effort into choosing the most tax-efficient legal structure.\u201d<\/p>\n
\u2018Don\u2019t act too early\u2019: Tax expert\u2019s warning<\/p>\n
Ms Wong said that while a surge in company creations aligns with expected behavioural shifts following the Budget\u2019s trust tax overhaul, the true test of trading activity lies in GST data.<\/p>\n
\u201cThe GST registrations reflect the amount of active businesses,\u201d Ms Wong said. <\/p>\n
\u201cIf 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.\u201d<\/p>\n
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 \u2014 meaning new corporate entities are forming at nearly three times the pace of active trading businesses.<\/p>\n
Ms Wong meanwhile has warned Aussies not to restructure their finances too quickly in response to the new budget measures \u2014 adding that business owners jumping the gun to restructure before final legislation is passed face severe financial risks.<\/p>\n
\u201cMost advisers would tell people: don\u2019t act until you see the design of the legislation,\u201d she said. <\/p>\n
\u201cIf people are restructuring without seeing the detail, there is a potential for states to levy transfer duty or stamp duty.\u201d<\/p>\n
Treasury hits back <\/p>\n
A spokesman for the Treasury told news.com.au Australia hasn\u2019t just seen a record number of businesses created since the budget, we\u2019ve also seen a record number of businesses created in the past year, and in the past four years.<\/p>\n
\u201cMore than 1.3 million new businesses have been created since Labor came to office, that\u2019s a record for any four-year period,\u201d he said. <\/p>\n
\u201cWe\u2019re 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\u2019re backing them.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Jim Chalmers has doubled down on his claims that business is booming in Australia, leading to stunned 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