Labor’s capital gains tax will hit women founders hardest – Australian Financial Review

You cannot claim to support women’s economic empowerment while simultaneously implementing policies that make female entrepreneurship harder to sustain.

Australia loves talking about women’s financial independence.

Governments promote entrepreneurship, innovation and economic participation as pathways for women to build security, flexibility and wealth of their own. We constantly hear about the importance of getting more women into business, leadership and technology.

But when you look beneath the slogans and the political messaging, a very different picture emerges.

Women founders in Australia already receive only a tiny fraction of start-up funding. Multiple reports over recent years have consistently shown female founders attract around 4 per cent of venture capital investment, despite growing evidence that women-led businesses often deliver strong returns and sustainable growth.

That means women are already operating in an environment where investors often view them as “higher risk”, whether justified or not.

Now enter the proposed capital gains tax changes from the federal budget.

The backlash from the start-up and investment sectors has been immediate, with concerns that the reforms could reduce investor appetite for high-risk ventures and long-term growth investment.

And here is the uncomfortable question almost nobody is asking: If investors become less incentivised to take risks, who gets cut first?

It will not be the already well-connected founder networks dominated by men.

It will be women.

Because when capital tightens, investment historically becomes even more concentrated into “safe” and familiar founder profiles. In Australia’s start-up ecosystem, that often means male-led tech companies with established investor relationships and stronger access to networks.

There are now discussions about potentially creating carve-outs or exemptions for the tech sector to protect innovation and investment.

On the surface, that sounds reasonable. Governments do not want to damage economic growth or discourage innovation.

But tech also remains one of the most male-dominated investment ecosystems in the country.

So if governments create protections for industries and founder networks already dominated by men while removing incentives elsewhere, we need to be honest about what that could mean in practice.

Not necessarily intentionally. But structurally. And women have seen this before.

What many policymakers fail to understand is that founders often spend years building businesses before they ever see meaningful financial return themselves.

Particularly for women, it is common to pour years of unpaid labour, personal financial risk and reinvestment back into a business simply trying to get it to a level where it is investable or sustainable.

During that time, they are still paying taxes, employing people and contributing to the economy, while many barely pay themselves.

For countless founders, the eventual sale of a business is not some luxury windfall. It is the first genuine opportunity to recover years of sacrifice, risk and underpayment.

So when governments increase the tax burden at the point where founders finally see a return, many are left asking a reasonable question: What was the point?

Because after years of financial uncertainty and personal sacrifice, some founders may actually end up worse off than if they had simply stayed in salaried employment from the beginning.

Australians are increasingly being encouraged to view anyone who successfully builds wealth through business as someone who “deserves” to be taxed harder simply because they have eventually become successful.

That deliberately blurs the line between everyday entrepreneurs building businesses from scratch and multinational corporations deliberately structuring themselves to avoid paying tax altogether.

Those are not the same thing.

A woman spending ten years building a company, reinvesting profits back into growth, taking personal financial risks and eventually selling that business is not comparable to multinational corporations shifting profits offshore while paying minimal tax in Australia.

Yet politically, they are increasingly being lumped together.

And, conveniently, the public focus often falls on founders and small business owners rather than on multinational corporations with enormous lobbying power and sophisticated tax-minimisation structures.

Because targeting entrepreneurs is politically easier.

Small business owners do not have armies of lobbyists in Canberra. They cannot move profits offshore. And they are easier to portray as privileged once they eventually achieve success.

And this is where another uncomfortable question emerges.

Who actually benefits when female entrepreneurship becomes harder?

Large parts of Australia’s political and industrial systems are built around employees, not entrepreneurs.

Employees are easier to tax. Easier to regulate. And easier to organise collectively.

Women running independent businesses are building assets, equity and long-term financial independence outside traditional employment systems.

But if entrepreneurship becomes too difficult, too risky and too heavily taxed, many women will inevitably be pushed back into traditional workforce structures instead.

And while unions absolutely play an important role in protecting workers’ rights, unions do not grow their membership from women running independent businesses.

They grow from employees.

That is why many women are beginning to question whether female entrepreneurs are quietly becoming collateral damage in broader economic and political debates.

Because financial independence for women does not come from slogans.

It comes from ownership. Assets. Investment. Business equity. And the ability to build wealth over time.

You cannot claim to support women’s economic empowerment while simultaneously implementing policies that make female entrepreneurship harder to sustain.

The real question Australia now needs to answer is this: Do we genuinely want women building independent wealth and businesses of their own?

Or are we creating an economic system where female entrepreneurship becomes so difficult and so under-supported that women are ultimately pushed away from ownership and back toward survival?

This was originally published as an opinion piece in the Australian Financial Review