Australia loves unicorns, so why are we taxing go-getters like me, Mr Chalmers?

Australia loves a founder story. We revere Canva, Atlassian and Afterpay. We talk about unicorns with awe. We love the garage origin story, the big idea, the brave leap, the company that starts local and goes global. But we are making it harder for the next generation of founders to take that leap at all.

Building a start-up is not just hard work. It is self-belief under pressure. It is creativity, risk and resilience. It is leaving a stable job when everyone else tells you to keep one. Working nights, weekends and public holidays. Going without a meaningful salary for years, using your savings, asking friends and family to back you with money they cannot afford to lose.

Founders don’t just build businesses. They carry the emotional weight of everyone who has believed in them, and backed them with their wallets. And increasingly, they are being forced to ask: for what?

When I represented Australia at the G20 Startup20 engagement group in India, I was struck by the scale of government support available to start-up ecosystems in comparable economies. The contrast with Australia was uncomfortable. We celebrate our founders in retrospect. We do not yet structure policy to back them in the doing.

While Tuesday’s federal budget includes some welcome measures, including reforms to the R&D tax incentive and loss refundability for early-stage companies, the removal of capital gains tax concessions is seismic for founders. R&D support is welcome, but it does not fix the bigger problem. The system still rewards investors more clearly than it recognises the founders taking the first and greatest risk.

There are incentives for investors through Early Stage Innovation Company (ESIC) tax offsets. But where are the meaningful incentives for founders?

A founder’s gain on exit is different. It is not passive appreciation. Consider the maths. A founder starts with an idea, so their cost base may be close to zero. Five years later, the company sells for $10 million.

On paper, it sounds life-changing. But after capital raising and employee share plans, that founder may own only 30 per cent. Their proceeds are $3 million. Without a CGT concession, almost all of that may be taxable. At a minimum tax rate of 30 per cent – and the potential to reach 45 per cent for investors on the top marginal income tax rate – plus the 2 per tax cent Medicare levy, that is up to $1.41 million in tax, leaving $1.59 million. Now factor in what they gave up. If that founder left a $200,000 job, plus 12 per cent super, they have forgone $1.12 million over five years.

Adjusted for that opportunity cost, the real economic reward is closer to $470,000, before accounting for the weekends, public holidays and annual leave they likely worked through. Suddenly, the reward for years of risk, pressure and dilution looks very different.

That is why this reform matters so much for start-ups. If the tax system does not recognise the uniqueness of that journey, we are not just taxing a gain. We are taxing courage.

The 2024/2025 budget spoke ambitiously about a Future Made in Australia. That language has quietly disappeared. But the underlying question has not: if we are serious about building new industries, new technologies and new jobs, we need to back the people building them. That requires structural change in four areas.

First, proper representation. Australia needs a founder-led peak body that can advocate on policy reforms, tax, capital, talent and procurement support. Too often, founders become the unintended casualties of reforms designed without us in the room.

Second, founder-specific tax settings. Cashflow in a start-up is measured through a fine needle. If investors receive incentives for backing early-stage companies, founders should not be left carrying the first and greatest risk with no corresponding recognition. At minimum, the government should create a CGT carve-out for qualifying start-ups, using the existing ESIC framework, or an equivalent innovation test, at the time shares are issued. That targets genuine start-ups without opening the door to every asset class. The reward has to match the risk.

Third, better tools to compete for talent. An ESOP (employee share option plan) matters, but every option pool dilutes founders further, and offering staff equity in the business doesn’t always hold against a higher salary offer from a better-resourced competitor. Government should explore salary-packaging concessions for qualifying start-ups, similar in spirit to benefits available to the not-for-profit sector, so founders can offer employees more effective take-home value without destroying cash flow.

Fourth, more liquidity. Not every start-up needs to become a unicorn – that is, a business valued over $1 billion. We should normalise successful, valuable companies that can be traded, acquired or partially exited earlier. Where might the extra liquidity come from? It could be tax incentives for businesses wanting to acquire start-ups, or better financing systems for them to take that plunge. It might come in the form of government subsidies or grants. More liquidity means more confidence, more recycled capital and more founders willing to go again.

This matters because productivity is not just an economic metric. It is motivation. It is the belief that effort leads somewhere. Quiet quitting, lying flat, the rejection of hustle culture – these are symptoms of a deeper question: why work this hard if I cannot get ahead? For founders, that question is becoming sharper every year.

Australia already relies too heavily on the old engines of wealth: property, banking and mining. If we want the next Airwallex or Mecca, we must rebuild the conditions that make founding a company worth the risk.

The great Australian dream cannot only be about buying a home. It also has to be about backing yourself, building something, and knowing your country is willing to back you, too. Australia loves the mythology of founders. But mythology is not policy. It is time to act like we mean it.

Shivani Gopal is an entrepreneur and founder of Elladex, a leadership consultancy.