SYDNEY — Australian startup founders posted AI-generated images of Prime Minister Anthony Albanese as their new company founder after budget night to protest the federal government's planned capital gains tax changes. The proposal would replace the 50% tax discount on profits with cost-base indexation and set a minimum tax rate of 30%.

Tech entrepreneurs warned that the increased taxes could push people away from working for new businesses or send startups overseas. The Tech Council of Australia warned that employee equity and founder motivations could be affected by the planned changes.

Jacques Greeff, founder of the communications app Kinso, posted AI-generated images showing Albanese in his office with Kinso staff coding their product and working with customers. "He's having a great time with his new 47% equity." he wrote. "With the tax changes, the incentive to grow a business is greatly reduced, but all the normal risks remain," he said.

"Australia should be encouraging young founders to build the next Canva. My fear is they don't even attempt it now or, worse, they go overseas and build the next unicorn and Australia misses out entirely," Greeff said.

Julian Fayad, chief executive of LoanOptions.ai, posted AI images of Albanese sleeping in his company's office and scrolling on his phone. "With the 47% CGT, the government's message to founders like me is that if we succeed, they want nearly half of the hard-earned reward," Fayad said.

"When I look at what countries like Singapore and the UAE are doing to attract and retain founders; the incentives, the structures, the genuine support, and then look at what Canberra is doing, it's hard not to feel abandoned and hindered," he said. Fayad took part in a roundtable meeting in Sydney hosted by Shadow Treasurer Tim Wilson where founders were critical of the government's changes, and joined Wilson at a media conference afterward.

Alfie Robertson, founder of the video editing app Roll, posted AI-generated images of Albanese in a gym, recording a podcast, and working on strategy. "Policies like this shape where founders choose to build, invest and stay. If Australia wants to compete globally for talent and innovation, it should be rewarding people who take productive risks to build companies, create jobs and grow the economy, not reducing the incentive to do so," Robertson said.

Janine Allis, cofounder of Boost Juice, warned that winding back capital gains tax discounts would discourage innovative businesses.

Albanese said he wanted to support innovation and pointed to a range of budget incentives for research and development and instant asset write-offs. Treasurer Jim Chalmers said consultation was continuing with the sector, and the Tech Council of Australia welcomed new R&D tax incentives and reforms to venture capital regulation while seeking further consultation on the capital gains tax changes.