ACCI warns Labor’s new tax laws risk investment and jobs as Andrew McKellar calls for rethink
By Inside Canberra
Australia’s peak business body has issued a fresh warning over the Albanese Government’s recently passed tax legislation, arguing it risks undermining business confidence at a time when economic conditions are already deteriorating.
Speaking following the passage of the legislation, Australian Chamber of Commerce and Industry (ACCI) Chief Executive Officer Andrew McKellar warned that while businesses recognise the Government’s broader fiscal objectives, the reforms could have unintended consequences for investment, employment and Australia’s international competitiveness.
McKellar argued particular care must be taken to ensure Australia’s capital-intensive industries—including mining and the critical minerals sector—are not placed at a competitive disadvantage by the new policy settings.
“We have to ensure that critical sectors—the mining sector, which is capital-intensive, critical minerals—they’re not disadvantaged by the changes that are proposed,” McKellar said.
He added that businesses seeking to invest in innovative technologies require confidence that Australia’s tax and regulatory settings will remain stable.
“Businesses need to be able to invest with confidence. At the moment, they can’t do that.”
Critical industries and innovation in focus
The ACCI’s concerns extend beyond traditional resource industries.
McKellar said businesses looking to adopt new technologies need certainty before committing significant capital, warning that uncertainty surrounding the Government’s taxation agenda risks delaying investment and slowing productivity growth.
The comments come as Australia seeks to expand advanced manufacturing, clean energy industries and critical minerals processing—sectors requiring substantial long-term investment.
Trust reforms labelled “a whole new can of worms”
McKellar also used the press conference to criticise foreshadowed reforms affecting discretionary and family trusts.
Describing the proposed changes as “a whole new can of worms”, he warned they would introduce significant complexity for Australian businesses and family enterprises.
“The changes to discretionary and family trusts are very complex changes… they will present very significant difficulties for business and for the economy equally.”
He urged the Government to reconsider the proposals before introducing further legislation.
Trust structures are widely used by family-owned businesses, farming enterprises and professional practices, making any reforms likely to have broad implications across the economy.
Business confidence under pressure
Responding to questions from reporters, McKellar said the legislation arrives at a difficult time for Australian businesses.
He pointed to declining business confidence, ongoing conflict in the Middle East, higher fuel prices, disrupted supply chains, elevated interest rates and renewed inflationary pressures as factors weighing heavily on employers.
“We’ve seen on all the business surveys that we’re looking at there’s been a sharp drop in business confidence over recent months.”
McKellar also warned unemployment has begun trending higher and said governments should avoid policies that discourage investment during an uncertain economic period.
“We cannot take for granted that the labour market will continue to be as strong as it has been in the past.”
According to the ACCI, businesses require confidence and policy certainty before expanding operations or taking on additional employees.
A growing divide over tax policy
The latest intervention underscores the growing divide between the Albanese Government and Australia’s peak business organisations over the direction of tax reform.
While the Government argues the legislation strengthens the budget and delivers greater fiscal sustainability, employer groups continue to warn that increasing tax burdens during a period of slowing economic confidence risks discouraging private investment.
With additional budget measures—including proposed trust reforms—still expected to come before Parliament, the debate over Australia’s taxation settings appears far from settled.
For the ACCI, the message remains clear: sustainable economic growth depends on encouraging investment, supporting business confidence and ensuring Australia’s tax system remains internationally competitive.