On toddlers and tech bros
The worst part about losing an argument with my four-year old is that she’s not happy either.
She’s fuelled by irrational confidence, an assurance that she’s special and a firm belief that “no” is just a suggestion. In a way, she’s a lot like a tech bro.
When Australian tech founders got their way, and the Government’s proposed CGT reforms were scrapped, they didn’t accept the concessions. They still weren’t happy.
The government’s reforms had proposed reducing a discount that still exists, still benefits founders, and still places them in a more favourable position than most Australians.
The response from parts of the startup community had the energy of a toddler who finally gets a cookie, is asked to share it with their brother, decides that sharing is theft, before throwing herself to the ground kicking and screaming. A purely hypothetical example that in no way constitutes my day-to-day life.
Furious. Aggrieved. Making memes.
I don’t know that anything could be done to please them. But at least toddlers grow up (I hear teenagers are notoriously agreeable).
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The argument founders make is that start-ups occupy a special category of economic contributor. They create jobs. They take risks. They drive innovation.
The implication – rarely said aloud, but always present – is that this work is more valuable to society than others’ and therefore deserves preferential treatment at tax time.
It’s an argument worth taking seriously.
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Are there categories of jobs?
For this to be true – and for startup founders to be entitled to preferential treatment – all roles would need be taxed on a curve based on the service provided. Does a nurse deserve to pay less tax than a accountant? Than a lawyer? What about an astronaut? (we have one!)
Such a calculus would be enormously taxing (pun very much intended) and require an ongoing assessment of what we, as a society, need and value.
It would also require universal agreement on what – and who – matters most. While you might think that “Paramedic who resuscitates child” is more valuable than “Guy who lets consumers pay in four chunks”, our system makes the latter over 1,000 times richer.
The complexity, ambiguous ethics and sheer difference of opinion means that the tax system can't function like that. True, some workers do get carve-outs – healthcare and charity staff, for instance, can salary-package basic living costs pre-tax – but these are narrow, capped exceptions, nowhere near the scale of the fortunes flowing to tech founders.
For the most part, if you earn $120,000 in Australia, you pay the same rate whether you’re a teacher, a banker, or a finally sacked football coach.
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On job creation
There's a degree of hypocrisy in all the "we create jobs" argument, because so much of what tech founders dismiss as government wastage of taxpayers dollars, is job creation. Yes, there's waste, and sure, some things could be trimmed – but the single biggest employer in the economy is the government, funded by the tax dollars some of these voices would rather not pay.
The Australian public sector employs around two and a half million people – roughly one in six Australian workers – across healthcare, education and public safety, keeping us all alive, educated and chaos-free. Work society can't function without.
Job growth matters. But to pretend the tech sector is the only place it happens is disingenuous, and ignores the millions doing essential work every day, without asking for a tax break.
It’s also worth considering what these companies are building, given emerging AI start-ups base their value on cutting jobs, rather than creating them.
Depending on whether you believe the Anthropic or Microsoft CEOs, AI technology will eliminate half – or all – of entry-level white-collar jobs within the next five years (a marketing pitch only marginally less shameful than declaring “Our Mythos model is too dangerous to release” then releasing it a few months later anyway while quietly conceding that a range of other, lesser models could identify and exploit the exact same vulnerabilities).
Australian start-ups Relevance, Frankie and Lorikeet all pitch some version of “scale without headcount”, allowing their clients to grow without having to create jobs. What should their tax status be?
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On risk
The huge risks founders take can last years. They forgo the stability of a salary and can burn through savings in pursuit of their dreams. It takes enormous courage to found something. They deserve our praise.
The risks they take though are primarily financial, and are cushioned by the things we all rely on (though don’t all rally against); Medicare and Centrelink. A floor that exists regardless of how badly a venture may fail.
The beauty of financial risk is that it creates second and third chances. Founders with the capital and networks to start a company, may have the capital and networks to recover from failure. Repeat founders exist and are rightly celebrated (turns out people prefer Canva to online school yearbooks).
These second chances distinguish them from others who regularly take non-financial risks in the course of their work.
The construction worker who falls from scaffolding doesn’t get a second chance. Neither does the firefighter who rushes into the collapsing building, the farmer operating heavy machinery, or the truck driver navigating slippery roads.
Risk is everywhere in our employment market.
The risks that founders take – while very real and very scary – aren’t necessarily special.
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On innovation
Technology companies do innovate, but too often it's innovation in search of a market rather than a problem worth solving. So much of it is tech for tech's sake: products engineered to capture our attention and sell it to advertisers, dressed up as progress.
Recently, Australia's most significant tech innovation was a decision not to use technology.
Banning social media platforms built on "manipulative algorithms" and "dark patterns" for children is innovation. Innovation pioneered by government to help children. It’s global leadership we can be proud of that’s now being followed in Brazil, Indonesia, the UK, France and Spain. America, meanwhile, is deploying their culturally appropriate response to the tech giants – legal action.
For all the noise from our own tech industry, Australia's most celebrated innovations have historically come from the public sector. CSIRO's research gave the world the patents behind modern wi-fi and UNSW remains a global leader in solar photovoltaics. Universities still do the bulk of the country's R&D. Innovation funded by tax dollars.
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Bringing it all together
The tech bro argument also overlooks the reality that most competent founders have already arranged their affairs so they’re not paying the full tax rate anyway. As all of us try to do.
A structural failure of modern tax systems is that the wealthiest individuals enjoy much lower effective tax rates than other social groups. This has been documented exhaustively.
The concessions being fought over, for the most part, sit on top of existing arrangements that already substantially reduce the tax burden. The theatrics of the debate obscure its stakes. The people loudest about tax relief are often those who have the least need for it.
The guy leading the meme war sold his business for $180 million. Even if he only owned 1% at exit, that $1.8 million would take the average police officer 18 years to earn. He can pay some tax.
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I wonder if this debate isn't really about tax rates. It's about what you believe tax is, and where you think our responsibilities lie. Do tax dollars fund ours and our children's lives? Or are they theft, blown on government incompetence and corruption, money better left in our own hands?
As an aside, let’s not pretend government is the only place where money is wasted. The world’s weirdest tech billionaire blew US$80 billion chasing his metaverse. Eighty billion dollars (I feel like it needed to be written in words) and the avatars still didn’t have legs.
I believe the best countries – what we should aspire to be – are those where the wealthy use public systems. Where they send their children to public schools, attend public hospitals, ride public transport, and share a stake in those things working well.
The alternative is bifurcation: two parallel societies, one subsidised by the other, wrapped in aspirational language that grows harder to believe as the gap widens. And brother, it is widening.
Australia sits between those two visions.
We can choose which stories we want to tell our kids about whose work matters, whose contributions count, and who deserves to keep more of what they earn.
We need to consider the possibility that the nurse and the teacher and the firefighter are not merely beneficiaries of a system built by smarter people, but its architects. That paying tax is not something done to you, but for you.
That contributing to the national story is not a punishment for success, it’s a form of it.
That’s the lesson I want to teach my daughter.
I hope she doesn’t grow up wanting to be a tech billionaire. I’d rather she was happy.