Budget AI boost hailed as CGT changes draw criticism

Technology and digital asset leaders have warned that measures in the Federal Budget could weaken incentives for long-term investing, even as they accelerate large-scale adoption of artificial intelligence and digital identity in Australia.

The response reflects growing concern over proposed capital gains tax changes, alongside strong support for expanded funding for AI and digital ID.

Kraken Australia general manager Jonathon Miller said changes to the 50% capital gains tax discount could weaken one of the few clear policy levers encouraging Australians to invest for the long term. Digital asset trading has grown rapidly in recent years, drawing a large cohort of younger retail investors.

Many of those investors already feel under pressure, he said. Internal Kraken research found that more than three quarters of Australians surveyed believe they are falling behind their financial expectations.

"By removing the 50% CGT discount, the Budget risks making it harder for Australians to take a long-term approach to investment. Kraken's research has shown that 76% of Australians feel they are falling behind where they expected to be financially. For the digital asset industry, where assets are traded 24/7 with low fees and friction, these changes mean the comparative penalty between active, short-term trading strategies and more passive, long-term 'buy and hold' strategies will diminish.

Taking a long-term view of investment has historically been a great way to build wealth. Because of this, we'd have liked to see the changes limited to housing, where much of the public concern around intergenerational fairness is centred. If the policy goal is intergenerational fairness, reform should be carefully targeted at the assets and behaviours driving that concern, rather than reducing incentives for long-term investment across the board."

Miller's comments place digital assets within the broader debate over intergenerational equity and housing affordability that has shaped much of the Budget response. They also underscore concerns that policy changes could push more investors towards short-term speculative trading.

While digital asset advocates focused on tax settings, enterprise technology leaders centred on AI and data infrastructure. The Budget outlined measures to expand support for AI research, industry adoption and digital infrastructure across government and business.

Glean chief operating officer Amar Maletira said the announcements show AI is moving from experimental pilots to a core economic and productivity priority. He argued that the main challenge now is execution, not intent.

"Tonight's budget reinforces that AI is becoming a serious economic priority for Australia. That is the right signal. The companies seeing the strongest returns from AI are not treating it as a one-off technology investment or a set of isolated pilots. They are making AI useful across the workforce, so every employee can access the right knowledge and context in the flow of work. For many organisations, the challenge is no longer interest in AI. It is execution.

Australian businesses have the appetite, but real value depends on connecting AI to the tools, systems, data and workflows employees already rely on every day. AI that sits inside a single application can only go so far. The bigger opportunity is an enterprise-wide layer that helps people find information, make faster decisions and turn knowledge into action. Australia has the talent, enterprise base and momentum to move quickly. With the right investment, more organisations can move beyond experimentation and build the foundations for AI at scale. The businesses that act now will create an advantage that compounds over time. Those who treat AI as a budget line item will still be stuck in pilot mode."

Identity security specialist Okta pointed to the Budget's continued support for digital ID rollout and the modernisation of online public services, arguing that expectations of digital government have risen sharply.

"The Federal Government's continued investment in Digital ID capability and modern digital services is an important step forward for Australia's digital future. Australians increasingly expect government services to be digital-first, seamless and secure. Initiatives that reduce friction while strengthening trust and security are an important step forward. Efforts to simplify how Australians access services and reduce the unnecessary sharing of personal information will become increasingly important as more services move online.

As agencies continue accelerating digital transformation and AI adoption, identity is becoming central to how modern services are delivered and protected. The challenge is no longer just managing people accessing systems. Increasingly, applications, automated services and AI agents are also interacting across environments and services, often at scale. That changes the security conversation.

Identity security plays a critical role in helping organisations understand who, or what, is accessing systems, what they can access, and how that access is governed in real time. Australians will embrace digital services when they are simple, trusted and secure. As government modernisation continues, building strong identity, governance and privacy protections into these systems from the outset will be critical to maintaining that trust in digital services."