Paul Keating urges Labor to stick with capital gains tax overhaul and avoid exemptions that would hurt economy

Paul Keating says correcting the balance in taxation between capital and labour should ‘be and remain the over-riding objective’. Photograph: Bianca de Marchi/AAP

Paul Keating has urged Labor to stick to its guns on controversial changes to capital gains tax, warning that exempting commercial assets from the changes would further “distort” the economy.

Small business and the startup sector are fighting the Albanese government over its plans to shift the 50% capital gains tax discount to an inflation-based model, part of a suite of tax reforms announced in this month’s federal budget.