The High Flyers Podcast with Vidit Agarwal
00:05:48 · Alan Joyce, Vidit Agarwal
[00:05:48] S1: Yeah, it was interesting, because they were talking about putting us into remedial class in high school, and then the teachers did a few tests, and then I found out that I was just switching off in class because I was digesting it so fast. Was I lucky that was caught at an early stage before it became a problem. But you know, that can happen to kids, when you have big class sizes, which we did at the time. [00:06:15] S0: Yeah. A constant theme that I think you've talked about and that you've reflected on in the book and came up in all the people I spoke to is you've always believed in standing up for yourself and for your views. Apparently you've had that since day dot. Can you reflect on that for a moment? I think in the book you talk about your mum being at a fish market or something, and she asks for a refund or something like that, and she doesn't get it, and she stands up. Where does that approach come from?
00:06:42 · Alan Joyce, Vidit Agarwal
[00:06:42] S1: It definitely is in my family. It comes from my mother. My father was very placid, easygoing, but my mother always had this drive and this this really view that you shouldn't let people walk all over you. And there's a story, I think I was 10, 11 or 12 in that age group, came home on a Friday. My mom was cooking fish that she got from a little van up the road. She had a cold, so she couldn't smell the fish. And we bought... Had our first bite of it and found it was off, and I said to my mom, it's off. So she immediately marched up with the fish to the van and asked this guy for a refund. He refused. She then started protesting outside the van. And around three hours later, I went up, and I said, ma'am, come home. We're all starving. And the guy overheard us talking, and my mom says, I'm staying here all night because he refused to be phoned this bad fish that he's given us. And he he overheard us, and I was begging for her to come back, overheard us, and he finally relented and gave her the money. But it was a it was built into me from an early age that you need to stand up when an injustice happens and making sure that people don't walk all over you. And I think my man has that characteristic still today. [00:07:59] S0: And did you know that about yourself, like, from an early age? Did you have that understanding about your own self?
00:07:59 · Vidit Agarwal, Alan Joyce
[00:07:59] S0: And did you know that about yourself, like, from an early age? Did you have that understanding about your own self? [00:08:06] S1: Think so. I think I always knew that was part of a, you know, I saw some of the guys that I worked with said, you know, that it came out more when they read the book, particularly those early chapters. So, you know, the guys that were reported to me when I was head of quantums, they were all aiding me with writing the book. And a lot of them said, God, that was very telling, those family chapters, particularly your mother and her upbringing, and how she she saw the world, because that's exactly you. And I definitely am my mother's son when it comes to that. I think a couple of my brothers are exactly the same. [00:08:40] S0: The other story that I found really intriguing from your book is the karate story. [00:08:46] S1: Yes. Think [00:08:46] S0: you reflect on that your brothers were very good at karate. I think they went on to represent Ireland, some of them. But then you realized you weren't good. I think you, I think the term you use in the book is a second fiddle, and you decided to on that for a moment again, is that central to your personality where if you're not good or one of the best, you'd rather not do it?
00:08:46 · Vidit Agarwal, Alan Joyce
[00:08:46] S0: you reflect on that your brothers were very good at karate. I think they went on to represent Ireland, some of them. But then you realized you weren't good. I think you, I think the term you use in the book is a second fiddle, and you decided to on that for a moment again, is that central to your personality where if you're not good or one of the best, you'd rather not do it? [00:09:08] S1: Yeah, that's one of my regrets also, Vidit, because what happened was we all started at the same time, we were all doing karate, we were all enjoying it, and then I had an important exam that was coming up. It was high school exams that were important for your next level of education. So I took a break from it, and then when I went back, my brothers were a lot better. And we were really competitive as kids, you know, particularly me and my brother Anthony. And then I felt when I was back in Cratie, they were teaching me. So it became part of who I am. I said, I can't be second fiddle to my younger brothers. And I do regret it because they went on to become black belts. They're pretty... They were pretty good areas. It would have been a good discipline to actually have. But that competitive nature and having a deficit at the time, which I probably could have caught up with, encouraged me in my mind not to do it. Yes, if you're not really good at something, then move on and try something different. [00:10:07] S0: Back to the episode in a moment. I'm now joined by Rhea Nielsen, Managing Associate at one of our wonderful partners, Allens. Welcome Rhea.
00:10:07 · Vidit Agarwal, Rhea Nielsen
[00:10:07] S0: Back to the episode in a moment. I'm now joined by Rhea Nielsen, Managing Associate at one of our wonderful partners, Allens. Welcome Rhea. [00:10:16] S3: Thanks very much for having me. [00:10:19] S0: I'm happy to have you on. I believe you are an expert in the topic that we will educate our listeners on. Tell us about the recent capital gains tax changes and why have they apparently caused concern for the startup and venture capital community?
00:10:36 · Rhea Nielsen
[00:10:36] S3: So we're actually seeing quite a lot of tax reform in Australia at the moment. But one of the changes that's probably had the most attention is the removal of the 50% capital gains tax discount, which Australians have relied on for decades really. And so for gains which are accruing now from 07/01/2027, so next year, that discount's generally being replaced with an indexation system, and also introducing a minimum 30% tax on capital gains as well. And so what that means in very simple terms is when you sell an asset such as a share on exit, you'll need to adjust what you paid for it, which is your cost base for inflation. And so what you're then taxed on is really the real gain that you've made at that time. And that might work really well for someone that's bought into an established business. They've paid real money for their investment, that amount gets adjusted for inflation. So when they sell, they'll have a decent kind of cost base there to reduce their capital gain. But startups are quite different. Founders and early stage investors, they often get their equity when the business itself is not worth very much at all. And so when the business then takes off and you're thinking about what's my capital gain on exit, indexing a really small starting value doesn't get you very far at all. And of course, having a business take off and do really well is a good problem to have and everyone would like that. But without some form of relief, you can now possibly be taxed or hit with a tax bill and exit, is almost double what you would have had under the current system with that discount. So understandably, that's all led to concerns that the changes could possibly make Australia less attractive for early stage investment.