As it faces fierce opposition, Labor appears to be pushing ahead with its overhaul of the tax.

It plans to introduce legislation — that pulls together multiple budget measures to the House of Representatives — on Thursday.

They include the $250 tax offset for workers, a $1,000 standard tax deduction, along with CGT and negative gearing changes. This makes it harder for the opposition to oppose the changes as it planned to support the $250 offset.

This created widespread confusion over how far Labor was willing to go on changes to the budget and whether it was setting the stage for a major backflip.

Private hedge fund manager and former NSW government economist Derek Francis said he had sold $400,000 of shares in the past couple of weeks after realising the full implications of the government’s capital gains tax overhaul for the sharemarket.

This morning, the former staffer for Liberal politician Paul Fletcher launched an official complaint with the ACCC. He said up to 1000 major investors were about to sign it.

“I’ve just lodged an official complaint with the ACCC, asking (the chair of the body) Gina Cascogli to get the government to immediately back down because the behaviour is anti-competitive,” he said.

“The reason why is they’re (the government) is raising the price on us by 40 and 50 per cent which makes share trading unviable.”

He said the CGT changes will force his clients to sell their portfolios and go into a managed fund.

“And we can only go into one managed fund. We can’t go into multiple ones that are similar in one managed fund,” he said.

“Then we’re basically trapped. Because they can up the fees on us. So it’s clearly blatantly anti-competitive conduct. They can just jack up the fees and you’re absolutely f***ed. It’s absolutely crazy.”

‘We’ll blow up 30pc of the economy’

He is also predicting the Prime Minister will make a spectacular U-turn, citing the government’s change in position on carve-outs.

“He has to back down because Treasury now realises it’s a fundamentally flawed policy that will blow up the economy,” he said.

“Commonwealth Treasuries advise him not to proceed with the policy because of the damaging effect to the economy. If it actually goes ahead, we’ll blow up about 20 to 30 per cent of the economy.

“This is one of the most dangerous times I’ve ever seen in the Australian economy, and I don’t know how the government could be so reckless.”

He said the changes would force 80 or 90 per cent of direct retail shareholders into a single managed fund, or pay taxes that are 40 or 50 per cent higher than if they held them as part of the managed fund, which is unviable.”

He said the biggest concern with the indexation change is the asymmetric treatment of winners and losses.

“It’s not that it applies to certain sectors, it’s a structural flaw where the only way it won’t create devastation is if a particular party it backs is exempted, in which case you have to exempt everyone,” he said.

Mr Francis said he had sold his shares because Australia had become “completely uninvestable” outside of superannuation under the new tax settings.

“And the reason why is because everyone puts up risk capital. They always invest subject to uncertainty,” he said.

“And if you invest in a regime where you win, the government takes a lot. If you win, the government takes 70 per cent, but if you lose, you lose the full 100 per cent. If that happens, then risk capital just stops being invested. The economy essentially comes to a complete grinding halt.”

‘They are making it up as they go along’

Mr Albanese’s comments on Monday came after he had already indicated last week that Labor would rethink its raid on testamentary discretionary trusts — a part of the budget reforms that has been likened to a “death tax” by a “thousand cuts”.

Now, industry leaders say it appears the budget measures are being retrospectively “patched up”.

One business leader told The Australian that the government had not expected the extent of the backlash over CGT and government discussions were shifting on an almost “daily” basis.

“They are making it up as they go along,” they said.

Ryan Stokes, chief executive of CGH, a diversified operating company, said his company is actively looking at shifting investments overseas for the first time.

“We are being quite transparent,” Mr Stokes told The Australian. “We are looking at geographies outside Australia, ­because the investment environment here is changing, and it’s not becoming more attractive, and so we need to look at other markets, and that’s our soft signal.”

Deputy Leader of the Opposition Andrew Hastie also spoke on Sky News this morning, saying the government’s changing of its position amounted to a “complete shambles”.

Mr Francis said the government’s argument that the changes are just reverting back to pre-1999 conditions when the sky didn’t fall down is “bulls**t”.

“Before 1999, you didn’t have everyone on the internet trading in real time. You’d call up your broker and maybe buy a share or two a week,” he said. “So to think somehow that 1999 is relevant, is ridiculous when the economy’s progressed 27 years and you’ve got 10 million people, including 5 million youngsters that buy and sell crypto — they weren’t doing that in 1999.

“It’s the most ridiculous argument ever.”

Arjun Paliwal, CEO of InvestorKit and a property investor with much of his $20 million portfolio held in company structures, said young Aussies will be hardest hit by the changes.

He said wealthy investors are largely protected from these changes through sophisticated company structures, while mum-and-dad investors and middle-class Australians will be hit hard.

However, he said Young Gen Z and millennial “rentvestors” trying to build wealth could become the biggest losers of all.

“This budget won’t touch wealthy investors like me. It will hit the middle class and young Australians trying to get ahead,” he said, warning these reforms may lock an entire generation out of wealth creation.

Businesses want a ‘complete reset’

Business groups have argued the changes could also push talent offshore.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said rather than focusing on carve-outs, the changes needed to be completely rethought..

“We are concerned carve-outs here and there would be wholly inadequate,” he told the ABC. “What is needed is a complete reset.”

He said the legislation should be paused to “avoid unintended consequences” for businesses until the consultation is complete.

“There is no need to introduce legislation that is damaging to business and rush it through parliament,” he said.

“We are all in favour of tax reform, but it has to be reform that benefits the economy, and you don’t do that by taxing business investment.”

PM confirms consultation

Mr Albanese announced on Monday that Labor would consult small businesses to develop a position paper ahead of a second tranche of legislation dealing with CGT carve-outs.

Asked whether any carve-out would be limited tightly to tech start-ups, Mr Albanese pushed back on Monday, insisting “that’s not what we said on budget night”.

“Treasury are going about consulting, not just in tech, but consulting ACCI (the Australian Chamber of Commerce and Industry),” Mr Albanese said.

A policy position paper would be produced for broader consultation before a second tranche of legislation dealt with implementation details.

The Prime Minister confirmed the first legislation would be introduced on Thursday, containing four core elements: income tax cuts, a $1000 standard deduction, capital gains tax changes, and negative gearing reforms.

A second bill would follow to deal with implementation specifics.

Asked directly whether Australians would pay more or less tax, Mr Albanese said: “This is tax reform, and it’s tax reform that’s been called for a long period of time.”

— with additional reporting from Samantha Maiden