Sell before the recession, or before the tax change?

What Joye said

Coolabah Capital's Chris Joye spent his appearance on Mark Bouris's Straight Talk podcast this month doing what bond investors do: pricing the downside. His call for Australia is a recession. For anyone buying or selling a business, four parts of it matter.

• Failures. "We got record insolvencies in Australia and businesses are going to go bust."
• Jobs. Unemployment rising to around 5% to 6%.
• Rates. Another RBA hike in November, and a "stop start hiking cycle" that could run for years.
• Credit. Private credit could deepen the downturn through a negative feedback loop as lenders pull back.

He also thinks some commercial property values may need to fall more than 20%, sees house prices down 13% nationally, and prefers cash and liquid, floating-rate assets to anything illiquid.

The data check

Some of this is already in the numbers. Unemployment rose to 4.7% in September, with 39,000 fewer people employed. The cash rate is 4.60% after four hikes this year, and the board meets again on 3 November. After the jobs data, markets put the odds of a hike that day at about 16%.

On failures, ASIC counted 14,152 companies entering insolvency for the first time in 2025–26. That is slightly fewer than the 14,722 of the year before, but still above the long-term average. Construction led with 3,472, then accommodation and food services with 2,078.

On credit, the regulator is already leaning in. In August ASIC chair Sarah Court called recent problems "the first significant cracks" in private credit. In September a commissioner told the sector to "prepare for enforcement action". Merricks, Longreach Credit, Centuria Bass, MA Financial and North Haven have all limited redemptions.

The tax clock

The May Budget gave founders a second deadline. From 1 July 2027, individuals and trusts lose the 50% CGT discount. In its place: cost base indexation for inflation, plus a 30% minimum tax on real gains. Assets held across the date get split treatment, with gains up to 1 July 2027 keeping the discount and gains after it moving to the new rules. The four small business CGT concessions survive. From 1 July 2028, discretionary trusts also face a 30% minimum tax on their income.

Joye would go the other way. He has proposed a CGT exemption of up to about $50 million per person for owners and employees who hold shares in Australian businesses.

Why the two clocks collide

A recession and a tax deadline pull in opposite directions. The tax change rewards selling before July 2027. A downturn punishes selling into weaker earnings and thinner debt markets. And for owners who hold through, the value at 1 July 2027 can set how much of the gain keeps the old discount, so a lower valuation on that date moves more of the gain into the new regime. Taxpayers can choose a valuation or an ATO apportionment formula. In a downturn, that choice deserves real modelling.

The mid-market read

1. Fund the deal before you need it. Many mid-market buyouts now lean on private credit. If lenders tighten, leverage falls, and so do the prices buyers can pay. Refinance early and know your covenants.
2. Price the trough, not the peak. Buyers will underwrite recession earnings. Have a downturn case and a quality-of-earnings view ready before they build theirs.
3. Get advice on the date, not just the deal. If 1 July 2027 falls in your window, model a sale before it, a sale after it and the valuation choice, alongside the small business concessions and any trust restructure.

Joye's own preference, cash and liquidity, is a buyer's edge in a downturn. The founders with the most options will be the ones who don't have to sell.

What to watch

• September quarter CPI on Wednesday 28 October.
• The RBA decision and new forecasts on Tuesday 3 November.
• ASIC's private credit update, due later this year.

General information only, not financial product or tax advice. Forecasts are Chris Joye's, as reported. Budget measures are as announced in May 2026 and subject to legislation.