Treasurer Jim Chalmers insists there is no tension with Prime Minister Anthony Albanese after they unveiled carve-outs from sweeping tax changes for small businesses and start-ups.

Labor's initial proposal included removing the existing 50 per cent capital gains tax (CGT) discount and replacing it with inflation indexation of the cost base, as well as a minimum 30 per cent tax.

However, following widespread backlash, Albanese announced exemptions on Thursday, including a new tax concession for innovative start-ups.

Another measure will see more small businesses qualify for CGT concessions.

Previously, only businesses with a turnover under $2million could access the existing 50 per cent active asset CGT concession. But the threshold was lifted to $10million.

During an interview on Nine's Today program, host Karl Stefanovic questioned Chalmers about the decision to 'back down' on the CGT policy, saying there had been no consultation on the reforms.

'The public is still wildly angry about not getting consulted about this and the fact it wasn't taken to the last election,' Stefanovic said on Friday.

'You sprang it on them, you tried to get it through quickly and now you're backing down on some of those areas… do you get the feeling that the PM is off you?'

But Chalmers said there had been and would continue to be consultations on the changes to CGT, while denying any rift with Albanese.

'I'm very grateful to the PM,' the treasurer said.

'We know when you take on economic reform in this country, especially tax reform, that can be politically difficult.

'But what we have chosen to do together is take the more difficult path to get this right, the hard road of reform, rather than the path of least political resistance and we have worked very closely together to land these details and get it through parliament.'

Stefanovic suggested that the U-turn was 'a bit amateur hour'.

'The policy is a howler, you just didn't see the wild backlash coming, and that's why you've changed it,' he said.

But Chalmers said changes were to be expected and defended his decision.

'It's not unusual when a government is embarking on a significant tax reform for there to be a period of consultation to nail down the implementation details and that's what we are seeing here,' he said.

'There are people who would prefer we left it exactly as it is. But the status quo right now in the housing market and the tax system is locking too many people, particularly too many young people, out of housing.

'And that's why we are taking difficult decisions politically, but the right decisions to address that problem that's been in our economy and in our society for too long.'

Start-ups are set to benefit from the new tax concession, announced by Albanese on Thursday after concerns were raised by tech leaders, including Atlassian co-founder Scott Farquhar.

'We're also proposing to introduce a new innovative business tax concession for start-ups, and we'll release the consultation paper on the startup sector later this morning,' the prime minister said.

He brushed aside claims the CGT reversal was driven by pressure from young business owners. 

'Young Australians who've been able to get into their first home, and their parents and their grandparents, are saying that for the first time... that they're finally getting a fair go,' Albanese said.

In the announcement, the government has also scrapped plans to apply its 30 per cent minimum tax to testamentary discretionary trusts.

The trusts are created through a person's will and allow assets and income to be distributed after death, a measure critics had dubbed a 'death tax'.

About 10,500 testamentary trusts are active across Australia.

The Tech Council, which represents Australia's technology industry including many start-ups, said the carve-outs were a 'constructive response' to concerns. 

But one founder, who asked not to be named to speak freely, said startups in Australia were already playing on 'hard mode'.

The flow of young talent in their 20s or 30s moving to the US would only accelerate, while the UK and New Zealand were becoming more attractive, he told AAP.

'Every frontier lab is now chock-full of Australians working in the US,' he said.

'You get paid way more, you get taxed less. You get a bit of an adventure.'

Consultation on how the carve-out will operate is ongoing.

A snap two-day parliamentary inquiry into the tax changes is due to hand down its final report on Friday.

Opposition Leader Angus Taylor said the tax tweaks were 'too little too late' and repeated his criticism of the reforms as an attack on aspiration.

'We'll keep fighting them every inch of the way,' he told Nine's Today program.