Former Prime Minister Paul Keating has thrown his weight behind Labor's capital gains tax overhaul, arguing changes are "so marginal that no entrepreneurial initiative is likely to be thwarted" despite fierce opposition from investors and conservative media—an intervention that captures Australia's tax debate in microcosm.When Keating speaks on economic reform, people listen. Even if they don't like what they hear.In an exclusive interview with The Guardian, the architect of Australia's 1980s economic reforms told the Anthony Albanese government to show spine and resist pressure to water down capital gains tax changes announced in the budget.The reforms would close longstanding tax advantages for property investors and other asset holders—modest changes by historical standards, but portrayed as radical by opponents."The changes to tax rates are so marginal that no entrepreneurial initiative is likely to be thwarted," Keating said. He dismissed claims that the reforms would damage investment and innovation as "the usual alarmist nonsense from people who don't want to pay their fair share."The capital gains tax overhaul is the real fight in Labor's budget. While the NDIS cuts affecting 241,000 disabled Australians got buried in budget documents, CGT changes dominated headlines for days.Conservative media has painted the reforms as an attack on investors, with the Australian Financial Review and business lobbies warning of economic damage. Labor has already faced pressure from within to carve out exemptions.Keating's message: hold the line."Any exemptions would hurt the economy," he told The Guardian, warning that special carve-outs create distortions and undermine the integrity of the tax system. He should know—his own reforms in the 1980s faced similar opposition before transforming Australia's economy.The problem for Labor is political, not economic. Capital gains tax affects people with assets—the same people who donate to political parties, own media companies, and fund lobbying campaigns. Disability cuts affect people with limited political power.So Labor faces ferocious pressure on CGT while the NDIS cuts slide through with minimal resistance. It's a textbook case of whose interests matter in Australian politics.Keating, ever the political brawler, is telling Labor to ignore the noise and govern for the long term. "This is about fairness and about making the tax system work properly," he said. "If Labor won't do it, who will?"Good question. If a Labor government backed by Paul Keating can't implement modest tax reforms on investment income, what's the point?Mate, this is Australia's tax debate in a nutshell: modest changes portrayed as radical, fierce opposition from those who benefit from the status quo, and a former PM telling his successors to show spine.