How to resolve AdBlock issue? Senate inquiry must put the trust tax modelling on the table says Family Business Association
THE Family Business Association (FBA) has welcomed the Senate inquiry into the proposed minimum tax on discretionary trusts and is calling on the Senate Economics Legislation Committee to publish the economic modelling and regulatory impact statement, and to consult family businesses of all sizes.
The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and its companion rates bill were referred to the committee on October 15. Submissions close on October 29 with hearings on November 5 and 6.
FBA CEO Catherine Sayer said the inquiry will be the first public test of the proposed system. FBA has sought the modelling since May, but two rounds of Treasury consultation have passed without it and the Senate is now being asked to vote on a $4.5 billion tax on figures nobody outside Treasury has seen. Ms Sayer said.
The FBA’s position is that two weeks is too short to examine a measure of this size, given its long-term effects on the economy and community.
The FBA's position is that the Senate Economics Legislation Committee must publish the economic modelling and regulatory impact, and consult the families of all sizes that the tax will hit.
"Since May we have asked the government to show us the modelling," Ms Sayer said. "Two rounds of Treasury consultation have come and gone without it, and the Senate is now being asked to vote on a $4.5 billion tax on figures nobody outside Treasury has seen," Ms Sayer said.
"Two weeks is a short time to examine a measure of this size. It is a critically important issue that should not be rushed. It is going to have long-term impacts on the economy and community and needs to be carefully considered "
Ms Sayer said the committee's first question was what the sector looks like once the current generation of owners has handed over.
"This is not a tax on this year's profit," she said. "It decides whether the next generation takes the business on or sells it. That question has not been asked, let alone modelled. We do not want to look back in 10 years’ time and wonder what has happened to all the family businesses in Australia."
Ms Sayer said the bill also did not work for a family that runs a business through a trust today.
"The 30% is a floor, not a rate," she said. "The election locks a family's distribution split for life and cannot be used to keep profit in the business for a new truck or a new press brake. No trust formed after July 1, 2028, can elect at all. And the restructure path relies on stamp duty relief that is still unclear that the states will give.
"Stacked on the increasing cost of doing business, productivity challenges, increasing compliance costs, the recent card surcharge ban and the stamp duty question along with the enormous cost to restructure, small and family businesses face death by a thousand cuts. These businesses employ half the Australian workforce."
FBA will lodge its submission by October 29 and will seek to appear before the committee.
Family Business Association is the peak body for family businesses in Australia. Around 70% of Australian businesses are family businesses and they employ around half the workforce.
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