Senate inquiry must put the trust tax modelling on the table

Family Business Association

Family Business Association has welcomed the Senate inquiry into the government's minimum tax on discretionary trusts and called on the Senate Economics Legislation Committee to publish the economic modelling and regulatory impact, and consult the families of all sizes that the tax will hit.

The Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the companion rates bill were referred to the committee on 15 October. Submissions close on 29 October, and hearings are scheduled for 5 and 6 November.

Family Business Association Chief Executive Officer Catherine Sayer said the inquiry would test the proposed new system in public for the first time.

"Since May we have asked the government to show us the modelling. 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. 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 per cent is a floor, not a rate. 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 1 July 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."

Family Business Association will lodge its submission by 29 October and will seek to appear before the committee.

Family Business Association is the peak body for family businesses in Australia. Around 70 per cent of Australian businesses are family businesses and they employ around half the workforce.

Catherine Sayer, Chief Executive Officer, Family Business Association, [email protected]

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