"We welcome the constructive approach to trust taxation issues flagged by NSW Treasurer Daniel Mookhey, and urge the other states to work cooperatively to resolve a complex federalism problem," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"As part of the Federal Government's proposed changes to the taxation of discretionary trusts, up to half a million businesses may need to restructure or make elections to their trust ownership arrangements. This may trigger state-level transfer duties, financially penalising businesses which comply with the intent of Commonwealth tax reforms.
"In August, we wrote to all state treasurers requesting they work with the Federal Government to find a solution to this problem. We welcome the NSW Treasurer heeding this call and seeking a solution which will not leave the 123,000 trust-organised businesses in the state worse off. We encourage other state governments to follow this path.
"We also commend the Treasurer's assurances that NSW is not seeking a windfall gain from changes resulting from federal tax reforms. At a time when businesses around Australia are facing mounting tax burdens, this approach takes seriously the need to support businesses doing the right thing.
"On behalf of the hundreds of thousands of Australian businesses potentially impacted by this change driven by the federal budget, we urge other state treasurers to give assurances they will not make an unseemly and damaging grab for cash.
"While there are detailed legal complexities to be worked through, this demonstrates a commitment to constructive federalism which should be adopted across a wide range of policy reform areas," Mr Willox said.
