Trust tax changes 'shirtfront Australian businesses' – 'grave error to rush these flawed thought bubbles into law.'
With the Federal Government expected to introduce the first tranche of its discretionary trust tax reforms this week, the Property Council of Australia has reinforced its call for the proposed minimum 30 per cent tax to be abandoned.
Joint industry polling showed harm to small, mid-tier and family developers' new projects - with 60 per cent affected – and putting national housing targets in greater doubt. Property Council Chief Executive Mike Zorbas said the consultation process had exposed a policy being built backwards and dropped on a property industry struggling to get new projects started in a time of rising costs of capital, materials and labour.
"The Albanese Government announced the tax grab in the May Budget and only then asked Australian businesses how they actually operate.
"Businesses forced to jump from one structure to another face the blowtorch of tax bills, state stamp duty, financing reviews, insurance changes and major contractual disruption.
"These changes shirtfront family-owned and mid-tier businesses that have legitimately used trusts to manage risk and finance new project investment for decades.
"Parliament should not pass a tax regime the Government doesn't convincingly understand, especially when it risks thousands of new homes.
"It would be a grave error to rush these flawed thought bubbles into law."
Reports the Greens are demanding additional harmful changes are deeply concerning.
"Good policy shouldn't be held hostage to a one-eyed tax crusade against business."
If the Government fails to abandon the tax, outstanding issues include:
- negotiating with the States to secure exemptions from state-based stamp duty
- adopting a minimum tax structure that allows long-standing businesses to continue with existing projects, preserves tax losses, and have certainty of future operations
- establishing a workable boundary between fixed and discretionary trusts
- providing genuine restructuring relief that recognises the unintended consequences.
