Treasurer Jim Chalmers on Wednesday introduced into parliament a minimum 30% tax on the net income made from discretionary trusts, which is expected to raise more than $40bn over the next decade.
What we know:
- Chalmers described the trust tax as an important step in making the tax system fairer. “If we leave this issue for another day and another government, the risks to the integrity and the sustainability of the tax system will only grow,” he said (SMH).
- But the treasurer is facing push back from the Coalition and the business sector, with shadow treasurer Tim Wilson claiming Labor did not “understand the scale of the train wreck” that would evolve over coming months (SMH).
- “Small business is on the brink,” said Australian Chamber of Commerce and Industry chief executive Andrew McKellar. “Four interest rate hikes, high inflation, flat growth, and high fuel and electricity prices have hit them hard and now they face higher taxes too,” he said (SMH).
- Labor would need support from The Greens to pass the legislation, however the party is concerned that the bill has a “loophole” allowing parents to pay private school fees from their trust funds without it being taxed (ABC).
- If Labor is able to pass the tax on discretionary trust income, it is projected to raise an estimated $4.5bn in 2029-30, its first year of operation (The Guardian).
Read more: Labor takes on ‘political risks’ with reforming budget (The Saturday Paper)