CONSTITUENCY STATEMENTS

Mr HAWKE (Mitchell) (16:43): The Australian public are now aware that they are being fleeced by their government to the tune of $77 billion in new taxes. But the moral case that the government has been making is that this is somehow 'pro-aspiration' or that the taxes are for the benefit of ordinary people. Nothing could be further from the truth when we look at the example of testamentary trusts and the actions of the government in imposing a 30 per cent tax of testamentary trusts.

Sometimes people confuse these trusts with other forms of trusts, but a testamentary trust is obviously something that lays dormant until a person dies and the executor sets up the trust after the person's death. They are primarily used by and advantage low-income people, and the changes that the government is proposing to tax these trusts threaten vulnerable people, children, people with disability, women and haven't taken into account the issues.

You get some odd looks and some faces from people over there, but let me tell you a little about testamentary trusts and some of the problems that the government is creating here. They are not exclusive vehicles. You cannot introduce new assets into these trusts; they are very different from family trusts.

The government was saying that discretionary trusts are no longer available and that they have to be fixed, and that isn't taking into account the law that fixed trusts, under the tax commissioner's rulings, will be in family law proceedings. So if a man dies and their female spouse inherits all of them under a testamentary trust, under the government's changes a fixed trust would be included in new divorce and family law proceedings, whereas a discretionary trust cannot be.

This is critically misunderstood by this government, and we have a lot of female members from the other side here. They should be paying attention to this. The beneficiaries of testamentary trust in Australia to people earning less than $45,000 from other sources—these people stand to lose access to the tax free threshold and the lower marginal rates that you get from the current arrangements.

This means groups like—let's go through this again—widows, who will be primarily women because women live longer than men; orphans, both single and double orphans; minors raised by grandparents; retirees; and a lot of disabled people who now being looked after by testamentary trusts because, as we know, the NDIS cuts out. The government has no plans to include older people or older people with disability into these NDIS arrangements.

I think the government needs to look at this. When they say rich people are going to suffer and ordinary people are going to benefit, nothing could be further from the truth when you look at testamentary trusts. In fact, the changes that the government is making across the board are blanket, typical socialist policy. 'We're just going to give everybody more tax.

We don't care about the diversity of actual economic life.' Testamentary trusts are a prime example of the vulnerable using financial mechanisms available in incentives to make sure they look after vulnerable people. I welcome the fact that the Prime Minister said—newsflash for the members opposite—he's going to exclude vulnerable people. Vulnerable people need to be excluded, and testamentary trusts need to be excluded from this budget.