MATTERS OF PUBLIC IMPORTANCE
Senator WHITTEN (Western Australia) (17:34): The tax changes in the 2026-27 budget are truly horrendous. It's hard to imagine less popular, less effective reform if you tried. Labor said their CGT changes wouldn't result in property prices falling.
It's been proven false. They said that rents wouldn't rise. That was false.
They claimed they were trying to help out first home buyers, but the data is showing a slowdown in those numbers, too. Labor simply has no idea. As Senator Smith points out in this matter of public importance, more than anything else, the Labor government has introduced uncertainty to the tax system—a system that is already overly complex and in desperate need of reform to make life easier.
Instead, here we are, waiting for this clueless government to give us details on how they will dismantle trusts. Charities, not-for-profits and sporting communities have all been caught up. But there's another community that's going to suffer, and that is the 350,000 small businesses that operate through a discretionary trust in Australia.
They have set up their business in a perfectly legitimate structure that provided asset protection, succession planning and flexibility around their tax arrangements. Small businesses are the backbone of Australia's economy, employing 5.16 million workers. Labor has come through to smash them by moving the tax goalposts.
The 30 per cent tax is the equivalent tax rate of earning $200,000 at marginal tax rates. Many of these small businesses are mum-and-dad operations, where one partner might be looking after the children full time, allowing the other to run a small business. In these cases, of which there are thousands, that small business would not be viable without a stay-at-home parent.
In these cases, is it not fair for that parent who took on the huge responsibility of looking after children and raising our next generation to receive some of that small-business income? Are they not contributing to the economy? One Nation recognises the vital importance of the family unit.
We know that raising the next generation is serious business, which is why we would allow families with children to split their income. We know working families need a leg up. But here, we see Labor stripping families with small businesses of their ability to split income and recognise the economic input of their spouse.
Labor's tax grab has struck at the heart of the small-business dream in Australia. It doesn't end there, either. Anyone who's owned a business and had to deal with restructuring knows that it is an incredibly tricky business.
Labor is providing rollover relief only for the direct income tax consequences for the hundreds of thousands of businesses that will need to restructure out of trusts. But these are just the tip of the iceberg in a costly restructuring process. Given the state of the Australian tax code, this is not something that can be done without substantial advice from a tax professional, and this is not cheap.
It runs into the tens of thousands of dollars. This is time, paperwork and effort to understand new tax structures rather than spending that time and effort reinvesting in their businesses. What if the taxes are state taxes?
What about stamp duty? What about land taxes? There have been no promises of relief for small businesses for these costs.
These are businesses that are heading to the wall in record numbers, and, for many, these additional costs are going to be the final straw that pushes them over the edge, and for what? What was the urgency behind pushing these trust reforms through? It's the same reason Labor always pushes new taxes: they can't control their spending, they can't balance their budgets, and they can't manage taxpayers' money, so they're coming for more.
This government has shown time and again that it does not understand how real businesses operate. It does not understand the daily pressures faced by owners who already work long hours, carry personal risk and employ their neighbours. Instead of simplifying the system or providing genuine support, Labor has chosen to punish the very structures that have allowed so many Australians to build something of their own.
The uncertainty alone is enough to freeze investment and delay hiring. When you add the forced restructuring costs, the loss of flexibility and the higher effective tax rates, the damage compounds quickly. I urge the Labor Party to reconsider these changes.
We know that a draft of new measures are on the way to fix the other disasters that have come out of the budget. You have time to reverse course on these trust changes. Stop trying to balance your budgets through higher taxes and instead cut your wasteful spending.