QUESTIONS WITHOUT NOTICE
Dr MULINO (Fraser—Assistant Treasurer and Minister for Financial Services) (14:45): Can I just say from the outset that these reforms to trusts are incredibly significant reforms. They are reforms that will make our system fairer, and they are long overdue. These reforms to trusts are about better aligning the tax treatment of income from assets with income from work and helping to fund tax cuts for workers.
Trusts allow some Australians to plan their tax affairs in ways that aren't available to most workers and families. It's important to put this in some context. There have been a number of major reviews of the tax system over the last 50 years, dating all the way back to the ASPI review.
The McMahon government commissioned that review, and it was handed to the Whitlam government. We then had the Henry review under the Howard government and the major review of business taxes under Abbott. All these reviews pointed to discretionary trust taxes as requiring attention and as requiring reform.
It's this government that has taken the hard decisions to take on that much needed reform. It's important to note that in the last 20 years the number of trusts has doubled, and a significant proportion of that growth has been in discretionary trusts. The majority of trust income flows to the top-earning 10 per cent of families, and about 90 per cent of total private trust wealth is held by the wealthiest 10 per cent of households.
The vast majority of Australians and the vast majority of small businesses do not operate through a trust. When it comes to compliance costs, it is important to note that the compliance costs of our reforms are set out in the documents, and they'll be a fraction of some of the figures that are in the public realm. The difference between the estimates in the bill and those being reported by some is that the estimates in the bill have been prepared carefully and rigorously by Treasury—whereas the estimates that are noted by some opposite were prepared by the shadow Treasurer's cousin!
Treasury estimates are based on established methodologies for compliance costs. They've been informed by stakeholder input. And they reflect that trusts will have different advice needs depending on their circumstances.
Around half of trusts won't be affected in any given year, with low advice needs and no need to restructure. Could I also say, in relation to small business, that it's very important to note that in the bill that was introduced by the Treasurer earlier this week there are two different methods for restructuring, and that was informed by stakeholder feedback. This is a very important measure.
This will make our tax system fairer. Those opposites seem to be the only ones who think our tax system is all operating fine. We don't.
We're going to reform it.