Labor faces trust tax opposition from Greens and small business

Summarised from 2 outlets · Updated 12 Oct, 03:24 · Archive

Labor's plan to impose a minimum 30 per cent tax on discretionary trusts faces challenges from both the Greens and small businesses.

Labor faces a narrowing path to pass its plan to impose a minimum 30 per cent tax on discretionary trusts, with the bill due to be introduced this week. The government is caught between pressure from small business groups and a hardline new Greens leader taking opposite positions on the legislation.

Treasurer Jim Chalmers announced the changes to the taxation of discretionary trusts in the May budget. The Australian Chamber of Commerce and Industry warns the new tax will affect 240,000 small businesses, forcing many to restructure into companies and incur tens of thousands of dollars in legal fees, financial advice, stamp duties and other costs. Andrew McKellar, the chamber's chief executive, said on Monday: 'We can't have a situation where small business becomes the punching bag of government.' He described the proposed exemption as inflexible and unworkable, citing 'significant restrictions, obligations, complexities' and 'extremely onerous' penalties.

Labor has attempted to address business concerns by providing a workaround allowing fixed distributions to pre-nominated beneficiaries instead of restructuring discretionary trusts. However, Greens leader David Shoebridge opposes the exemptions, believing they water down the legislation and wants the workaround removed entirely. The timing is particularly difficult for Labor following a separate dispute with the business community over a ban on card surcharges.

How it is being reported

• Labor in trust tax fight with emboldened Greens leaderThe Greens and small businesses are mounting separate campaigns threatening to derail the government's plan to hike taxes on trusts.Perth Now · 12 Oct, 03:11
• Labor in trust tax fight with emboldened Greens leaderThe Greens and small businesses are mounting separate campaigns threatening to derail the government's plan to hike taxes on trusts.The West Australian · 12 Oct, 03:11

In this story: Jim Chalmers · Andrew McKellar · David Shoebridge · Australian Chamber of Commerce and Industry · Australian Labor Party · Australian Greens

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem