Treasury Laws Amendment (Tax Reform No. 3) Bill 2026

Milton Dick

The question now is the amendments circulated by the honourable member for Curtin be agreed to.

Member for Curtin's circulated amendments—

That all words after "notes that" be omitted with a view to substituting the following words:

(b) the bill applies a beneficiary test to testamentary trusts 'established' on or after 1 July 2028, but does not say whether a testamentary trust is established when the will is made, when the will-maker dies, or when estate assets pass to the trustee;

(c) as a result, Australians making or reviewing a will cannot know whether the trust it creates will be covered by the new rules; and

(2) calls on the Government to amend the bill so that:

(a) the beneficiary test applies only where a testamentary trust is established under will or codicil provisions made or varied on or after 1 July 2028, under a court order made on or after that date, or on an intestacy where the deceased died on or after that date; and

(b) the exclusion applies to income derived for the benefit of an individual, an exempt entity or the trustee of a special disability trust, so that naming an ineligible beneficiary in a will does not affect the treatment of the trust's other income".

Kate Chaney

I support the intent of this bill, which is to tax income in a broadly similar way whether it comes from work or from wealth, and I welcome the changes the government has made following consultation, including the electable regime and rollover relief. But we're asking family businesses to make significant decisions quickly without knowing what those decisions will cost—Treasury puts the average cost of restructuring at around $11,000; COSBOA puts it at $15,000 to $50,000 before stamp duty—and the window for making a decision closes early, with rollover relief ending on 30 June 2030.

My amendments would make sure we find out how this reform is affecting small business while there's still time to fix any problems. These amendments insert a new schedule, 3A, which sets up two reviews. The first is an early inquiry by the Small Business and Family Enterprise Ombudsman. The minister would ask the ombudsman by 1 July 2029 to inquire into how the trust changes are affecting small business, using the ombudsman's existing inquiry powers. The ombudsman would report by 31 March 2030, three months before rollover relief closes, and the report would be tabled in parliament. The ombudsman would look at how small businesses are using rollover relief and the option to fix beneficiaries and stay outside the minimum tax and whether those settings, including the June 2030 end date, should change. It would look at what businesses are really paying to adjust, including professional fees and state stamp duty, it would look at whether ATO guidance and support are adequate, and it would look for any unintended consequences. The amendment also lets the ombudsman request aggregate data from the Commissioner of Taxation on rollovers and elections. No individual or business would be identified, but it would give the ombudsman hard data to consider alongside what small businesses are saying. The timing of this review is important. If costs turn out much higher than expected or ATO guidance arrives late, we need to know before the deadline for rollover relief passes, not after businesses have made decisions that they can't undo. A report in March 2030 gives the parliament time to extend the deadline if it needs to do so.

The second review is a full, independent review of the trust amendments. At the moment, the bill requires no review at all, which is a significant gap for a reform that impacts 840,000 discretionary trusts. This amendment would require an independent review to begin between July 2030 and January 2031, once there's tax data to show how the new rules are working in practice. It must be conducted by people who are not officials of Treasury or the ATO, completed within nine months and tabled within 15 sitting days. The review would go back to the purpose of the bill and ask: has it brought the taxation of trust income closer to the taxation of income from work? It would compare actual revenue and compliance costs with the published estimates and identify which income and wealth groups have ended up paying more. On small business, it would look at how much additional tax has been paid, what restructuring really costs and the effect on investment and succession planning. It would examine how people have changed their structures, including any shift towards companies, and it would examine how the commissioner and the minister have used their discretionary powers under the rollover and election regimes—because powers of this kind should be open to scrutiny.

These amendments don't change the tax, and they don't cost the budget. They simply make sure parliament sees the real-world impact of this reform, not just the modelling, and has the chance to respond. Getting the detail right is how this reform can keep the community's support. I call on the government to support these amendments and commit to these reviews. I commend the amendments to the House.

Tim Wilson

Once again, we have a problem where we have—I don't know what we call them these days, community Australia, strong community Australia, I think, or teal Independent MPs. Whatever they're called, once again they're betraying their small-business constituencies. We saw, in the last vote, the member for Curtin, the member for Wentworth, the member for Warringah and the member for Kooyong all betray their small business constituencies and vote with the Labor Party to separate out components of the bills that would actually give more protection to small businesses. We saw that in the last vote on the substantive issue. We saw—

Carina Garland

Member for Goldstein, I remind you to keep your comments to the details of the amendment rather than general debate, please.

Tim Wilson

Thank you, Deputy Speaker Garland. Indeed, I am addressing the different components of the detailed amendments, because what we've seen is small business continually being portrayed as part of the substantive issue of this legislation. What we want is to see a pathway for this legislation to be defeated and, more importantly, for it to do as little harm as possible. Instead, what we've consistently seen from this government—

Carina Garland

Member for Goldstein, this isn't a policy debate. I would invite your comments on the detailed amendments, please.

Tim Wilson

I'm offering them, which is a part of how it adopts them and changes the legislation or fails to change the legislation. It's a critical—

Carina Garland

I'm listening very carefully.

Tim Wilson

We have a substantive piece of legislation—

Carina Garland

I understand. Thank you so much.

Tim Wilson

then we have an amendment to that substantive legislation. What I am saying is I would like to see a change to the legislation, so it becomes less damaging—

Carina Garland

We're asking you to comment on the member for Curtin's detailed amendments.

Tim Wilson

Exactly! We have consistently supported changes to the legislation to minimise the—

Carina Garland

To the review that the member for Curtin is discussing, not the policy at large.

Tim Wilson

Just to be clear, Deputy Speaker Garland, I'm allowed to make a contribution in this debate, and it's currently—

Carina Garland

To the detailed amendments.

Tim Wilson

It seems to me that the chair is reflecting on the substantial nature of debate. We have a piece of legislation. We have an amendment. I am talking about the amendment—

Carina Garland

It needs to be on the details.

Tim Wilson

And I'm talking specifically about the amendment, except for when I'm constantly interrupted—

Carina Garland

I call the minister. Please take your seat, Member for Goldstein.

Chris Bowen

It's a simple matter of respect for the chair, Deputy Speaker. It is not appropriate for the honourable member to assert that you're reflecting. In fact, it's a reflection on the chair.

Carina Garland

Thank you. Again, I invite the member for Goldstein to reflect on the detailed amendments as put forward by the member for Curtin.

Tim Wilson

Once again, Deputy Speaker Garland, I am reflecting on the amendment, which is around a review. We support the proposition of a review, like we have sought to try and contain the damage of this legislation. But the problem we consistently have had is not just that this legislation does enormous damage; it's, again, that we have had individual members who claim to want to do the same thing not achieving that purpose. As a consequence, this legislation continues to do damage and will target and hit the small businesses of Australia. Even if there is a review—of course we would like there to be one—small businesses of this country are going to be hit by a 30 per cent minimum tax, in part because of the decisions of this Labor government and, of course, the crossbench members of this parliament.

Carina Garland

Member for Goldstein, I really don't appreciate having to call you up so many times to remind you to listen to what I have to say and to listen to what the member for Curtin has to say. It's very disrespectful behaviour. Whether that will make a difference to your future conduct, I don't know. That's for you to decide. The question is that the amendments circulated by the member for Curtin be agreed to.