Labor's trust tax proposal faces backlash from small businesses and new Greens leader

In the May budget, Treasurer Jim Chalmers introduced a minimum 30% tax on discretionary trusts, a move that will impact roughly 240,000 small enterprises that rely on trusts for tax planning and asset protection. The Australian Chamber of Commerce and Industry, led by CEO Andrew McKellar, warned that many firms may have to convert to companies, incurring significant legal and advisory costs. Labor's proposed workaround—allowing fixed distributions to pre-selected beneficiaries—has been criticised as overly rigid and costly by business leaders.

Greens senator David Shoebridge, now the party's leader, contends the exemptions water down the legislation and is prepared to fight the bill in parliament. Assistant Treasurer Daniel Mulino rejected claims that the exemptions weaken the reforms, urging all parties to negotiate in good faith. Opposition leader Angus Taylor called for a cross-party effort to block the legislation, labeling it harmful to small businesses.