# Proposed Trust Tax Changes Spark Small Business Backlash Industry leaders warn new tax measures threaten the financial viability of family-operated businesses. - **Source:** [PerthNow](https://www.perthnow.com.au) - **Published:** 2026-11-04 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/d29dcbc7-72be-46bf-a2a4-484d86cc27dd ## Proposed Tax Reform Inquiry The Australian federal government is initiating a two-day inquiry this Thursday regarding a proposed 30 per cent minimum tax on discretionary trusts. Originally flagged in the May budget, the policy aims to address concerns that trusts are being utilized to subvert the tax system, thereby placing an unfair burden on individual workers. ## Small Business Exemption Request The Council of Small Business Organisations Australia is formally requesting that businesses with an annual turnover below $10 million be grandfathered from these changes. CEO Skye Cappuccio argues that the current proposal unfairly punishes family-operated entities that utilize legal trust structures primarily for asset protection rather than for tax avoidance purposes. ## Financial Impact on Owners Industry representatives warn that the proposed legislation could force business owners to pay thousands of dollars in restructuring costs. Owners currently face a difficult choice between accepting significantly higher tax bills, undergoing expensive corporate restructuring, or electing a fixed-distribution regime that may prove too rigid for their specific operational needs. ## Criticism of Legislative Approach Critics argue the government is targeting a legal business structure rather than addressing specific instances of misconduct. By failing to distinguish between genuine small businesses and those abusing the system, the policy risks penalizing hundreds of thousands of owners who rely on these structures for legitimate long-term financial and asset security. ## Proposed Mitigation Measures Beyond the request for grandfathering, the Council of Small Business Organisations Australia has recommended that any necessary restructuring costs incurred by businesses should be made tax deductible. This proposal aims to alleviate the immediate financial strain placed on family-operated firms forced to adapt their legal frameworks to comply with new regulations. ## Broad Industry Opposition The upcoming inquiry will feature testimony from a diverse coalition of industry peak bodies. Representatives from the National Farmers Federation, Housing Industry Australia, and Master Builders Australia are scheduled to appear alongside accounting experts to voice collective concerns regarding the potential economic impact of these tax changes on their respective sectors. ## Legislative Timeline and Process The Labor-led committee overseeing the inquiry is tasked with evaluating the submissions and testimonies provided by various industry stakeholders. Following the conclusion of the two-day hearing, the committee is expected to finalize and hand down its formal recommendations regarding the proposed trust tax changes on November 13, 2026. ## Broader Economic Implications The outcome of this inquiry will determine whether the government proceeds with the 30 per cent tax threshold or introduces concessions for smaller entities. If implemented without modifications, the policy could fundamentally alter how family businesses manage assets, potentially leading to widespread shifts in corporate structures across the Australian small business landscape. ## Sources covering this story - https://www.perthnow.com.au/news/politics/fears-new-trust-tax-changes-will-smash-small-businesses-c-23117753 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._