Govt’s shoddy tax change drafting carries electoral risks
By Google News Category Tax ·
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The Federal Government is facing a tough task in navigating the passage of its tax changes through the Senate with key stakeholders making clear that Senators are being asked to pass legislation within which key rules remain undeveloped.
The major accounting groups as well as the Tax Institute have used appearances before the Senate Economics Legislation Committee to seek to slow down passage of the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 on the basis that many elements remain to be fully developed and opened to consultation.
A string of stakeholders, including the Financial Advice Association of Australia, have complained about the short consultation period allowed around the legislation, noting that the exposure draft was open for consultation for 12 business days. The Bill was introduced less than a month after that consultation closed, and submissions to the Senate Committee were due 10 business days after referral.
The Senate Committee is due to report to the Parliament this Friday, meaning that there was less than a month between the referral of the legislation and the reporting date.
The broad attitude of stakeholders was made clear by Chartered Accountants ANZ representative, Damian Ogden said taxpayers need greater certainty before the legislative reforms commence.
“These reforms have significant implications for taxpayers who use trusts for legitimate commercial purposes, particularly family businesses that operate through discretionary trust and corporate beneficiary structures,” he said.
“Without certainty on how the rules will operate in practice, some businesses may feel compelled to restructure long-standing arrangements to avoid double taxation outcomes.”
In similar fashion, the Tax Institute’s Head of Tax & Legal, Julie Abdalla said the measures represent some of the most significant changes to the Australian taxation system in decades, “yet Parliament is being asked to consider only part of the reforms while crucial rules are still to be developed”.
“Trustees are being asked to decide whether to restructure or elect into a new regime, often irreversibly, before they can consider the complete rules that will apply to them. The roll-over window opens on 1 July 2027, so these rules need to be settled well before then.”
Noting that the administration and collection rules for the minimum tax have been deferred to future legislation, Abdalla said, “Even a basic question, such as how the trustee’s minimum tax interacts with beneficiaries’ entitlements to trust income, is not considered in the Bill or the explanatory memorandum.”
“That goes to the heart of how the tax will operate,” she said.
The problem for the Government is that incomplete elements of the legislation and the current time-frames mean that it risks fall-out intruding into the run-up to the next Federal Election.
Originally published by Google News Category Tax
