Labor's Family Business Tax

Labor would impose a minimum tax rate of 30% on small family businesses structured through discretionary trusts. This is the same rate imposed on large multinational companies.

This would hit:

  • 300,000 small businesses with a turnover under $10 million.
  • Small businesses who use trusts for asset protection or estate planning.
  • Small businesses who use trusts to manage cash flow where incomes fluctuate (for example, a tourism business).

Small businesses would be hit by other Labor taxes, including:

FACTS
Labor's Family Business Tax
  • 300,000 small businesses hit
  • $27 billion in higher taxes
  • No longer taxed at marginal rates
  • Same tax rate as big business

Bill Shorten as Assistant Treasurer said:

We see trusts as a legitimate feature of how Australians conduct their financial affairs."

(Speech to Taxation Institute of Australia, 4/3/2011)

"The Gillard Government is not looking at taxing trusts as companies... Trusts are an important and growing part of Australia's economy."

(Press Release, 21/11/2011)

"The vast majority of family trusts are operated by tradies, farmers, shopkeepers, professionals and retirees... This is clearly just a case of the Labor Party going after hardworking small business owners because they are a 'soft target.' - Council of Small Business Organisations Australia, 31/7/2017