Both figures are on the table this week as the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 enters Parliament, and neither side has produced a number in between. Treasurer Jim Chalmers introduced the bill on Wednesday, calling it “the most ambitious tax reform package in a generation.” Underneath that framing sits a specific, checkable set of numbers, and this week two very different ones arrived on the same table. The government’s figure is $4.5 billion: what Treasury expects the measure to raise in its first year. Industry’s figure, reported this week via Wilson Asset Management and CPA Australia, is $8 billion to $13.3 billion — what the roughly 210,000 trusts expected to be affected could spend on advice and restructuring to comply. That second figure comes from firms whose business is trust and SMSF advice, so it’s their estimate, not one that has been independently modelled. It is, however, the only cost figure anyone has put forward, and nobody in government has offered a competing number to weigh against it. What the bill actually does From 1 July 2028, discretionary trusts pay a 30 per cent minimum tax on their taxable income. Chalmers says that aligns the rate with what a worker earning $45,000 to $135,000 already pays. The government estimates about 350,000 active small businesses used a discretionary trust in 2022-23, roughly one in six, and that Treasury expects around 140,000 of those won’t pay a cent more under the change, leaving roughly 210,000 that will. Exemptions cover family farms, registered charities, deceased estates, special disability trusts and super funds; none of that is contested. The dispute is over a narrower carve-out: distributions to other tax-exempt entities, including sporting clubs and schools, are exempt up to a cap the government describes as “reasonable.” That cap has not been set. A draft circulated last month flagged that one would apply; as of this week, it still hasn’t. The bill also isn’t travelling alone. The same legislation carries separate changes to negative gearing and the capital gains tax discount for new housing, which Chalmers says target distortions that have “locked too many young Australians out of housing for too long.” If the trust provisions sink the bill in the Senate, the housing measures go down with them. Appreciate the newsletter but aren’t ready to pay for a subscription? Grab us a beer or snag the exclusive ad spot at the top of next week's newsletter. Two Greens, two different complaints Greens economics spokesman Nick McKim wants the charity and school exemption removed outright. “The treasurer needs to knock this out of the legislation,” he said, adding “there is far too much leniency.” His specific concern: a family could keep paying private school fees out of a trust and still qualify for the concession, even though the bill leaves schools’ own tax treatment untouched. Chalmers’ response treats the exemption as minor. “There are good reasons” for it, he says, calling it “a very specific sliver of what’s being proposed here,” and separately estimating fewer than 10 per cent of small businesses will be touched by the measure overall. Neither side disputes what the bill says; they disagree about whether the carve-out is a loophole or a reasonable line. A second Greens senator, David Shoebridge, took a different line earlier in the week, arguing the government had already “managed to water down its own position” and warning that what he called Labor’s “political cowardice” risked making the reform “yet another missed opportunity.” It’s a broader complaint than McKim’s, less about this specific carve-out and more about whether the government has the appetite for the fight at all. As of this week, the Greens have said they will move for a Senate inquiry into the carve-outs. No inquiry had been established as this issue went to draft, only sought. The other side of the fight The Coalition opposes the bill outright and won’t be won over by amendments, so the government needs the Greens’ votes regardless of how that inquiry question lands. Liberal Senator Michaelia Cash told Seven’s Sunrise the changes would “tax small businesses twice,” describing them as “slugging the backbone of the Australian community, our small and family businesses, with yet another tax.” Shadow Treasurer Tim Wilson sought to refer the bill to the Senate economics committee; the request was rejected. Wilson separately disputes Chalmers’ claim that trusts restructuring to avoid the tax won’t trigger state stamp duty, saying businesses doing so will still face it — a direct factual disagreement neither side has resolved on the public record. Shadow Assistant Treasurer Kevin Hogan’s assessment was blunter still: he said tax accountants would be the “great winner” of the reform. Enforcement is the quieter half of the story. UNSW tax academic Dale Boccabella points out that a rule is only as good as the agency checking who qualifies for it: “It’s great having a rule, but you’ve got to enforce it on a case-by-case basis.” The ATO’s record on trust compliance gives no particular confidence that it will. Also this week Health department documents released under freedom of information project that 78,000 Australians aged 65 and over will have dropped private health cover by 2029-30 under the government’s rebate cut — against the 44,000 figure the government has used publicly and repeatedly. The department’s position is that 44,000 was only the “initial effect,” which is a different claim from the number being wrong. Opposition health spokeswoman Anne Ruston says Health Minister Mark Butler either didn’t read his own briefs or was misleading Parliament; that’s her characterisation, not an established fact. But it’s not in dispute that the government’s own department had the larger figure before the government kept citing the smaller one. Separately, Prime Minister Anthony Albanese confirmed this week that he personally intervened a day before Chalmers announced the ATO’s delay to its credit-card surcharge ban; Chalmers denies he was “rolled.” The full sequence of who decided what, and when, hasn’t been reported in detail; what’s public so far is headline-level only. But the shape of it is a treasurer’s call on a tax office decision being overridden from the Prime Minister’s office. What to watch Whether the Greens’ push for a Senate inquiry into the trust bill’s carve-outs is actually referred, which will be the first sign of whether this bill passes in 2026 or slides into next year. The RBA’s next rate decision, due 3 November, which will shape how a tax that costs more to comply with than it raises lands against households already managing rate pressure. And the government’s separate gas reservation bill, introduced the same week, which is drawing its own loophole dispute. It’s a different policy, but the same pattern: an announcement, an industry pushback on the real-world cost, and a Senate that isn’t guaranteed to agree with either side. Follow us on all major podcasting platforms and social media channels for important updates. Your support keeps independent journalism alive! For more in-depth coverage on these stories and other news affecting Australia and the world, subscribe to readmencari.com. Support our independent journalism by listening to our podcasts on all major platforms and considering a subscription to help us continue delivering fearless reporting free from financial and political influence. As well as knowing you’re keeping MENCARI alive, you’ll also get: * Get breaking news AS IT HAPPENS – Gain instant access to our real-time coverage and analysis when major stories break, keeping you ahead of the curve * Unlock our COMPLETE content library – Enjoy unlimited access to every newsletter, podcast episode, and exclusive archive—all seamlessly available in your favourite podcast apps. * Join the conversation that matters – Be part of our vibrant community with full commenting privileges on all content, directly supporting Mencar… This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit theregisterau.substack.com/subscribe
