What we are dealing with is this federal Labor government's proposed trust tax reform, and it represents another major burden on Australia's small-business community. Don't take my word for it. Don't take the coalition's word for it. Let me give you, in a set out, methodical manner, a range of examples from businesses in my electorate of Monash, because, across the board right now, small businesses are struggling to keep their head above water. They are running on financial and emotional reserves. They have had an increase in input costs right across the board, from fuel to insurance to the complexity of employment laws and regulations, and they are really struggling right now.

One example is Abe from a local agrispecialist accounting firm that has over 500 regional agriclients. Abe says:

This legislation has Australia moving from a flexible tax system to a rigid tax system

Abe says:

Minimum 30% tax in trusts is higher than the 25% company tax rate

And Abe feels that many small businesses will be forced to close their door due to these changes. Abe's small business example is the following: a family trust that splits income. Family adults pay more far more tax under this proposal. There's an example that's set out of $150,000 of trust income split equally between a husband and wife in a farming family and their adult son who works in the business with no other income. In the 2025-26 financial year, the tax would be $19,614. This will be lower again if we applied the 2026-27 financial year rates. From July 2028, that tax is $45,000, or 30 per cent, simply because the trustee pays a minimum tax and a beneficiary's credit is non-refundable. The result is $25,386 more tax a year on the same income, and each person loses around $8,462 of unusable credit. That's not fair. Abe goes on: escape routes and restructures all cost. Restructuring can mean stamp duty, and the fixed distribution locks in beneficiaries and shares. How is this fair? How is this equitable for a small-business entity? It's not.

Then we've got stamp duty. The ATO's rollover relief doesn't cover stamp duty. Duty is a state tax, so it depends on where the property is and how you restructure. The expanded rollover relief gives exemptions to income and capital gains tax for three years if they restructure. It applies for three years from 1 July 2027. I'd note that CPA Australia says the draft leaves state taxes untouched. What it does not address are the regulatory and state stamp duties, and the stamp duty barrier remains, so a restructure can be tax neutral federally and still trigger a large state duty bill.

The legislation lets an existing discretionary trust avoid the new tax by choosing to make fixed distributions to prenominated beneficiaries, with tax still paid at the beneficiaries' marginal rate. What is the point of a discretionary trust when they must now be fixed? The question that has arisen from my constituents is: how is it fair that a taxpayer has set up a structure based on historical discretionary trust rules, and now the goalposts have moved? Shouldn't the rules be grandfathered? My constituents put it quite rightly. Commentators have called one consequence 'a birth tax'. Under the current draft, beneficiaries generally need to be nominated when the trust makes its election, so a child born later can't easily be brought in.

I want to go through my email inbox, with some other feedback. We've got Carrie, from South Gippsland. Carrie says that the proposed tax on trusts will hurt essential businesses in the Monash electorate. Like you, Madam Deputy Speaker Chesters, I represent a regional community. Oftentimes we will have a farming family who are in tough times, in drought or a bad season, and one of the partners will have a business outside of the family farm in town, be it food or hospitality, that is an important supplement to their income—so it's going to hurt those small and family-run businesses as well. Carrie also says many family, small and medium-sized businesses are structured as discretionary trusts for asset protection flexibility in managing irregular income and distributing profits and for family business continuity. These family, small and medium-sized businesses are critical to the local economy. Carrie says:

Family businesses such as tradies, accountants, cafes, retail shops and hairdressers are likely to face considerably higher tax bills. Many businesses will be forced to restructure their operations, which can cost tens of thousands of dollars in legal, accounting and financial aid.

One thing I get feedback on regularly is that we are creating a compliance industry in this country because red tape and duplication of regulations of tax imposts are growing. As a small-business owner, you do not have a HR department, an IT department or a marketing department; you are the marketing manager, the IT manager and the HR manager. At the same time as you are wearing all those hats, you've got to run a business and serve your customers. These regulatory imposts, this additional red tape—small businesses are drowning in red tape right now, and this just makes it worse. Carrie says:

At a time when businesses are already dealing with escalating cost pressures, I believe we should be making it easier—not harder—for businesses to invest, grow and employ more Australians.

I say to Carrie: hear, hear. I say to Carrie: as your local federal member in this parliament, I'll always stand on the side of small and family owned businesses. The coalition—the Liberal Party and the National Party—will always stand on the side of small and family-run businesses because it's those businesses that get out of bed every morning and put their houses on the line to give other Australians a shot at a job. It's those Australians that are the first to put their hand up to volunteer in our service clubs and community organisations. It's those Australians who are the first to put their hands in their pockets to sponsor our food banks, our footy and our netball clubs, and to run, invest in and grow our regional communities.

I've had feedback from an accountant, also in South Gippsland. Four clients attended their office in one day, when this was announced, who had to restructure. The cost of this is huge, and they can't afford the cost right now because the cost of everything else is going up and up, and there is no respite for these small businesses. The changes will be made and the tax paid will be identical, but the disruption and impact are huge. Quite frankly, they will be left wide open with no protection in many cases. I had a solicitor from my hometown of Warragul contact me saying that local people that that solicitor provides advice, support and service to are concerned. Their main concern is the unknown. They don't know. It goes to Carrie's point earlier about the goalposts continuing to move. This solicitor says that we definitely need certainty in the testamentary discretionary trusts space. There have been changes since the budget, but they still have big concerns. As it stands, people will need to change these trusts to remove companies and trusts as beneficiaries. However, in some cases those who have set up these trusts have lost the capacity to make those necessary changes.

There are fewer than 11,000 active testamentary discretionary trusts currently in existence in Australia, compared to over 840,000 discretionary trusts. These testamentary discretionary trusts are largely set up to protect really vulnerable people, protecting inheritances for children, widows, widowers and people with a disability who are beneficiaries after a death. There is a concern, this solicitor from West Gippsland says, that people just don't know. She's had lots of discussions with clients, but she doesn't have any clarity. She says, 'Our advice is that we'll just have to wait and see.' That is a response from so many businesses across my electorate and, indeed, across regional Australia right now under this government who pulled the rug out from under them and moved the goalposts and who run on a legislative platform of surprise for small businesses, who just don't know what is around the corner for them except for the fact that costs are going to rise and regulations are going to increase under this government.

It's very common for some parties, particularly family members, to work in a business on a paid or unpaid basis. This leads to consequences in the sense that it often undermines one business partner in terms of capital contribution and labour contribution. The consequence of these changes will be fewer people choosing to go into small business. That is the Australia that we're living in right now under this federal Albanese Labor government. I really worry for the next generation of younger small-business leaders in this country that they have had such a fright from looking at all of the obstacles, all of the imposts and all of the challenges that their parents' generation and the current generation of small-business owners and leaders in this country are facing. We've got young people right now, this week, starting their VCE exams, and my best wishes to them. To own and run a small business is a noble vocation. It should be applauded, it should be encouraged and it should be celebrated. And yet, right now, under this federal Labor government, the Prime Minister is making it harder. Small-business owners have never had to work harder for less and have never faced more risk and red tape. This is a prime example of that. It is warning off younger Australians who would otherwise say: 'You know what? I love entrepreneurialism. I love running a small business. I love serving my community. I love working with my staff. I've got a few ideas about some products or services that I could offer to my local regional community. I think that would add to the visitor economy and the attractability of the town. It'll employ people from farming families.'

As I said earlier, when times are tough, often being able to supplement that farming family's income through a hospitality business or a gift shop business in town can make all the difference. Right now, there is a big flashing red light that this government is imposing on small-business owners and, indeed, the next generation of entrepreneurs and small-business owners in this country by asking, 'For the imposts, the hours, the risk and the red tape that you will be under, is it really worth it? Tragically for this country, there are thousands of younger people looking right now at the risks and reward outcomes and saying: 'I think under this federal Labor government it's not worth it. I'll go and get a salaried role. I'll go and become an employee, because risking my house and risking my own children's future to run a small business with all of this ahead of us just might not be worth it.' That is a tragedy. It is a crying shame, because we cannot do without small businesses. They are the largest employer of people right across this country. They employ young people, often giving them their first shot at a job and their first experience in a workplace. They provide flexibility and opportunities for progression, particularly for women. In regional Australia, small-business owners, particularly women, have said to me, 'Working in a large corporate entity in a capital city, I just didn't get the opportunities for career progression and promotion that a small family run business afforded me.' We're going to lose out on those opportunities, and that is a crying shame.

Right now, small business is up against it. It's up against rising costs and rising red tape and not getting a fair go in this country under this federal government. But I stand on the side of small and family run businesses. The Liberal and National parties stand on the side of Australian small and family businesses. We will give you a go, we will support you, we will stand up for you and we will do everything we can to defeat the punitive, the unfair and the untold pressures that this federal Labor government is imposing on thousands of Australian small-business owners right now.