There is an old saying that nothing is certain in life except death and taxes, but in Australia we've managed to introduce a third certainty: if there is a tax concession available, someone will find a way to turn it into a property investment. And, if that concession is particularly generous, they might establish a family trust to manage it. I don't begrudge anyone working hard, building a business, investing their savings or trying to get ahead. That is part of the Australian story—but so is the fair go, and the fair go means the rules should not depend on whether you earn your income through a pay packet or through a structure that requires three accountants and a family lawyer to explain. Working Australians should not need a trust deed to get a fair deal.

These three bills, the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 and the Treasury Laws Amendment (Tax Reform No. 4) Bill 2026, put that principle into practice. They rebalance how we tax work and investment, encourage new housing and innovation and make sensible adjustments for businesses and workers. Of course these reforms are controversial. Tax reform usually is. Everyone supports a fairer and simpler tax system right up until someone suggests changing the concession they happen to be using. Suddenly the national interest becomes a lot less interesting. But our responsibility is to ask whether existing arrangements still serve Australia, not simply whether someone has come to rely on them.

Start with discretionary trusts, because this is where much of the opposition is focused. There are entirely legitimate reasons to establish trusts—asset protection, succession planning and managing family affairs. The people who have used them lawfully have done nothing wrong. But consider two families earning broadly similar incomes. In one household, both parents receive wages, their employers withhold tax and the rest goes into the family bank account. In the other, income is earned through investments held in a discretionary trust. Depending on its circumstances, the trustee can distribute that income among beneficiaries and reduce the family's total tax bill. Both families may be following every rule, yet their tax outcomes can differ simply because of the structure through which they receive their income. Treasury found that, in 2022-23, families with discretionary trusts faced an average tax rate of around four percentage points lower than families with similar incomes without them. Four percentage points is not a rounding error to someone who earns their living from wages, and the advantages are concentrated. Approximately 90 per cent of private trust wealth is held in the wealthiest 10 per cent of households. That does not mean every trust beneficiary is wealthy or every trust is designed to minimise tax. It tells us where the greatest benefits of the present system flow.

There is a broader budget consequence too. A concession does not cease to cost money merely because the cost appears as revenue never collected. If income from one source receives more favourable treatment, the government must make up the difference through other taxes, reduced services or borrowing. That is why this debate is not a contest between those with trusts and those without. It is a question about how we share responsibility of funding the country we all rely upon. It also exposes a question parliament cannot avoid. Why should two families with comparable incomes face different tax burdens because one has access to a more flexible legal structure? The first of the schedules of the No. 3 bill and the accompanying rates bill answer that question with a 30 per cent minimum tax on the relevant discretionary trust income from July 2028. The trustee pays it. Eligible noncorporate beneficiaries receive credit so the same income is not taxed twice without recognition of tax already paid. There are exclusions for genuine testamentary trusts, deceased estates, special disability trusts, charitable arrangements and primary production income, among others. (Quorum formed) This is not a ban on family trusts. It is a limit on the tax advantage that some structures can deliver.

I recognise the concern amongst business owners who established trusts years ago on professional advice. They may hold business assets, employ staff and have planned their succession around those arrangements. Changing the rules affects real decisions. That is why implementation is important. The legislation provides expanded rollover relief for those who choose to restructure a company or fixed trust. It also offers an election to make fixed distributions to nominated beneficiaries without restructuring. More than 90 per cent of small businesses are not to be affected in any given year. Those protections are not an afterthought. They reflect consultation and an attempt to preserve legitimate business activity while fixing the tax imbalance. We're also helping businesses through a permanent $20,000 instant tax write off, loss carry back and other measures supporting investment. Supporting small business should mean helping people build enterprises and employ Australians. It should not mean promising every tax advantage will last forever, nor can we pretend this issue is new. The Asprey review examined income-splitting through trusts in the 1970s. The Hawke-Keating government returned to it in the 1980s, and the Howard government committed to trust tax reform in 1998. The reform never eventuated, yet the capital gains changes of that period, which made investment concessions more generous, went ahead. The concession survived. The reforms did not. More than 20 years later, the number of discretionary trusts has more than doubled. It is difficult to argue that another decade of inaction will somehow resolve the problem.

That brings me to housing, where the consequences of tax choices are visible every Saturday morning. We all know the scene—young Australians at a home open, working out whether they can stretch their deposit, increase their offer and still afford the mortgage. Often they are competing with investors who can deduct eligible rental losses against other taxable income. The investor gets a tax deduction; the first home buyer gets another Saturday at a home open. Private investment plays an essential role in providing rental homes. The issue is not whether people should invest in property; it is what taxpayers should be subsidising through the tax system. Buying an existing home may be a sound investment, but it does not by itself create an additional home. When supply is already constrained, subsidies for buying existing homes can intensify competition for the same limited stock. And, for the first home buyer, the house is not primarily a line in an investment portfolio. It is security, somewhere to raise a family and somewhere to put down roots and stop worrying about the next lease renewal.

The government's negative gearing and capital gains reforms change the incentive for future investment. They preserve favourable treatment for qualifying new dwellings that genuinely add to housing supply. The legislation provides certainty around what counts as a new home, including the relevant occupancy period, and protects arrangements supporting affordable housing, specialist disability accommodation, public housing and other essential housing. Existing capital gains are protected through the broader transition, rather than being retrospectively rewritten.

Importantly, the legislation recognises that not all housing serves the same purpose. Homes for people with disability, for affordable rentals and for retirement accommodation respond to needs the market does not always meet on its own. Protecting appropriate concessions for those developments is not an inconsistency; it follows the same principle. Public incentives should support identifiable public benefits. That distinction is one reason these reforms are more carefully targeted than a blanket restriction would be. The intention is not to punish investment; it is to attract investment to construction, where more capital can mean more homes. Treasury estimates that housing tax reforms will help another 75,000 first home buyers enter the market over the next decade.

I will not pretend that tax reform alone will build the homes Australia needs. We also need skilled workers, infrastructure, planning approvals and construction capacity. There is little sense in spending public money to expand supply while tax settings encourage investors to bid up existing stock. Government policy should be pulling in the same direction. This leads to the larger economic question behind the No. 4 bill: if we're going to offer tax advantages, what activity should we encourage?

Australia needs people prepared to start businesses, develop technologies, invest in research and employ skilled workers here, rather than take their ideas overseas. Those are not guaranteed investments. A startup may take years to earn a profit, and many never do. That risk is precisely why targeted support can influence whether a promising Australian idea receives the capital it needs. The Innovative Business Capital Gains Tax Concession provides a 50 per cent discount for eligible new equity investments in innovative companies, including for founders, employees and early-stage investors. There are limits on company age and turnover, innovation requirements and a minimum three-year holding period. These are incentives for backing businesses over time, not turning over assets for a quick tax result.

The legislation also modernises venture capital incentives so funds can continue supporting growing companies as valuations and investment needs change. That is especially relevant in sectors such as clean energy, advanced technology and medical research, where capital needs are large and the returns may be years away. The research and development changes apply the same logic. They direct stronger tax support towards core research, increase the turnover threshold for refundable incentive and lift the expenditure cap to encourage more research to remain onshore. Young firms receive targeted support while eligible biotechnology and medical technology businesses can access the refundable offset for up to 15 years, in recognition of the longer product development and approval processes. Developing new medical treatment can mean years of trials, specialised manufacturing, regulatory approvals and considerable expense before a single patient benefits. After all, developing a new medical treatment is slightly more complicated than purchasing your fourth investment property. The economic points I've been making are serious. A country cannot build a future simply by trading existing assets on ever higher prices. We also need to create products, skills, treatments and industries that did not exist before. Tax incentives should help unlock that work.

The No. 4 bill includes two more practical adjustments. First, it allows more businesses to choose monthly pay-as-you-go instalments, helping payments reflect changing trading conditions. Anyone who has run a business knows that 'profitable on paper' and 'cash in the bank' are not always the same thing. Second, it phases the electric vehicle fringe benefits tax concession towards more targeted support while protecting eligible existing commitments. The original discount helped the electric vehicle market develop and, as that market matures, it is reasonable to ask whether the same subsidy is still required in the same form. Good incentives should be judged by the outcome they achieve, not by how loudly people object when they are reviewed.

There is one final measure worth addressing: payday superannuation. Since July employers have been required to pay super alongside wages rather than waiting until the end of the quarter. That means contributions reach workers' retirement accounts earlier, with more time to compound. It also makes unpaid super easier to identify before months of entitlements accumulate. But the transition can result in some workers receiving contributions attributable to the previous financial year and the current year within the same tax year, potentially pushing them above the concessional contributions cap. The No. 3 bill provides automatic transition relief for that timing problem. Workers should not face an unintended tax penalty because we have made their superannuation payments more reliable.