The Australian federal government proposed a minimum 30 percent tax on discretionary trusts on July 31 [1].

These measures aim to close tax loopholes and ensure a baseline level of revenue from trusts, while simultaneously targeting fraud within the National Disability Insurance Scheme (NDIS). The proposal represents a significant shift in fiscal policy that could impact thousands of small businesses and high-net-worth individuals.

The Australian Chamber of Commerce and Industry responded to the plan. The organization said the government’s proposal for a minimum 30 percent tax on discretionary trusts [1] would lead to massive tax increases for small business operators.

Parallel to the tax changes, the federal government announced a crackdown on NDIS providers. Officials said the government will crack down on NDIS providers claiming for banned services [1]. This initiative focuses on eliminating the misuse of support items to protect the sustainability of the public funding pool.

The government's dual approach targets both systemic tax avoidance and operational fraud. By implementing a minimum tax rate of 30 percent [1], the administration seeks to prevent the use of trusts as a primary vehicle for reducing taxable income below that of a standard company rate.

Critics from the business sector argue that these changes will stifle investment and increase the financial burden on family-run enterprises. However, the government said the measures are necessary to ensure a fairer tax system, and to stop the leakage of funds from the NDIS through fraudulent claims [1].

“The Australian Chamber of Commerce and Industry said the government’s proposal for a minimum 30 percent tax on discretionary trusts.”

These policies indicate a broader Australian government strategy to tighten fiscal oversight and recover public funds. By targeting discretionary trusts, the government is moving to limit the effectiveness of trust-based tax planning, while the NDIS crackdown signals a transition from growth to rigorous compliance and auditing within the disability sector.