The debate over family trusts is falsely framed and unfairly justified as tax avoidance. The government argues income should be taxed in the hands of the person who earns it and that trust distributions to family members can unfairly reduce tax liabilities. The other argument is that workers don’t have that option.
The first argument has merit where trusts are used simply to shift income to people with little or no connection to the underlying enterprise.
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Peter Strong is the former chief executive of the Council of Small Business Organisations Australia.
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