'This is a tax stick up that would make Ned Kelly blush'

THE Property Council of Australia has called on the government to delay its poorly thought-out discretionary trust tax grab to give businesses more time to work through the changes.

Property Council chief executive Mike Zorbas said time was money and rushed outcomes were going to damage the economy.

“Business needs a breather," Zorbas said.

"In the midst of a perfect storm of rising costs for the property industry, parliament must stop the clock on supply-shrinking trust changes.

“This is a tax stick up that would make Ned Kelly blush. Why are these massive changes shoved through parliament?"

Zorbas said the changes are happening in the blink of an eye.

"It is happening on top of the CGT and negative gearing hikes and this will mean fewer homes for Australians who want to buy and rent," he said.

“Just this week we learn Cabinet wasn’t provided the usual full Treasury advice on the downsides of trust changes in the Budget. This has not been denied.

“At every step, these ‘reforms’ have been pushed through without proper consideration or consultation with industry.

"Government is releasing these changes on the run and in the dark. Business can’t make informed decisions with moving targets.

“Small and family-owned businesses will need complex, costly and time-consuming advice to work through these changes. They deserve adequate time to get it right.”

Zorbas identified four key reasons to delay the implementation of the trust changes.

1. Key pieces of the package have not been drafted or released to business. The ministerial instruments clarifying how the rules will work have not been released.

2. Government departments including the ATO will need time to develop and release guidance on how they will interpret the rules (if and when finalised). Businesses need the full picture before they can understand how these rules will affect them.

3. The government has severely underestimated the time and cost of business restructuring.

4. Property businesses are already struggling with negative gearing and CGT impacts on the viability of their projects. Three new taxes at once is too much for small business.

“As our fellow industry groups outlined in the Senate hearings, restructuring will be a lot more complicated and expensive than the government has naively assumed," Zorbas said.

"Businesses, especially small businesses, can’t just absorb massive costs at short notice. They need time to get the cash.

“Putting some space between these reforms would give businesses much needed breathing room.”