Key Highlights

  • Treasury told senators about 238,000 small businesses operate through discretionary trusts.
  • Subtracting 140,000 from 350,000 produces a derived estimate of 210,000 affected businesses.
  • The figures describe different populations and may use different assumptions.
  • The Senate Economics Legislation Committee report is due on 13 November 2026.

How many small businesses would Labor's 30 per cent minimum tax on discretionary trusts actually catch? With a Senate committee due to report tomorrow, the official answer depends on which set of figures you read. Treasury told the inquiry about 238,000 small businesses operate through a discretionary trust, yet earlier Treasury analysis implies about 210,000 would be affected. A gap of 28,000 businesses matters when senators are being asked to vote within days.

The two sets of numbers

The first figure comes from the Senate Economics Legislation Committee inquiry. Treasury told the committee that about 238,000 small businesses operate through a discretionary trust.

The second figure comes from Treasury analysis from October. About 350,000 active small businesses, or roughly one in six, used discretionary trusts in 2022–23, and about 140,000 of those would not need to pay the tax.

The earlier Treasury figures put active small businesses using discretionary trusts at about 350,000, with about 140,000 expected to pay no extra tax or restructure in a given year.

Hypothetical example: subtract 140,000 from 350,000 and the result is 210,000. That is 28,000 fewer than the 238,000 figure given to the inquiry, a difference of about 13 per cent. Put another way, the earlier analysis implies 60 per cent of small trust businesses would be affected, while 40 per cent would not.

Why the figures may not be measuring the same thing

It is not clear from the public record that the two numbers are meant to be compared directly. The 238,000 figure describes businesses that operate through a discretionary trust. The 210,000 figure is a derived estimate of businesses that would be affected in a given year.

There are several possible explanations for the gap. The figures may use different years of data, different definitions of a small Business or an active business, or different assumptions about who would restructure rather than pay. None of these explanations has been confirmed by Treasury.

What the gap does show is that the count of businesses directly caught by the measure has not been clearly settled in public. That matters for a reform the government describes as targeted.

A third and fourth figure

The business count is also contested politically. The Australian Chamber of Commerce and Industry has said 240,000 small businesses would be hit. That is close to Treasury's 238,000, but the inquiry figure describes businesses using a trust, not necessarily businesses paying more tax.

Treasurer Jim Chalmers has said fewer than 10 per cent of businesses would be affected. That claim uses all businesses as the base, which is why it sounds much smaller than the industry figures.

Both framings can be technically defensible. A share of all businesses produces a small percentage; a count of small trust businesses produces a large number. Neither tells you how much a typical affected business would pay.

What the Revenue and cost figures add

Treasury has given more detail on revenue than on business counts. At the 6 November hearing, Treasury's Emma Gabrielsen said about 40 per cent of the $4.5 billion revenue estimate, or roughly $1.8 billion, comes from businesses, and 40 per cent of that from trust businesses with net revenue under $1 million a year. That gives about $720 million.

Liberal Senator Jane Hume said that "doesn't sound like an enormous amount for the amount of anxiety and stress that you are causing". Treasury's Laura Berger-Thomson replied that part of the rationale was "to prevent even further growth in these types of structures in our economy".

The revenue figure and the business counts have not been published in a form that links them. Without that, it is hard to estimate the average extra tax per affected small business, or how many face only restructuring costs rather than a higher tax bill.

Business counts drive cost estimates. The government's Impact Analysis assumes an average restructure cost of about $11,000 and puts ongoing costs at about $48 million a year. CPA Australia says ongoing costs could be $221 million to $595 million a year.

If more businesses are affected than assumed, total compliance costs rise accordingly. Industry groups have also pointed to sector-specific figures. Master Builders says more than 90,000 builders use trusts.

The Family Business Association's Catherine Sayer said the Senate was being asked to vote on a $4.5 billion tax without published modelling. A clear, reconciled count of affected businesses is one of the gaps critics are pointing to.

Where the legislation stands

The minimum tax is contained in bills, not law. The House passed Tax Reform No. 3 and the Minimum Tax on Discretionary Trusts rates bill, along with Tax Reform No. 4, on 29 October. The bills were referred to the Senate committee on 15 October.

As introduced, rollover relief for restructures would run from 1 July 2027 to 30 June 2030, and the minimum tax would start on 1 July 2028. The government is reported to be targeting Senate passage in the third week of November, though that has not been officially confirmed.

Labor needs the Greens, as the Coalition opposes the trust bill. Greens leader David Shoebridge has said the small business exemption goes too far, which suggests any deal may change who is in or out, and so change the count again.

What to watch

Friday 13 November 2026: the committee is due to report. Watch for any recommendation that Treasury publish reconciled data on the number of affected businesses, or distributional modelling by income band.

Third week of November: the reported target for a Senate vote. Any amendments to the small business exemption would alter the affected population.

December: the Mid-Year Economic and Fiscal Outlook could revise the revenue estimate if the package changes.

1 July 2027 and 1 July 2028: the proposed start dates for rollover relief and the minimum tax respectively.