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Event: Interview with Steve Austin, ABC News Brisbane Radio
Date: 7 August 2026, 8.45am AEST
Speakers: Denita Wawn, Master Builders Australia CEO
Topics: The damaging impacts of the Federal Government’s proposed trust changes, capital gains tax and negative gearing changes, self-managed super funds
E&OE
Steve Austin, ABC News Brisbane Radio host: For many, it’s the Australian dream: work hard, build some savings, get a deposit, buy a house, pass that house onto the next generation. Protecting that nest egg has become even more contentious since the Federal Government announced its proposed changes to how trusts are structured, and for the building and construction scene, according to Master Builders, around 20 per cent of them rely on, you guessed it, trust structures, and the MBA, the Master Builders, are warning about where we’re heading. Denita Wawn is the Master Builders Australia Chief Executive. Denita, just explain how building and construction businesses are using trusts, supposedly lawfully at the moment, if you would please, because there’s this feeling by put out by the Federal Government that if you’re using it, you’re a tax avoider.
Denita Wawn, Master Builders Australia CEO: Yeah, not at all. So, we understand from our research that at least 20 per cent of the nearly 500,000 building and construction businesses around the country use trust structures to run their business. They do so because it has been a legitimate structure to ensure that you are de-risking. Many of these are family businesses, so there’s capacity to ensure that there’s distribution and so forth. So, it has been a legitimate, long-standing process to use trusts, as opposed to the quite complex arrangements when it comes to setting up a company. And so, what the Government has said is that these people that have gone in in good faith in turning their business into a trust, suddenly the rules have changed halfway through the game. They’ve got to change, and they’ve got two options before them. They either stay in a trust arrangement and pay significant extra tax, and our accountants are telling us that it could be up to 70% extra…
Host: That’s what the federal government wants. I mean, they’re quite upfront about that. That’s what the Federal Government wants.
Denita: …that’s right. But the other option. So, its 70 per cent extra tax, or you change arrangements, and it’s going to cost you over $100,000. Now we’re talking about small businesses working on very, very slim margins. If the Government were genuine about this change, they wouldn’t change the rules halfway through the game. They could at the very least, grandfather the provisions so there is no retrospectivity. Those small businesses, that tradies who are trying to build our homes, they should not be suddenly faced with this daunting task.
Host: So, this is because husband and wife operations, in essence, they’re small businesses. That small business leverage comes from mortgaging the family home, and so they’re protecting that family home, their sole asset to the business, and they protect it with a trust. Do I understand it correctly?
Denita: Yeah, that’s right, exactly and it is a high-risk operation. They’ve got a lot of costs, and they are working on very, very slim margins. So, they are using legitimate structures to ensure that they minimise the impact on their families, and that has been a long-standing option for businesses for a long period of time. The Government wants to change it, and whether we agree or disagree with those changes, what they shouldn’t be doing is suddenly saying to nearly 100,000 tradie businesses around this country. You’ve got to change, despite the fact that you’ve gone in good faith and structured the business accordingly.
Host: So, what’s the alternative, they would set up a proprietary limited company?
Denita: They would have to set up a company to ensure that they can minimise the tax impacts. The problem is, though, that the accountants are telling us the costs of then transferring all of your business over from a trust arrangement to a company arrangement can be anywhere between $80,000 and around about $140,000, with ongoing costs that you are not currently having to pay out. So, that is a significant impulse to builders and subcontractors that are finding things very, very difficult at the moment. At a time when they are short of workers, material costs are high, they’re getting hit with diesel levies, and they’re trying to build the homes, the schools, and the hospitals, and everything else for our community. So, at the very least, the Government should be grandfathering these trust changes, so they are not detrimentally impacting small business.
Host: Now, I don’t know if you follow the Treasurer Jim Chalmers’s social media accounts, but he’s been trumping frequently, and saying post the changes or post the budget, a record number of companies are being set up in Australia, proprietary limited companies. And what you’re telling me seems to back up what an accountant told me last week, that this is not a boom in business. This is small businesses being forced to protect, to change from a trust structure to a proprietary limited structure, and what you’re telling me is it’ll cost each every single one somewhere between $80,000 to $100,000. The Treasurer Jim Chalmers says that’s proof of success of their program?
Denita: Well, can I say that our members are ropeable. We’ve had a Federal Budget that has had a triple whammy on the building and construction industry at a time we can least afford it.
Host: Explain the triple whammy.
Denita: Well, changes to negative gearing a capital gains tax. By the Government’s own figures, it’s going to be a decrease in supply of homes being built around Australia. They have decided to cut off self-managed super fund’s capacity to borrow money to invest in residential housing. Again, our calculations show that that is going to be a decrease in the supply of housing, and then now we’ve got these trust arrangements hitting nearly 100,000 odd businesses around the country for building and construction alone. That’s not counting any other industries that are now faced with significant structural changes and significant costs. It is detrimental to the success of small business around this country with these trust changes. And as I say, the Government, whether we agree or disagree with their proposal, should not, under any circumstances, be forcing people to be in this situation. They should be grandfathering the existing arrangements, and they can start afresh with any new business that starts from 1 July next year.
Host: Let me give you a response from a listener who’s been listening.
Jen says, “Businesses that decided to make a trust, take advantage of loopholes, should not now complain that they need to operate like all other businesses. You only pay taxes on profits, so good on you for making a profit.”
Do you want to respond?
Denita: Yeah, look, I agree to disagree with you Jen. These are legitimate business options that people have had for decades, decades, decades. It is not about…
Host: It’s not a loophole. It’s not taking advantage, you’re not gaming the system.
Denita: Not gaming the system. The system has been there for a long period of time. There are laws in place that if people game the trust system, then people can be held to account, and the regulators have not utilised those rules effectively enough for those who do the wrong thing when it comes to trusts. These are legitimate business structures that people have gone in good faith to utilise to set up a business. What we’re saying is, if the Government wants to change the goalpost, that’s fine, but you don’t do it halfway through the game.
Host: My guest is the Master Builders Australia Chief Executive Denita Wawn. So, is this going to change? Federal Parliament returns either next week or the week after, forgive me, I forget which. Is anything going to change? Have you been talking to Jim Chalmers, the Federal Treasurer’s Office, about this?
Denita: Yeah, we’re obviously doing whatever we can to communicate with the Government, not only the Minister but other relevant ministers as well as Labor marginal seat holders and telling them the impact it’s going to have on our members. The Government currently has a discussion process in place. We are hoping that they are going to listen to the small business community because, as I said, this is not just about building and construction businesses. It is an awful lot of the small business community around Australia…
Host: So this is not the big construction companies, this is the husband-and-wife operations you’re referring to, this 20 per cent?
Denita: Absolutely, 99 per cent of building construction businesses are small to medium-sized businesses. In fact, around about 90 per cent employ five or less employees. We’re talking about the mum and dad builders, the tradies, the subcontractors, who have gone in good faith in setting up a trust, as have hundreds of thousands of small business operators around this country. They have been told that they have to change their business structures, despite the fact that they have gone into those structures in good faith. That is disingenuous to the hundreds of thousands of small businesses around this country.
Grandfather these provisions, at the very least, we say.
Host: I’ll speak to you again. Parliament returns Tuesday next week, so we’ll see what, if anything, changes. Denita Wawn, thank you very much.
Denita: Thank you,
Host: Denita Wawn, Chief Executive of Master Builders in Australia.
Media contact: Dylan Hafey, Adviser, Media & Government Relations
0497 330 064 | dylan.hafey@masterbuilders.com.au