Master Builders Transcript: Interview with Tom Connell, News 24

Event: Interview with Tom Connell, News 24

Date: 7 August 2026, 3.30pm AEST
Speakers: Denita Wawn, Master Builders Australia CEO

Topics: The damaging impacts of the Federal Government’s proposed trust changes

E&OE

Tom Connell, News 24 host: Welcome back. Well, the construction sector is pushing back against the Government’s proposed changes on trusts. Master Builders Australia says the changes will saddle small firms with far greater costs, driving up the overall cost of building and also risk undermining consumer protection. Joining me live now, Master Builders Australia CEO Denita Wawn. Thank you for your time. So, step through an example, I want to try to get my head around this. You gave the example of a family-owned business with a taxable income of $400,000. So, is that the actual profit, and is what two adults give or take running that, and that’s after all their expenses and before salaries. Is that the example here?

Denita Wawn, Master Builders Australia CEO: That is a very good example. It’s you know 20 per cent of building and construction businesses are using trusts, and it’s by and large that exact situation. Mum and Dad working together, perhaps no employees, they’re either builders or they’re specialists, they’re subcontractors, and they’ve made a decision, particularly usually to protect the family home in undertaking a trust structure, which is far easier generally than a company structure, and it’s been the structure that has been recommended by accountants for smaller, medium-sized businesses for decades.

Host: Okay, and so in this scenario, what is the comparison on this $400,000 of, I’ll call it profit, under the current rules and the post rules? How much tax would they pay at the moment, and how much tax are you saying they’ll pay, including any other costs, if and when these changes go ahead?

Denita: Yeah, we’ve spent a lot of time since the Federal Budget doing an analysis and talking to a lot of accountants who are the ones with this information about what it actually means in real time, and we understand from the accountants’ analysis that you can have tax that would increase by up to 70 per cent if you stayed in the tax structure because there will be different tax arrangements with the uplifting tax that is being applied to trusts. So, you have the choice: do you stay in that situation and pay more tax, or alternatively, do you transfer over to a company structure where there is less tax paid at 25 per cent. The problem is, though, that by transferring over, the accountants are telling us that the cost implications of that can be anywhere between $80,000 and about $120,000 odd…

Host: So, it’s got to be certain size.

Denita: …so you’re stuck if you’re under existing arrangements with trusts. You either pay more tax, or you pay a significant uplift of changing your structure.

Host: Someone watching might go, “Well, I’m PAYG. I, I just have to pay my tax regardless.” What would the tax bill be at the moment for someone on that trust? It would be much lower than a PAYG, even if you split it $200,000 each, right?

Denita: Obviously if you’re splitting at $200,000 each, you’re still paying the top dollar because you’re over the maximum threshold. But it will depend on the different structures, how many different beneficiaries there are in the trust…

Host: Because if you have a few different ones, they can all get the tax-free threshold.

Denita: They can.

Host: And then a business like this and ends up with a lower tax rate than, as I said, someone you know getting a salary.

Denita: That’s right, Tom and look, what we’re saying is that these are structures that have been available for small business for decades and decades. What we’re saying is that there’s an issue of fairness and in-principle here. People have gone into…

Host: You want it grandfathered?

Denita: …these people have gone into good faith into these arrangements that have been a structure that has been given an opportunity by Government, and then halfway through the game, the Government is changing the rules, and we say that’s fundamentally unfair. So, putting aside whether or not you agree or disagree with the policy intent by the Government or the principle, the end of the day is that a decision has been made for this to retrospectively apply to existing trusts, and people have made the decision in good faith to utilise that structure.

Host: And if someone out there, maybe there’s a builder watching me saying, you know, it’s all right for you, Tom, in your white collar and your comfy studio. I work all these hours each week, and you know, work really hard, and I get more of a reward from it. Whether that’s fair or not, it’s changing it, I guess. And do you imagine people that building costs go up? Is that your prediction?

Denita: Well, this is going to cost builders money. It’s going to cost tradies more money if they have to either stay in this trust arrangement with higher taxes or they have to transfer. So, the costs have got to be passed on somewhere, and unfortunately, I think that’s going to be passed on to the consumer.

Host: Out of the, not so much this, but the other changes around taxes. Is there any impact so far you can point to? Is there a major project that hasn’t gone ahead specifically because of you would argue the Government’s changes on CGT, negative gearing?

Denita: I think it’s important to put this into context, Tom. Even before the Federal Budget, we were hearing of projects being put aside. Why? Because we’ve seen an increase of construction costs by 50 per cent. We’ve seen productivity decline by 20 per cent. So, what we saw pre-budget was projects being put aside because the numbers did not stack up. What we’ve seen post-budget, when you think of capital gains, negative gearing changes. We’ve seen the changes to self-managed super funds arrangements in terms of investment into residential.

Host: The people that have previously bought the off-the-plans [inaudible].

Denita: That’s right.

Host: Is there a project you can say since the budget they’ve gone nah, we’re not doing this?

Denita: I’ve heard of a plethora, and I would argue…

Host: Can you name any?

Denita: … I’m not going to name it because of privacy reasons, Tom. But I can tell you now, in talking to our members around the country over the last month or two, a significant number of projects have been set aside because people will no longer invest in our industry.

Host: I was going to talk immigration and workers, ran out of time. That’s my fault, not yours. Maybe next time. Denita Wawn, thank you.

Denita: Thank you.

Media contact: Dylan Hafey, Adviser, Media & Government Relations

0497 330 064 |  dylan.hafey@masterbuilders.com.au