Julian Smith

On median Australian 🇦🇺 numbers: Removing negative gearing offsets requires roughly +13% aka $88/week rent growth to restore investor after-tax cashflow. The converse is median drop of 33% aka $300k on Australian residential investment property. Which do you see happening?

The only thing more surprising than the stupidity of the changes are that the people behind them have been blindsided by the backlash. This budget doesn't just expose their agenda to keep more people poor - it reveals how many more people understand economics better than they do.

But they have never worked a day in the private sector; never started a business; built a new product or service; hired a single soul from their hip pocket; or struggled for years, always at risk of going under… What we are seeing is the lid being lifted on those who have always lived completely taxpayer-funded lives trying to take and tax as much as possible to feather the public sector nest. They have never known what it is like to draw a private wage and/or profit. They think it is a zero sum game: any private income, profit or capital gain needs to be redistributed back to government and its dependents. It is the only way they know how to make money: by taxing private citizens and corporations to fund the public oligarchy and its way of life…

The "death tax" scare campaign is the laziest dog whistle in the playbook. Here are the facts straight from the Budget papers and ATO: Inheritance isn't taxed. Estates aren't taxed. Farms are exempt. Small business CGT concessions are retained in full. Existing testamentary trusts are grandfathered. Fixed testamentary trusts can still be set up for new wills at zero extra tax. The only change: new discretionary testamentary trusts created after 12 May 2026 will pay a 30% minimum on trust income from 2028. There are about 10,500 testamentary trusts in Australia — 1% of all trusts. And only the discretionary, income-splitting variety set up from now on is caught. 30% is what a nurse on $80k already pays on her top dollar. The Right isn't defending battlers. They're defending the tax planning industry that lets wealth split income across grandkids and bucket companies to pay less than wage earners on the same money. If you want to leave assets to your kids, nothing stops you. What's stopping is the loophole.

From a reader... Dear Sir Under current legislation, all trusts (not just discretionary trusts) are taxed on accumulated income to which no beneficiary is presently entitled. Such income tax is assessed to the trustee under section 99A of the Income Tax Assessment Act, 1936 (“the Act”). The tax rate assessed to the trustee is at the highest marginal rate, plus Medicare. That imposition amounts to 47% of the accumulated income. The Commissioner retains a discretion to assess such income under section 99 of the Act, (which applies personal rates of taxation) but that discretion is exercised sparingly and only in limited cases, such as deceased estates and bankruptcies. Again, under current legislation, a share of trust income – to which a minor or a non-resident beneficiary is presently entitled to – is assessed to the trustee under section 98 of the Act and assessed again to the beneficiary with a full credit given to the beneficiary for the tax assessed to the trustee. The 2026 Federal Budget proposals change the concept of the taxation of beneficiaries of trust estates that has applied since the Federal Government introduced income tax. That is done by treating the trustee as a separate taxpayer on income to which beneficiaries of a discretionary trust are presently entitled to. Now, a beneficiary is said to be presently entitled only on the after-tax net income of a discretionary trust estate. Any credit for tax paid by the trustee, under these new proposals: is not fully credited to the beneficiary if it produces a cash tax refund to the beneficiary, and in the case of a corporate beneficiary the tax paid by the trustee is not credited at all. With all due respect to Treasury officials and the Treasurer, who devised this new arrangement, there is a complete misconception on who is being assessed on income to which a beneficiary is presently entitled to. Unlike companies, where the taxable income of a company is legally and beneficially derived by the company, in the case of trusts, including discretionary trusts, any net income of a trust estate to which a beneficiary is presently entitled to is income of the beneficiary, not the trustee. By taxing the trustee on income to which the trustee is not beneficially entitled to, and not passing the tax paid by the trustee to the beneficiary who is entitled to that income from the trust estate is not a tax, but – in my opinion – an illegal penal confiscation. Allow me to explain: The Core Problem: When a trustee is assessed on income to which a beneficiary is already beneficially entitled, without any credit (or a full credit) being passed to the beneficiary, two (2) serious legal problems arise with regard to the Constitutional validity of the legislation purporting to assess: 1. Section 51(ii) — Is it a Valid "Tax" or a Penalty/Forfeiture? The High Court in Matthews v Chicory Marketing Board (Vic) (1938) 60 CLR 263 confirmed that a tax is "a compulsory exaction of money by a public authority for public purposes, enforceable by law, and... not a payment for services rendered." A "tax" – in the constitutional sense – requires it to be imposed for revenue-raising purposes, not as a punishment or confiscation. See Woodhams v Deputy Commissioner of Taxation of the Commonwealth of Australia (1997) VSC 59 on what constitutes a penalty (and not a tax). The key issue is whether imposing the full tax burden on a trustee — without any (full) credit mechanism for the beneficial owner — crosses the line from taxation into something more like a forfeiture or a penalty. In these circumstances, I submit the trustee’s right to exoneration and indemnity are in jeopardy and a beneficiary would be entitled to restrain the trustee from using trust funds to discharge a personal obligation, that is not a fiduciary obligation, even if the obligation was imposed by flawed legislation. 2. Section 51(xxxi) — Acquisition on Just Terms If the Commonwealth imposes a liability on a trustee with respect to property or income beneficially owned by another, and the trustee cannot recover that tax from the trust estate or beneficiary through the tax legislation itself or under the terms of the relevant trust deed, this could constitute an acquisition of property (money) from the trustee without just terms, contrary to s 51(xxxi) of the Commonwealth Constitution. The High Court has ruled in Minister of State for the Army v Dalziel (1944) 68 CLR 261 and most recently in Government of the Russian Federation v Commonwealth of Australia [2025] HCA 44 that section 51(xxxi) of the Constitution will protect a party whose property is assumed by the Commonwealth without compensation. The term “property” is widely characterised to give the affected party full constitutional protection. In my view, the proposed arrangements don’t fall into the unintended consequences camp, as is often claimed when some controversy is later discovered after a proper and considered analysis. In this case, the proposed arrangements are fundamental misconceptions, that fail to recognise basic constitutional protections.

Rich people want government handouts for everything you'd think its socialism

Welcome to the “right” side Hughesy! And keep going 👏🏻👏🏻👏🏻👏🏻👏🏻 The more the merrier speaking out about the morons in power in Aus!