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Monday, 8 February 2010
Page: 737


Dr JENSEN (4:23 PM) —I wish to raise the very important issue of special disability trusts. A constituent of mine, Ray Walter, has a disabled son for whom he and his wife are trying to establish a trust to ensure that their son has adequate funds for the foreseeable future. Mr and Mrs Walter are self-funded retirees, so they understand the importance of self-reliance and are trying to do their best not just for their son but to ensure that he is not a burden on taxpayers, as far as that can be done. Mr Walter and several other parents have worked extremely hard in looking at legislation and making some very valuable submissions to the government as to how this form of trust could be established.

Unfortunately, progress on this important issue seems to be bogged down in the debate over taxation, with concerns that a trust has the potential to be used for tax avoidance. The people who want to use this form of trust all have disabled family members, which should be a criterion which would eliminate the sort of people who are just looking for a convenient tax loophole. One of the government’s complaints is that the suggestions by Mr Walter and other family members of disabled Australians would result in the beneficiaries of SDTs enjoying more favourable tax treatment than beneficiaries of other trusts—a letter from the Treasurer’s office of 8 December 2009. I would have thought that this was not unreasonable.

The alternative to having money put aside in trusts—the families’ own money, I might add—giving a significant saving to the taxpayer as well as improving the lives of those disabled Australians, is that the Australian taxpayer will once again have an impost imposed. Moreover, there are many instances where, because of government policy, tax incentives or more favourable tax treatment are extended to certain sectors of the community. The Treasurer’s letter states that there are probably only 5,000 families who would benefit from these trusts in the first four years, which is hardly opening the floodgates to massive tax implications. Although the tax effects are of genuine interest, the government should appreciate that they need to be looking after the Prime Minister’s favourite working families who are trying to look after disabled relatives, and to be relying on merely the financial bottom line does not speak well for a government trying to paint itself as caring and socially responsible. I urge the Treasurer to establish fair and equitable disability trusts as soon as possible.