I'm rising to speak on the Minimum Tax on Discretionary Trust bill and the tax reform bills number three and four. The changes outlined in Schedules 1 and 3, which introduce a minimum tax on discretionary trust income, are significant.

Indeed, they are a significant departure from the beneficiary taxation principles that have been in place for 90 years. These proposed changes, they're technical and they're complex. And I note with disappointment and at the risk of repeating myself, that they that we are once again not being offered the opportunity to review the outcome of that inquiry before debating the bills.

I want to talk about these discretionary trusts. I've heard from many small businesses in Bradfield that will be impacted and who rightly use discretionary trusts for fair income purposes. Family and commercial arrangements, quarantining investment risks, asset protection and succession planning, not to mention estate planning, about which some concerns and confusion remain.

Treasury estimates that the additional regulatory compliance burden will be material, about 141 million per annum. Now, while not all of this will be borne by those needing to restructure, it is an acknowledgement of the additional complexity being introduced in the tax system as a result of these bills, rollover relief across an extended period to June 30, 2030, is therefore welcomed.

However, this relief only applies to a small subset of potential costs. Does not provide for the state and territory stamp duty that may be incurred in transferring real assets. The cost of professional services and other advice that trustees will be required to seek to understand their restructuring options and what's required of them.

One Bradfield small business owner told me that she will be forced to close her business as a result of these changes. I think it's reasonable to expect that the federal government will work hard to negotiate with the states to introduce.

Stamp duty exemptions for these businesses, and I'm going to continue to press them to do so. And in addition, despite the deliberate intention of these reforms being to, in effect, force taxpayers to migrate from one structure to another, any tax losses accrued in the original trust structure will be potentially stranded.

Now, this is substantive economic cost being imposed on taxpayers. Who are only restructuring because Government has made a midterm policy change. So surely, this is a question I'm being asked all the time. Surely the Government could have worked to create a statutory mechanism to preserve tax losses during a government-induced restructure.

This is among many of questions that my constituents have raised with me in relation to these bills, and I think it points to a need for greater transparency from the government on other key issues, also raised with me, such as the source of the 4.5 billion additional revenue allegedly generated from these changes, how much is going to come from income splitting, and whether some of these arise because tax losses become stranded or unusable.

And also, more transparency is needed about how the Government settled on a flat rate of 30%. Now, while this aligns with the marginal rate that the average taxpayer pays, it's difficult to otherwise reconcile it to the average taxable income or the average tax paid.

There is another part of the bill that I would like to speak to as well, and that's the clarification of negative gearing exemptions for social and affordable housing. The bill defines affordable housing in line with the Income Tax Assessment Act, but the definition could be improved and made consistent across the country.

My campaign for a nationally consistent definition of affordable housing is ongoing, and I introduced a Private Member's Bill into the House last month to create exactly that. It sets affordable housing rent at the lower of 75% of market rent and 30% of household income for lower household incomes.

The Treasurer has said that he agrees we need a consistent definition, and this bill is an opportunity to progress that agenda. Today we're also being asked to debate another large tax bill, tax reform bill number four, at the same time as the other two bills.

Now I don't support lumping these together. I believe it dilutes the quality of parliamentary debate, but I have some remarks to make on this bill. I support the fact that the Government's proposing to provide exemptions for CGT changes for innovative startups, as I've consistently called for since the tax changes were announced in the budget in May. I acknowledge the Member for Wentworth has put forward different cleaner proposals, and I support the fact that the government is considering these and hopefully doing something about this issue. The bill also makes changes to the research and development tax incentive, and previous reviews of R&D tax incentive have found that the scheme has fallen short of its objectives of encouraging additional R&D and generating wider economic spillovers.

And that's why I support the direction of these parts of the reforms, which seek to better target assistance towards core experimental research and provide stronger incentives for businesses undertaking genuinely innovative work.

These are these are worthwhile reforms that respond to an important part of Australia’s innovation challenge. However, one of the changes is the 15-year refundable offset for biotechnology and medical technology firms, which, in my view, is just not fit for purpose.

Many medical technologies take much longer than 15 years to reach market, and that means the cutoff will come often during costly, late-stage clinical trials, just when we need to be offering them support. We have biotech firms based in Bradfield, and I'm calling on the government to support the member for Curtin's amendment to this bill: remove the 15-year age limit on the offsets for companies in this sector.

These changes also sit within a larger challenge that cannot be addressed through the tax system alone. Australia's total investment in R&D is now just 1.69% of GDP. Against an OECD average of 2.72%.

And the Australian Academy of Sciences has described recent measures in the budget as useful, whilst warning that they will not, on their own, reverse Australia's long-term research underinvestment. And at a time when artificial intelligence, biotechnology, clean energy, and other critical technologies are becoming central to our economic prosperity and national resilience, we cannot afford to allow Australians and their research capabilities, their talented people who sustain it, to fall behind.

So, while I support the direction of these particular changes, I encourage the Government to see them as part of a broader national task: lifting Australia's research ambition, retaining and attracting talented scientists, and ensuring that the technologies industries that will shape our future are not simply invented elsewhere and imported here.

Finally, this bill implements the Government's commitment earlier this year to phase out the fringe benefit tax exemption on EVs. And as I've said when they made this announcement, I think it's disappointing that in the middle of a fuel crisis, when every electric car on the road represents diesel and petrol that they don't have to import, that the Government should choose to roll this successful initiative back.

We absolutely need to be prudent with how government funds are invested, invested. But right now, I think is not the time to wind this back. I think it's good that they aren't removing it entirely. EV sales are taking off around the country, and we should still be doing everything we can in our power to electrify our transport systems as fast as we can whilst this fuel crisis continues.

These bills are far from good. They might, in some places, have good, meaningful intent or not, but I hope by the time it comes back to this place that many of the crossbench amendments that have been made are considered and adopted, those from Wentworth, from Curtin, and indeed from McKellar. Without these changes, this is going to be a bunch of bills that'll be tricky to support.