Small Business Owner Pleads With Prime Minister Over Proposed Trust Tax

A small business owner has penned an emotional open letter to Prime Minister Anthony Albanese, detailing the financial struggles her family business faces and expressing concern over a proposed tax on discretionary trusts.

Aurora Klimowicz, who co-owns Angel Sussurri Restaurant and Manor House with her family on the NSW Central Coast, described the increasing operational costs in a letter addressed to the Prime Minister. The business employs 19 local people and has operated for nine years, navigating challenges including fires, floods, and the COVID-19 pandemic. Klimowicz stated that her family works over 70 hours a week to keep the business afloat.

According to Klimowicz, recent cost increases include a 34% rise in wages, a 26% increase in superannuation contributions, a more than doubling of workers' compensation insurance, and a 38% increase in government fees and licenses. Water costs have risen 102%, and restaurant food costs are up 40% while food sales increased by only 18%. Additionally, the business can no longer pass on card fees.

"We have absorbed almost all of it," Klimowicz wrote. "We've held our prices because we know how hard things are for everyone, and we want people to come and enjoy themselves without worrying about the bill."

She explained that the proposed 30% minimum tax on the income of family trusts, slated to take effect from July 1, 2028, would further impact her ability to reinvest and maintain employment. "After nine years of fighting just to stay afloat, this tax means that whenever we do get ahead, there will be less left to rebuild, reinvest and keep our team employed."

Klimowicz urged fellow small business owners to lobby their senators to prevent the bill from passing, stating, "Because when small businesses close, our towns lose so much more than a shop."

The government announced the plan to impose a 30% minimum tax on trust distributions and capital gains in the May federal budget. Treasurer Jim Chalmers argued that the measure would prevent wealthy Australians from using legal structures to subvert the tax system, thereby reducing the burden on workers. The proposal includes carve-outs for certain trust types, including fixed trusts, charitable trusts, special disability trusts, and superannuation funds, as well as protections for primary production income and income related to vulnerable minors.

When initially announced, the tax was projected to raise $44.9 billion over nine years. The government has not yet released an updated revenue estimate following the unveiling of draft legislation. Comments from social media users expressed support for Klimowicz's position and criticism of the current government's policies.