Labor Senator Says Trusts Funds Give Tax Advantages to Super-Rich
Members of the Australian Labor Party have raised concerns that the country's super rich could be circumventing tax regulations through federal laws governing family trust funds.
Left-leaning Labor Senator Doug Cameron aired his questions Tuesday and sought clarification from the Treasury on how strong were the existing trust fund rules, solid enough for entities to be discouraged in using the services as tax havens.
It is likely, Mr Cameron charged, that many rich families in Australia were resorting to trust funds in order to dodge paying the appropriate tax duties.
From his understanding, trust funds appear to lure the rich who intends to sustain their wealth through generations without really contributing the right amount to the national coffers, the Labor senator said.
"'I understand trusts assist business to manage themselves ... but now we see these super-trusts being established to, in my view, shield businesses and super-high-wealth individuals from making a proper contribution to the country," Mr Cameron was reported by the Australian Associated Press (AAP) as saying during a Labor caucus.
"'I am asking the question: is the legislation that guides trust effective? And what is the cost to the public purse?"
To date, Mr Cameron noted that Australia counts some 400,000 existing trusts that hold an accumulated value of $200 billion.
Sadly, many of these funds offered advantages of lower tax charges while at the same time allowing rich individuals to transfer their vast holdings without too much concerns on their tax liabilities, Mr Cameron said.
In his rejoinder, Federal Treasurer Wayne Swan told the caucus that questions on the tax programs enjoyed by corporations and rich individuals must be coursed through the Australian Tax Office (ATO), the agency most competent to answer tax concerns, he added.
Mr Swan said amendments could be introduced by the Treasury but cautioned that changes must be wary on discarding attractive tax arrangements that serve as magnet for the rich to invest on such funds.
Trust funds gained attention lately as Gina Rinehart and her children, regarded as Australia's richest family, are locked in a legal dispute for control of the reported $5 billion trusts that the younger Rineharts were poised to gain control.