When John was dying of bone marrow cancer, he did what any loving father would do. He made arrangements. He sorted his affairs. He set up a discretionary trust so that when he was gone, his teenage children Jacinta and Jason would have something to fall back on. A modest inheritance. A financial foundation. A final act of love from a man who knew he was running out of time.
John passed away in April 2024. He was 14 months in the ground before Jim Chalmers stood up on budget night and announced that discretionary testamentary trusts established after July 2028 would face a minimum 30 per cent tax rate.
John’s trust, set up before that date, now sits in a grey area that has left his family’s trustee, Rod Mitchell, scrambling for answers.
Rod is John’s brother-in-law. He and his wife took on the responsibility of managing the trust for the two kids after John died. He rang his accountant after budget night to check where things stood. The answer was not reassuring. John left behind $25,000 for his children. That is it. Not a property portfolio. Not a share empire. Twenty-five thousand dollars from a man who gave everything he had.
Under the new rules, if the trust grows at five per cent annually, $7,500 of that goes straight to the government. Nearly a third of everything John managed to leave his kids, gone to Canberra before Jacinta and Jason see a cent of it.
“What right do they have to take this money?” Rod asked during an emotional interview on 2GB’s Ben Fordham programme, his voice barely holding together. “It’s unfair and unjust.”
He is not wrong to be angry. These are not wealthy children. Jacinta is 16. Jason is 19. They lost their father to a rare and brutal disease, and a single mother is now raising them on a single income. The trust their father established was never going to make them rich. It was designed to give them a fighting chance. To help them get ahead in life without a dad around to help them do it.
And there is an added layer of cruelty here that makes the government’s indifference particularly hard to stomach. One of John’s children was born with complications from an seizure that resulted in brain damage. That child has additional needs and will require ongoing support throughout his life. John knew this. It was part of why he made the arrangements he did. He wanted to make sure his son was provided for after he was gone.
The Albanese government’s position is that vulnerable minors will be protected. But as estate lawyers and accountants have repeatedly pointed out since budget night, the details of exactly who qualifies for those exemptions remain frustratingly vague.
Rod’s accountant cannot give him a clear answer. He can only tell him that under what is currently known, the kids will be worse off, and that the added complexity of the new rules will also mean more time spent administering the trust, which means more professional fees, which means even less money reaching Jacinta and Jason.
It is worth pausing on that detail. The government’s new tax is so layered and ambiguous that it is generating additional costs simply through confusion. Families are not just losing money to the tax itself. They are losing money trying to understand it. Every hour Rod’s accountant spends interpreting half-written legislation is another bill that chips away at what little John left behind.
Rod put it plainly when asked what John would make of all this. “He’d be horrified,” he said. “He was a really caring, loving, besotted father for his kids. It’s cruel.”
That word keeps coming up. Cruel. Not from opposition politicians or tabloid columnists, but from ordinary Australians trying to make sense of what has been done to them without warning, without mandate, and without what most people would consider a basic level of decency.
This is a government that during the 2025 election campaign promised faithfully not to touch negative gearing or the capital gains tax discount. It broke that promise on budget night. It is now promising that vulnerable families will be protected under the new trust rules while simultaneously failing to clarify what that protection actually looks like in practice. Families like Rod’s are left to pay accountants to interpret legislation that has not even been written yet.
Jim Chalmers has called the opposition’s response a scare campaign. Anthony Albanese initially told reporters that testamentary trusts were not included in the reforms at all, before his office quietly clarified he had misspoken. These are not the words and actions of a government that has thought carefully about what it is doing to real people.
John earned his money. He paid tax on it throughout his working life. He saved what he could. And in the final months of his life, he made sure it would go to his children after he was gone. He did everything right. He scraped together $25,000 and put it somewhere safe so his kids would have a foundation to build from without him. The government has looked at that $25,000 and decided it deserves $7,500 of it. Nearly a third. From a dead man’s final gift to his grieving children.
Rod Mitchell’s parting message on air was directed straight at the Prime Minister and the Treasurer. He suggested they should have the courage to contact Jacinta and Jason personally and explain to two teenagers, one of whom has a brain injury and no father, why $7,500 of the $25,000 their dad left behind needs to be redirected to Canberra.
It is a reasonable ask. Do not hold your breath waiting for the call.
