Farm owners have welcomed Treasurer Jim Chalmers' announcement of major changes to the government’s proposed superannuation tax, including the introduction of indexation and the scrapping of plans to tax unrealised capital gains.
The agriculture sector has been calling for the changes since the tax was first announced about two years ago.
The original proposal threatened more than 3,500 self-managed superannuation funds holding farmland across Australia from day one, with thousands more at risk as property values rose.
National Farmers’ Federation President David Jochinke declared the announcement "a monumental win for farmers, small business, and common sense". “From the beginning, we’ve said this policy of taxing unrealised gains risked family farm businesses," Mr Jochinke said. "The Government has listened, and we thank them for that. Farmers can now plan for the future with confidence, knowing their hard work and succession plans are safe from this unfair tax.”
VFF President Brett Hosking said it was a common-sense response to the sustained concerns raised by the agricultural sector over nearly two years. "So much unnecessary concern and worry could have been avoided if they consulted with the industry before wheeling this out," Mr Hosking said. "While some farmers will still face additional tax obligations under the revised policy, this is a vastly better outcome than the original proposal which would have set a hugely worrying precedent in our tax system.”
GrainGrowers Chair, Rhys Turton said modelling has found more than 3,500 self-managed super funds holding farming land would have been impacted from day one, with a further 14,000 at risk as property values increased. “Today’s decision was the right one," Mr Turton said. "We now look forward to continuing to work constructively with the Government on fair, practical policies that support long-term investment and succession planning for farmers.”
NSW Farmers President Xavier Martin said it was a huge relief for farming families who’ve been staring down the barrel of a tax that never should’ve applied to them in the first place. “Farmers plan long term, in decades, not financial years, and this decision gives them the confidence to keep building farm businesses they can succeed for the next generation," Mr Martin said.
Australian Dairy Farmers President, Ben Bennett said the outcome shows what can be achieved when agriculture stands together and sticks to the facts. "It’s a great result for farmers and small businesses right across the country," Mr Bennett said. “The Government’s willingness to listen and act means more certainty for family-owned farms to invest and plan for the future – that means to keep growing, keep employing and keep investing in their local communities.”
Australia’s largest accounting body, CPA Australia, also welcomed the changes, with Superannuation Lead Richard Webb saying the revisions followed months of campaigning from industry groups and stakeholders.
“Bracket creep already has a silent eroding effect on personal finances. Allowing further erosion of superannuation savings would have been contrary to the fundamental principles of our tax system," Mr Webb said.
CPA Australia is also relieved to see the government change course on its plan to tax unrealised capital gains as part of its reforms of superannuation. “This was a particularly egregious element of the government’s initial proposal,” Mr Webb said. “Providing certainty and financial stability for this and future generations of retirees is critical. Taxing unrealised gains would have distorted our tax system, which needs broader reform.”
Leader of The Nationals David Littleproud said he was relieved Labor had backflipped, but this policy should never have seen the light of day. “In what parallel universe does a Government think it’s okay to tax on-paper, unrealised gains? Labor should apologise to the farming community for the stress and uncertainty they have caused," Mr Littleproud said.