The National Farmers’ Federation (NFF) reiterates its concerns regarding the Australian Government’s increased tax on Australian farms through superannuation.
The proposed tax increase on superannuation balances continues to raise alarm bells within the agricultural sector given the far-reaching consequences for farm businesses and rural communities.
The NFF underscores the importance of a comprehensive assessment of the legislation’s implications on farming families, and calls for substantive consultations with farmers before legislating the measure.
“The proposed legislation, released yesterday, has failed to allay farmers’ apprehensions about the planned tax adjustments and their potential impact on agricultural operations,” NFF Chief Executive Tony Mahar said.
“While recognising the Government’s efforts to address fiscal challenges, the NFF remains steadfast in its belief the legislation’s potential repercussions on farmers’ livelihoods and agricultural investments must not be disregarded for a quick budget win.”
The NFF’s concerns are rooted in the unique nature of farming enterprises, where land assets often serve as the primary form of retirement savings.
“Unlike regular salaried employees, many farmers do not make consistent superannuation contributions,” Mr Mahar said.
“Instead, they consider their land holdings as their primary retirement nest egg. This practice is paramount in succession planning, where land assets are frequently transferred into self-managed superannuation funds (SMSFs) to facilitate retirement income for retiring farmers.”
“The taxation of unrealised gains poses a genuine challenge for farmers, many of whom may find it difficult to meet the annual tax obligations without selling their land assets. This new tax could significantly impact a farmer’s yearly retirement earnings, potentially exceeding them.”
The NFF’s biggest concern is the absence of indexation provisions for the $3 million threshold in the proposed legislation. This fixed threshold could progressively encompass more farming assets over time, exacerbating the hardships faced by farming families across the country.
Moreover, the lack of clarity and specific implementation guidelines within the legislation further compounds the uncertainty for farmers planning to transfer their businesses to the next generation.
The NFF remains committed to collaborating with the Government to ensure the concerns Australia’s farming community have about these proposed changes are appropriately addressed.