This statement was made by NFF’s CEO Mike Guerin at the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 public hearing on 5 November, 2026.
Thank you Chair, and thank you to the Committee for the opportunity to appear today.
The National Farmers’ Federation, as the peak body for Australian agriculture, strongly supports the Government’s decision to exempt primary production income from the proposed minimum tax on discretionary trusts.
Our key message to the Committee today is simple: that exemption must be retained.
Discretionary trusts have a legitimate and longstanding role in Australian agriculture. Farming businesses operate in an environment where their incomes can fluctuate significantly from year to year due to seasonal conditions, natural disasters and market conditions beyond a farmer’s control.
At the same time, many farms are complex, capital-intensive businesses that are built up over decades and transferred progressively from one generation to the next. Trusts provide important flexibility to support family ownership, succession planning, asset protection and long-term investment.
This is not a marginal issue for agriculture; there are around 37,000 discretionary trusts used across agriculture, fisheries and forestry, meaning that as many as one in two farm businesses may utilise this structure.
Importantly, these are overwhelmingly not large businesses. ATO data cited in our submission shows that in 2023–24, 99 per cent of discretionary trusts used by family farms were small or micro entities, or recorded nil income or a loss.
It is also important to be clear that this is an exemption for primary production income, not a blanket exemption for farmers. As farm businesses increasingly diversify into activities such as value-adding, agritourism, renewable energy, infrastructure arrangements and environmental markets, some of that income may remain subject to the proposed minimum tax.
That makes the practical implementation of these reforms very important. We want to see clear guidance, proportionate compliance requirements and workable arrangements for farms with mixed income or complex business structures.
But our principal request to the Committee is straightforward: protect the primary production income exemption contained in the Bills. Removing or narrowing it would create significant uncertainty for farming families making long-term decisions about their businesses and succession arrangements.
Thank you, Chair. We welcome the Committee’s questions.