The National Farmers’ Federation (NFF) is urging all parties and the crossbench to support the Federal Government’s decision to exempt primary production income from the proposed minimum tax on discretionary trusts.
NFF President Hamish McIntyre said the exemption, announced as part of the Government’s broader tax reform package in the May Federal Budget, was a careful and considered recognition of the unique nature of farming and the longstanding, legitimate use of trusts in Australian agriculture.
“Trusts are a core business structure used by thousands of family farms to manage risk, protect assets, support succession planning and invest for the long term,” Mr McIntyre said.
“ATO data shows there are more than 37,000 trusts operating in agriculture, fisheries and forestry. These structures are deeply embedded in the sector because they help farming families build resilience and plan for the future.”
Mr McIntyre said successive governments had long recognised primary production as a distinct category within Australia’s tax system.
“Farm businesses face income volatility unlike most other sectors. Farmers contend with drought, natural disasters, seasonal conditions and fluctuating commodity prices while often being asset-rich but cash-poor.”
“The Government recognised these realities when it announced the exemption as part of the original reform package, and Parliament should support that sensible and practical approach.”
Mr McIntyre said the NFF had made a clear case that reforms designed to address concerns elsewhere in the economy should not inadvertently undermine farm business resilience or make it harder to transfer family farms between generations.
“We strongly welcome the Government’s decision to legislate the exemption for primary production income, providing critical certainty for farming families.”
Mr McIntyre said the NFF would continue working with Treasury to ensure the reforms reflected the increasingly diverse nature of modern farm businesses.
“As farmers continue to build resilience through activities such as renewable energy, agritourism and environmental markets, it’s important these reforms are implemented in a way that minimises complexity, reduces compliance burden and provides certainty.
“As the peak body for Australian farmers, our focus is on ensuring these reforms reflect the realities of farming and continue to support the businesses that produce Australia’s food and fibre.”