The federal government’s proposed tax on unrealised gains in superannuation must be amended to instil fairness and avoid devastating unintended consequences for Australian farmers, Rhys Turton, GrainGrowers Chair said today.
Rhys Turton said a recent GrainGrowers survey exposed a range of issues that could disrupt agricultural production, erode generational stability and weaken rural economies.
Mr Turton said the issues were nationally focused, with one in three respondents holding agricultural land in superannuation and likely to be impacted by the proposed tax change.
Mr Turton said paying tax on the unrealised gain on agricultural land is both unfair and inequitable.
“The truth is that growers are often asset-rich but cash-poor. Under this proposal, drought-ravaged growers caught in this net and with no crop and no grain to deliver will have no option but to sell long-term productive assets to meet a tax bill on a fictional profit.”
“Selling in a forced market where buyers are scarce will drive down prices, disrupt livelihoods, lower long-term rural productivity and disrupt rural communities.”
Survey respondents have outlined serious concerns:
- Succession planning will be compromised, as a spouse’s death could push families over the tax threshold.
- No CPI indexation means younger farmers will inherit a flawed system, making long-term planning impossible and lowering the incentive for the next generation to contribute to super.
- The tax forces growers to pay for gains on land they have no intention of selling, losing economies of scale and resilience built up over many decades.
Mr Turton said it was alarming to receive feedback that the proposed tax would “impact succession planning and the ability to retire” or that another grower “would probably need to sell after 75 years of ownership”.
“We believe the government needs to sit down and discuss how changes can be made to ensure any future changes to superannuation do not unfairly impact growers,” Mr Turton said. “We believe we can work constructively on this issue for our growers.”
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