David Littleproud

CONCERNS have been raised about the Federal Government’s proposed changes to superannuation concessions after the agriculture minister insinuated that unrealised capital gains on farms will attract a tax bill, even in years of failed seasons.

Leader of The Nationals David Littleproud asked Labor’s agriculture minister

 about the cyclical nature of cashflows of farming and how it would impact farms held in a self managed super funds.

Minister Collins said the reforms to superannuation funds of more then $3m would mean SMSFs were required to have the liquidity to meet tax requirments.

“Individuals can choose how they pay their tax Mr Speaker, either out of their superannuation account or from their own pocket,” she said.

“It is similar to other parts of the superannuation system.”

Mr Littleproud said Labor’s new tax would hurt Australian farmers during a cost-of-living crisis and take money away from regional, rural and remote Australia.

He said any increases in asset value to a family farm or business held in a SMSF with a diverse portfolio worth more than $3 million, meeting liquidity requirements, would be taxed at the 30 per cent threshold rate every financial year.

“Minister Collins demonstrated today that she and the Albanese Government have no understanding of the vagaries of farmers’ cash loss that are impacted by not just weather but commodity prices,” he said.

“But Labor now wants to tax them year after year – simply by using an on-paper gain. It is deceitful and it goes to show, when Labor runs out of money, they always come after yours.”

Mr Littleproud said many families had previously set up SMSFs as their future retirement and savings, unaware Labor could come for their assets. He said Labor is also unable to say how many primary producers, small and family business owners will be impacted.

“Labor is misleading regional, rural and remote Australia, breaking its promise that it wouldn’t touch superannuation before the election. Not only are they now coming for your superannuation, they are coming for the increased value of assets in a SMSF.”

NFF and small business council oppose comments

In a joint press release put out by the National Farmers’ Federation and Small Business Organisations’ Australia, NFF deputy CEO Charlie Thomas said the comments underscored the sector’s concerns about the bill.

“The farm sector has consistently flagged that this bill will leave farmers in a terrible situation where they may have to sell their assets out from under the next generation,” Mr Thomas said.

“What the Minister explained in question time today is that this may happen sooner than we think – with self-managed funds needing to hold liquid assets to meet theoretical future tax liabilities. That means farmers might be faced with the choice: sell now, or breach liquidity requirements.

“This whole idea of taxing farmers for fluctuations in the property market is an absurd precedent which has no place in our tax system.”

While the question was related to farming families, Council of Small Business Associations of Australia CEO Luke Achterstraat said these same issued apply to small and family business owners.

“What we saw today by the Minister for Small Business sends an alarming signal not just to farming families but to Australian small business owners.

“This new tax on the unrealised gains on assets held in the SMSF may see an increased obligation that represents a significant proportion of an owner’s annual income, or even exceed it.

“This may see a farmers left in a terrible situation where they may have to sell their assets to meet this new tax obligation or increase lease rates to their children so much that their own children’s business may become unviable.

“The Government has consistently said this Bill targets the top end of town, people with hundreds of millions of dollars in their super accounts – not hard-working, family-run small businesses. What we saw from the Minister today shows that is simply not true.”