TAX reform in the wake of the Federal Budget was front and centre for the nation’s agricultural leaders at a meeting of the National Farmers’ Federation’s Members’ Council in Canberra this week.
Hamish McIntyre
Bringing together state farming organisations and commodity groups from across Australia, the Council passed a resolution calling on the Australian Government to safeguard farm businesses from unintended consequences arising from proposed changes to capital gains tax and their potential impact on intergenerational farm succession.
Concerns have been growing about the changes to the taxes on small business, particularly highlighting the thresholds that define small business as outdated.
Earlier this week, Nationals leader Matt Canavan told the Queensland Rural Press Club that the taxes will disproportionely impact family farmers, with large multi-national coporations potentially being able to escape the tax changes while family farmers with skinny margins were in the firing line.
Last month the Victorian Farmers Federation proposing three changes to the thresholds.
- Increasing the maximum net asset value test from $6 million to $20 million;
- Increasing the aggregated turnover test from $2 million to $5 million;
- Increasing the retirement exemption lifetime cap from $500,000 to $2 million.
NFF President Hamish McIntyre said while the Government’s decision to retain small business CGT concessions was important, more work was needed to ensure those settings remained fit for purpose.
“The current thresholds are badly outdated and no longer reflect the reality of family farming today, so our immediate focus is ensuring those settings are reviewed to protect farm succession and prevent unintended consequences for the next generation of farmers.
“Family farms often represent farmers’ life savings, carefully invested in over decades to support their retirement and to provide a succession pathway for their children to enter the sector.”
“We need to ensure changes to CGT don’t unintentionally compromise the future of Australian farmers – something that has been positively recognised through the primary production income exemption in the proposed tax on discretionary trusts.
“We welcome the constructive engagement we’ve had with Government so far and look forward to continuing this work to deliver practical solutions that allow the next generation of farmers take on the family business.”
Source: NFF
Hamish McIntyre needs to rethink his stance on capital gains tax on farming properties. Young farmers are increasingly locked out of having their own properties. The people buying farms are lawyers, politicians, medical professionals and the likes of Gina Rhinehart and Andrew Forrest. Farms should never be a tax mitigation tool for the rich. There needs to be much tighter limits on tax offsets, much more capital gains taxation on higher net worth individuals, trusts and companies. Farmers working the ground to build their own enterprise should be fairly treated and improvement capital expenses should be factored plus indexation.