Super tax ‘the last straw’ for this cattle farmer

Cattle farmer Craig Huf says Labor’s proposed super tax will likely be the ‘straw that breaks the camel’s back’ forcing him to pull his $3m farm out of his self-managed super fund.

Craig Huf, a farmer from Burringbar in far north NSW, will pull one of his farms out of super because of the tax on unrealised capital gains

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Cattle farmer Craig Huf says the federal government’s proposed superannuation tax will likely be the “straw that breaks the camel’s back” forcing him to pull his $3m farm out of his self-managed super fund.

Mr Huf, who runs several properties on both sides of the NSW/Queensland border, says the tax on unrealised capital gains is an “atrocious” proposal that will work against farmers’ efforts to scale up and establish succession plans for the next generation.

Like so many farmers, the 61-year-old “bought the farm next door” to add to his main property at Burringbar about a decade ago, parking it in his super fund. It’s the only one of his farms in the SMSF but he’s poised to cash it in if Jim Chalmers’ tax is passed and he faces a bill for unrealised profits.

Huf, who is an executive councillor of NSW Farmers, was among about 250 farmers from across the state who gathered in Sydney on Wednesday to vent their anger about the Albanese government’s planned tax.

The annual conference of the organisation called on the NSW government to waive stamp duty for farmers forced to pull farms from their SMSFs. The exemption would apply in cases where land was transferred to existing beneficiaries of the fund. The conference was told the exemption plan was “not perfect” but was an attempt to “mitigate the damage” from the proposed super tax.

Mr Huf, whose properties total about 1500 hectares, says the super tax is an “atrocious” proposal.

“Scale is really crucial for profitability with farming, and we’re also trying to make a way for the next generation to come through with the farming operation,” he told The Australian. “If we’re going to get taxed on the unrealised gains, that’s going to be very counter-productive.

“There’s been a real push against people owning self-managed funds in recent years and we were already questioning the viability of it because of the costs of compliance and the hoops we’ve got to jump through every year compared to when we (put it into the fund) quite a few years ago.”

Mr Huf said that he would not have the cashflow to meet tax on unrealised gains on the property which was now worth about $3m. “I think (the tax) is atrocious,” he said. “No other advanced economy in the world taxes unrealised gains. It’s a precedent and it’s frightening that we’re even considering it.”

The NSW Farmers’ treasurer, Peter Wilson, who farms at Trangie, near Dubbo, said an exemption from paying stamp duty would help farmers forced to pull farms out of their SMSFs.

He said farmers had put land into funds and had worked within the law, but now “you’re going to be penalised heavily by leaving your farm in the super fund”.

NSW and some other states already exempted farmers from stamp duty when land was transferred to the next generation in a family, and farmers now sought a similar waiver for transfers out of SMSFs.

Mr Wilson said farmers were angry about the proposal. “At the end of last year we thought we’d managed to get the legislation stalled in the Senate, and it went off the boil,” he said.

“The government didn’t say much about it at all prior to the election, despite what Mr Albanese and the Treasurer now say. There was barely a murmur of it before the election but since they got this thumping majority it’s being treated as a revenue raiser.”