David Littleproud opinion: Tax attack on farmers shows Labor is clueless about the regions

Labor isn’t just deterring young farmers from coming back into the industry, but tearing up the livelihoods of many farmers across the country, writes David Littleproud

Labor’s plan for this term is a frightening one.

In a dangerous and desperate attack on the agriculture industry, Labor is now coming after the family farm.

The incompetent and ill thought-out policy will target any family farm that is held in a self-managed super fund (SMSF) and worth more than $3m, taxing an additional 15 per cent on the earnings of superannuation balances every single year for on-paper, unrealised gains.

It is a money grab that will have severe consequences for farmers and workers who provide Australia’s food and fibre every single day.

Many families have previously set up SMSFs as their retirement and savings, unaware Labor could come for their assets.

A NSW grain farm. Family farms like this could be hit by Labor’s tax.

Farmers who are caught up in this are going to try whatever they can to get themselves out of it. They have large capital assets, which is their working land, and want to pass it on to their kids so they can continue to farm through succession in their superannuation fund.

This vehicle has been used for some time to protect the family’s assets and to make sure that young people can come back to the family farm.

David Littleproud says taxing unrealised gains will hit farmers where it hurts.

But if there’s no crop and the rain stops, farmers will have no cash flow to pay the tax.

So despite a bad season, with no cash flow, Labor will still force farmers to pay a tax with money they don’t have. It means many farmers will not have the money to pay the tax bill and will have to sell their farm.

Labor has created this mess without clear lines. It will force farmers to get their farms valued every year. Some farmers are talking about getting out and transferring some of their property into other entities. That comes at a great cost.

Labor isn’t just deterring young farmers from coming back into the industry, but tearing up the livelihoods of many farmers across the country at a time when they can least afford it, with recent floods and drought across the country.

This is a government that’s out of touch and doesn’t understand the consequences of the policies that it is bringing through.

Small businesses will get caught up as well, because they might have their commercial property in a self-managed super fund.

Labor must walk away from this.

It is an enormous government overreach and a principle that we should always walk away from taxing unrealised capital gains.

A broadacre farm in northern NSW. Taxing unrealised gains could hurt our farmers.

The other problem is that taxing unrealised gains is a dangerous slippery slope.

What will come next? Will Labor open the floodgates for other parts of the economy, such as shares or personal property?

Labor thought it would be OK to tax farmers for on-paper gains during a cost-of-living crisis and while developing a food security strategy.

By doing so, Labor proved it has no understanding of farming.

Labor is also unable to say exactly how many primary producers and small and family business owners will be impacted.

The National Farmers’ Federation reports the Superannuation Fund Association estimates there are around 17,000 super accounts holding farmland, and of those, 3500 have land valued at more than the $3m threshold.

But if and when land values climb, tens of thousands of farmers are next.

This is an unfair tax that will capture more Australians over time, because it is not indexed.

The Nationals have and will continue to reject Labor’s plan to legislate an unindexed tax on unrealised capital gains in super.

Labor’s tax is abhorrent.

We will fight it and we will stand up for our farmers

David Littleproud MP is federal leader of the Nationals

Originally published as David Littleproud opinion: Tax attack on farmers shows Labor is clueless about the regions