‘Super Tax’ Poses Threat to Family Farms, Warns NFF

IAN ROGERS

Following the passage of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 through the House of Representatives, the National Farmers’ Federation (NFF) has once again sounded the alarm, warning Parliament of the potential devastating impact on thousands of family farms and small businesses across Australia.

NFF President David Jochinke expressed the sector’s ongoing concern, particularly over the taxation of ‘unrealised gains,’ which he says could force primary producers to sell their land just to meet the new tax obligations.

“The farming sector is particularly worried that taxing unrealised gains will compel farmers to sell off land assets to cover their new tax bill,” Jochinke said. “Many farms are held in self-managed superannuation funds (SMSFs) and are leased to the next generation, providing retirement income while allowing the family business to continue. This new tax could disrupt that balance.”

Farm assets often appreciate in value, but the income they generate remains modest. Under the proposed changes, Jochinke warned that farmers might face tax bills that take up a signifcant portion of their farm-derived income, leading to dire fnancial decisions.

“If the Bill proceeds unchanged, some farmers may be forced to sell their land, homes, or even borrow money just to pay this additional tax. Others might have to raise the rent they charge their own family members,” Jochinke explained.

“These are not wealthy individuals with massive superannuation accounts—they are hardworking Australians who have spent their lives building farms to pass on to their children and grandchildren.”

A broad coalition of industry groups has also voiced concerns about the Bill’s impact, particularly regarding the taxation of unrealised gains. In August, eleven leading fnancial organisations, including CPA Australia, Chartered Accountants Australia and New Zealand, and the SMSF Association, highlighted the risks for small businesses and primary producers holding assets in SMSFs. They warned that some business owners might be forced to sell their premises to meet their tax obligations.

A University of Adelaide study further estimated that if the tax had been introduced in the 2021 and 2022 fnancial years, over 13 per cent of impacted members would have faced liquidity stress in trying to meet the new tax requirements.

As the Bill moves to the Senate, Jochinke urged Senators, especially those on the crossbench, to heed the concerns of Australian farmers, small businesses, and fnancial experts.

“We’re calling on Senators to address the consequences of this Bill, which threatens the livelihoods of thousands of hardworking farmers and small business owners across the country,” Jochinke said.