FEDERAL GOVERNMENT'S SUPER TAX - GETTING SUPER (BAD) SERIOUS FOR AUSTRALIAN FARMERS

By GPA Chair, Barry Large 

EVERYONE will have seen the headlines by now, warning about the looming perils and flaws contained in the Federal Government’s new ‘Super Tax’ on unrealised capital gains. 

And this new tax on self-managed superannuation funds is set to cause real harm and consequences for the nation’s family farmers, and future farm productivity. 

Grain Producers Australia is seriously concerned this new tax on unrealised gains will genuinely hit and harm many family farming businesses, in the broadacre cropping sector, with self-managed super-funds. 

For grain producers like me who’ve been busy seeding over the past couple of months in trying conditions, here’s the brief news-flash. 

The Federal Government’s proposed new rules aim to double taxation on superannuation balances above $3 million. 

This tax on unrealised capital gains has been met with fierce criticism by farmers and financial experts struggling to see the logic, or any moral clarify, as the details are unveiled. 

In a recent ACM article, Nationals' deputy leader Kevin Hogan said the new tax was "verging on the immoral" while pledging the Coalition agreed to continue opposing the proposal. HERE 

With this matter resurfacing during the Federal Election campaign, GPA highlighted the National Farmers’ Federation’s advocacy and a statement HERE issued after the ‘Super Tax’ legislation failed to pass the Federal Senate, in the last sitting week of 2024.  

NFF President David Jochinke said: “The farm sector is particularly worried that the taxation of ‘unrealised gains’ may force primary producers to sell their farm just to pay off their new tax bill.”  

Post election – this new tax threat has escalated again, igniting stronger resistance from farmers, as it edges towards a July 1 implementation deadline, if it passes parliament. 

In considering finer details, it’s important to understand the basic differences between super account holders with more than $3 million in assets, which includes food producing farmland – and other accounts which comprise different, but typical asset types. 

These new laws will force farmers to sell-off farmland just to raise cash in a hurry to try to pay tax on what’s really an estimated theoretical capital ‘gain’, on an intergenerational asset. 

Imagine being forced to sell this farmland during drought – when cash is extremely scarce, but farm bills still need to be paid, to maintain operations, never mind family income – just to pay government taxation on a theoretical gain for an asset your family doesn’t actually plan on selling? 

The threshold may be $3 million today, but who knows what it’ll be in future, or the tax rates? 

While this all seems quite complex and convoluted, there’s really a neat solution on offer. 

This class of asset – farmland owned by farmers who run intergenerational family businesses which ultimately produces food which helps to feed the nation, while supporting global food security – should be exempt. 

As they say, good policy is good politics – but hitting family farmers with this new ‘Super Tax’ on unrealised theoretical gains clearly isn’t good policy; especially in the middle of a drought.  

This ‘Super Tax’ proposal is set to be one of the first bills listed for debate, when Federal Parliament resumes again next month. 

That’s why GPA will soon host a special webinar, featuring financial experts with direct experience in self-managed superannuation funds, which include family farmland assets. 

This knowledge-sharing forum online provides an excellent opportunity for raising questions, to be answered by experts, relevant to the interests and needs of farmers. 

If this policy proposal is only just about taxing wealthy individuals, to try to make the superannuation system fairer and more equitable, the Treasurer and Federal Parliament must ensure the devil’s not lurking in the details.  

Otherwise, if they get it wrong, it only sets a dangerous precedent by taxing perceived wealth, rather than actual income, critics say – with farmers, food security and farm productivity nothing but collateral damage. 

Our elected lawmakers and policy-makers must guarantee this ‘Super Tax’ doesn’t cause any unintended consequences to family farmers – especially our grain producers – who produce food, affordably and sustainably, for the nation, while battling Mother Nature every day and the ever-increasing volatility of global markets. 

This volatility is not just grain pricing – but includes basic production costs and the farm input prices, which seem to be escalating by the day. 

This article was first published on Queensland Country Life, June 16 2025: HERE