Cries for a super tax rethink (26 Aug 2024)
Article summary: The farm lobby, alongside Independent MPs and financial experts, is voicing strong opposition to the Labor government's proposed superannuation tax changes. The controversial "better targeted super" Bill aims to tax unrealised earnings from investments over $3 million in self-managed superannuation funds (SMSFs). The proposed legislation has sparked criticism for targeting "paper profits" — asset value increases that are not realised as actual income. Key opponents, including teal MPs like Kate Chaney, Allegra Spender, and Kylea Tink, have formed a bloc against the bill, arguing that it unfairly impacts small businesses, start-ups, farmers, and SMSF members.
Critics highlight that family farms held within super funds could face double the current tax rate, even if the assets produce little rental income. The new tax rate of 30% on unrealised gains could force business owners to sell assets or face insolvency due to the inability to pay tax on income not yet realised. The National Farmers Federation (NFF) and the Council of Small Business Organisations Australia argue that the proposed tax rules threaten succession planning and business sustainability.
Independent MPs have proposed amendments to mitigate the bill's impact, including deferring tax payments and indexing the $3 million threshold. Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones are engaging with crossbench MPs to address these concerns. Despite the government’s claim that the bill targets high-net-worth individuals, critics argue it could adversely affect family-run businesses and farms, pushing them towards asset sales and jeopardising generational business transfers. The NFF, along with small business advocates, urges the government to revise the bill to prevent undue hardship while still achieving its revenue goals.
