Opposition and ag sector slam new supertax as ‘direct attack’ on farmers

WA Liberal Senator Slade Brockman has fired shots at a controversial superannuation tax, which he has condemned as a “direct attack” on farmers and small businesses. The Division 296 tax is a part of the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, which passed through the Lower House in October. Under the amendment, anyone with more than $3 million in their superannuation fund will have to pay capital gains tax of 15 per cent if their property goes up in value. Senator Brockman criticised the proposed tax in Parliament on November 19, slamming it as a “terrible, broken policy” which would leave farmers having to sell assets to pay off taxes on unrealised capital. “The disgrace of this is the taxation on unrealised capital gains, where you are forcing people to sell assets to pay tax on land that they hold or offices that they hold inside super funds,” he said. If passed, the new tax will apply from July 1, 2025 and will cover super fund returns applicable for the 2025-2026 tax year. “The farmers, the small-business people, are going to have to reach into their own pockets to pay Labor’s new tax on super,” Senator Brockman said. “It is a broken promise, it is a disgraceful policy and it should never see the light of day.” The recent criticism comes after Agriculture and Small Business Minister Julie Collins knocked back concerns that the proposed changes would lead to people having to sell their family farms to pay unrealised capital gains tax. Nationals leader David Littleproud grilled Ms Collins on the proposed tax changes during question time the day before Mr Brockman’s own comments. He asked Ms Collins if farmers who have their properties in a self-managed superannuation fund would have to pay tax on unrealised capitals gains on said properties, and if the tax would be payable when there is a failed season with no income. In response, Ms Collins said all superannuation funds, including self-managed funds, were required to have sufficient liquidity. “That’s already a principle and requirement of our current superannuation system,” she said. “Under existing superannuation laws, funds are required to have some liquid assets to meet any existing and prospective liabilities, cashflow requirements and expected tax concessions and consequences of their investments. “Individuals can choose how they pay their tax, either out of their superannuation account or from their own pocket.” National Farmers’ Federation deputy CEO Charlie Thomas lambasted the response and said the Bill would leave farmers “in a terrible situation” by forcing them to sell their assets “out from under the next generation”. “What the Minister explained in question time … is that this may happen sooner than we think – with self-managed funds needing to hold liquid assets to meet theoretical future tax liabilities,” he said. “That means farmers might be faced with the choice: sell now, or breach liquidity requirements. “This whole idea of taxing farmers for fluctuations in the property market is an absurd precedent which has no place in our tax system.”