VFF president Brett Hosking said the announcement represented a common-sense response to the sustained concerns raised by the agricultural sector over nearly two years.
“It’s a common-sense outcome for a tax that never should have existed in its original form in the first place,” Mr Hosking said.
“So much unnecessary concern and worry could have been avoided if they consulted with the industry before wheeling this out.
“Victorian farmers are breathing a sigh of relief.
They faced the very real prospect of being forced to sell their land to pay tax bills on paper gains they had never actually realised.
“The government’s decision to tax only realised earnings, rather than unrealised capital gains, addresses the fundamental flaw in the original proposal that would have created impossible liquidity pressures for farming families.”
Mr Hosking said the decision to index the $3 million threshold was equally important, preventing bracket creep from progressively capturing more family farms over time as land values naturally increased.
The original proposal threatened over 3500 self-managed superannuation funds holding farmland across Australia from day one, with thousands more at risk as property values rose.
GrainGrowers has welcomed the announcement from Federal Treasurer Jim Chalmers that the Government will no longer pursue the taxation of unrealised gains in superannuation accounts, following sustained sectoral feedback and evidence of disproportionate impact on farming communities.
GrainGrowers chair Rhys Turton said the decision reflected a constructive shift in policy thinking after sustained advocacy from GrainGrowers, the NFF and other rural organisations.
Mr Turton said he was pleased the government had listened and acted to address a serious policy blind spot.
Earlier this year, industry representative body Australian Dairy Farmers brought to light the industry’s concerns around taxing unrealised gains and failing to index taxation thresholds.
ADF president Ben Bennett said the original proposal to tax unrealised gains put family farm businesses at risk.
“Farmers can now plan for the future with confidence, knowing their hard work and succession plans are safe from this unfair proposed taxation,” Mr Bennett said.
Leader of the Nationals David Littleproud said farmers have had an enormous win, after Labor retreated on its poorly conceived, reckless and cruel plan to tax unrealised gains on farms held in self-managed super funds.
Mr Littleproud said Labor had been embarrassingly forced to give in, after the Nationals and industry campaigned against the terrible plan and Labor faced a backlash across regional Australia.
“Labor’s plan to punish Australia’s hardest workers and attack their unrealised gains in superannuation was shocking from the start and never should have happened,” Mr Littleproud said.
The changes
Treasurer Jim Chalmers unveiled multiple changes to plans to tax large superannuation balances.
What is proposed?
- The federal government unveiled plans in 2023 to increase the tax rate for superannuation balances above $3 million from 15 per cent to 30 per cent from July 2025.
- Plans were also in place to tax unrealised capital gains.
- The treasurer on indicated it would make significant changes to the super tax measures due to opposition from the coalition and Greens as well as from business groups and economists
What has changed?
- The threshold of a 30 per cent tax on super above $3 million will remain in place.
- A second threshold of 40 per cent tax will apply to super balances above $10 million.
- Both thresholds will be increased in line with inflation over time in order to address concerns over bracket creep.
- The changes will come into effect from July 2026, subject to the laws passing federal parliament.
- The changes will no longer apply to unrealised capital gains.
- The low-income superannuation tax offset will be increased by $310 to $810, with the eligibility threshold rising from $37,000 to $45,000.
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