ADDRESS TO PARLIAMENT - BILLS - Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, Superannuation Imposition Bill 2023 - Second Reading
As the member for Hinkler has just pointed out in very explicit detail, this tax on unrealised gains is, when it comes to farming property, just nonsense, and anybody with half a modicum of intelligence, financial know-how or acumen would appreciate just that.
Before the May 2022 election, Labor promised, wrongly, that there would be no changes to superannuation, there would be no touching of superannuation—that was promised. But, as we know, everything that Labor says is not the same as what Labor does after it gets elected. It's the same with the $275 power bill cuts; it's the same with this legislation before the House today. I'm surprised that Labor's not just going to ram it through!
Mr Pitt: No, you're not!
Mr McCORMACK: Why would they uphold the principles of democracy and allow us to talk about it, member for Hinkler? It's a good question, and I ask the House. We saw, just a few sordid moments ago, that Labor pushed through the new fuel efficiency standards without allowing members to speak on that debate. We saw last year that Labor rushed through, pushed through, the appropriations bills, the budget bills of all legislation, without allowing every member of parliament, who's elected to this place—the people's house—by the people, to speak on that bill. Of course, just in the last sitting week of the Senate, the national digital identity bill was pushed through without allowing debate, and many coalition senators wanted to speak on that particular bill but were not permitted. This is, unfortunately, the Labor way.
This goes to the far greater concern we have for people particularly, as even the member for Menzies noted, in regional Australia. This is not only a betrayal of what Labor said it wasn't going to do—and that is touch super—but a fundamentally flawed policy. It unfairly disadvantages farmers and young people into the future. Labor's proposed changes are such that they are going to look at the overall value of a farm and tax that farmer on an unrealised asset when, as the member for Hinkler pointed out, they may then have to sell the property, or part thereof, to pay the tax bill for an asset from which they're gaining their money and underpins their livelihood. How can people have the confidence necessary to make investments into their retirement when Labor backflips on its promises and pledges?
I'm particularly concerned about how the proposed changes are going to affect farmers and young workers, and many, many people share that concern, including, I have to say, the National Farmers Federation. They, in a press release on 14 May 2024—so that's this week—sounded the alarm on the superannuation tax impost. That was the heading on the media release. They are already under the pump, and I note with great concern that Tony Mahar, the chief executive, was one of those who walked out of the post-budget speech by the agriculture minister, Senator Murray Watt, when he began talking about the WA sheep farmers who are going to have their trade phased out. The NFF are right on that, and they're right on this issue too. As the NFF points out:
Evidence from financial and tax experts in a Senate Economics Committee Inquiry shows the agricultural sector will be unfairly hit with the changes that could even see families having to sell farms.
This is what I said a few moments ago. Why is there this constant attack on farmers?
I noted—and I am digressing a little bit—in the budget papers that there was no disclosure as to how much the Labor government will spend on water buybacks. Our irrigation farmers are nervous about that; our irrigation communities are very worried about that. We've got the WA sheep farmers being paid $107 million over four years to phase out what they do for a living, which is put food on the tables of Middle Eastern countries, in the sense of live sheep exports. Here we have farmers being slugged with an unnecessary tax on an unrealised asset—that is, the property, the land, the soil and the dirt from which they earn their income. This is just nuts! This is just crazy! Why? How? How can this possibly be?
As the NFF points out, the Senate Economics Legislation Committee inquiry's report on the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023—the bill we're discussing—was released late on Friday, ahead of the legislation now being debated. I'm amazed it is being debated, but anyway; I move on. Tony Mahar said this:
Concerningly the final report does not appear to address the issues raised by the NFF about the potential impact the reform may have on small business and family farms … These reforms could be like a sledgehammer to succession planning for family farms.
A sledgehammer to succession planning! I remember the late Bill Thompson, of Coolamon, and the work that he did in the Riverina in relation to succession planning. It's something that is so very important. But how on earth is an accountant—even a good accountant, like Mr Thompson was—and others who are doing work in this space supposed to know how much a farm is worth if Labor is going to tax the unrealised asset? This is like stealing something that hasn't even been sold, though it's probably going to have to be sold because of this legislation. Why is Labor so against our farmers? Why is Labor continuing this attack on regional Australia? Why is Labor bringing, as Tony Mahar says, a sledgehammer to the people who provide the food and fibre? And it's not just here in Australia; now we're stopping those who want to sell sheep overseas. I don't get it. It absolutely beggars belief.
Labor brought down a budget the other night. It was a potential re-election budget—a bit of a cash splash here, a bit of a cash splash there—but our regional communities won't be hoodwinked by this. They will not be fooled by Labor bringing down a sledgehammer on their operations, on their activities. As Tony Mahar says:
In many cases, older farmers will hold their farm in an SMSF—
a self-managed super fund—
and lease it to their children, providing both retirement income for them while giving the next generation an opportunity to start farming.
We are extremely worried the proposed taxation of 'unrealised gains' on holdings will increase the tax obligation so much, farmers will be forced to sell land assets to pay the tax bill.
Given high land values and modest cash income generated from farming, this new tax when will represent a significant proportion of a farmers' annual retirement income, or even exceed it.
This may see the farmers left with a terrible choice. Sell the farm to meet these new tax obligations or increase their lease rates so much that their own children and grandchildren can't afford it and leave the industry.
Is this what Labor wants? Is this what Labor desires? Is this some sort of subversive way that Labor wants to force farmers off the land? It makes you wonder; it truly does. Tony Mahar goes on to say 'This is a lose-lose situation and undoubtedly not what the wider community would expect these reforms intended to deliver.'
Our farmers are the backbone of the economy. People may disagree with that. They may say that some other industry or asset is, but I don't know any other industry or sector which grows the food to put on our tables, three times a day, every day—and we should thank farmers every time we tuck our knees under the dinner table. They also provide the fibre for the clothes on our backs. That's what they do. But they are not being treated fairly by this Labor government, which never cares about farmers, never worries about their concerns and has absolutely no idea as to the toils and turmoils and troubles that farmers go through to grow that food and fibre. In any given decade, farmers will have three good seasons, three average seasons and three terrible seasons, and the other one—well, take your pick. That's farming. It's a tough occupation. And our thanks go to those farmers, who do their best to prop up and feed everyone—even those opposite, and they should remember that.
This bill seeks to implement a broken promise to change the tax arrangements on superannuation. That's what it is doing, and that's what it represents. It's a shame that it even has to come before the parliament, given the fact that Labor said, prior to the May 2022 election, that it would not touch super; it said it would not touch it, but indeed it has.
The NFF is against it, and there are so many other people who are against it. Young workers aren't going to escape this Labor cash grab, either. The proposed $3 million threshold isn't indexed to inflation. Who knows what inflation will be over the next 30 or 40 years? We might ask the member for Rankin, the Treasurer. He seems to know. He seems to push the Reserve Bank of Australia in one direction and comes out and says what the inflation rate will be—locks himself into that. Good luck with that; I'll be watching that with great interest, and I'm sure RBA governor Michele Bullock will, too, as well as many other economists who panned the budget—many I would almost say Left-leaning economists who panned the budget; they saw through it.
Regional Australians see through this legislation. If this wasn't simply a cash grab by Labor, the government would do the right thing, the honest thing, and index the threshold to inflation. But they just won't. The coalition is not supporting this. Why would we? Why would we support yet another tax? Why would we support yet another cash grab? Why would we support something that is going to hurt our farmers such that they may have to sell part or all of their land simply to pay the unrealised gain, the tax that Labor is going to impose on them?
Accountants around the country will be scratching their heads and wondering how this is even possible. Labor's broken promise on superannuation is, as I say, a broken promise, but also it comes at a time when cost-of-living pressures are making it so hard, particularly for those people in regional Australia, who have to drive further. They've just had another tax imposed on them with the fuel efficiency standards. They won't be able to drive the cars that they can afford. They won't be able to pay for the ute or pay for the SUV. And it's is not just farmers; it's families—mums taking kids to school, dads taking kids to sport and all that. And our tradies are going to be hurt by the legislation that was rammed through earlier today.
This legislation that Labor is proposing will double super taxes for one in 10 Australians by the time they retire—double. It'll stop companies from offering franking credits to Australian investors, super funds and charities—those volunteer organisations that do so much good for so many Australians. As I said, it will tax unrealised capital gains in superannuation, meaning that Australian retirees will pay tax on money that they haven't even made yet. What nonsense! Who came up with this idea? What brainiac decided this would be a good idea? It was obviously somebody who had never set foot on a farm, somebody who has never sat around with farmers and talked about how they're going to manage: 'It hasn't rained for five years, but you're going to have to pay an unrealised gain, because your property is actually now worth more than it was last year. But there's a tax coming your way.'
The farmer would ask, 'How am I going to pay for that?' And the farmer would be told, 'Well, that's your choice: sell off a portion, sell of a paddock of your farm.' But the brainiacs in the bureaucracy don't care; they don't worry. They'll still go down to their coffee shop and they'll still go down to their tapas bar and they'll still go and eat the food that has been provided by an Australian farmer, while at the same time coming up with dumb legislation and giving it to the likes of the member for Rankin, who brings it into this place to get passed.
It's simply not fair, it's simply not right—but unfortunately it is the Labor way. That's what Labor stands for. It stands for broken promises. It stands for taxes. This should be absolutely rejected every point of the way.