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7NEWS
37 minutes ago
- 7NEWS
Australian farmers desperate for answers over unrealised capital gains tax as Jim Chalmers works to overhaul super
Should you be required to pay tax on money that you haven't earned yet? That's the question being asked around a new tax brought in as part of the federal government's changes to superannuation. Treasurer Jim Chalmers is looking to overhaul the way super is taxed, changing concessions for super balances over $3 million. But the sticking point for farmers and farming families is the new tax on unrealised capital gains. This new tax will mean if an asset held in super goes up in value, the account holder will be required to pay tax on that increase. With the threshold for this change set at $3 million, it is being sold as a 'rich people tax' but that doesn't show the whole picture. Jack Neilson, a cattle farmer from western Queensland, said the new tax was going to hurt hard-working Australians — 'especially in agriculture'. 'Jim Chalmers needs to realise he's not just catching the yacht-owning yuppies with this $3 million rich people tax that they are trying to sell it as,' Neilson said. Neilson pointed to the difficulties in getting young people into agriculture, calling it a 'minefield'. 'What a lot of farming families do is that, mum and dad, the operators put the actual property into a self-managed super fund,' he said. 'That way it is then leased to the next generation so that the next generation gets going and starts their farming careers, essentially, and mum and dad still make, a little bit of an income.' Nationals Leader David Littleproud told farmers were doing what they could to keep their property in their family. 'Farmers' properties are their superannuation,' he said. 'And that's why when self-managed super funds came in, many farming families put their properties into these self-managed super funds, because that was a way — a vehicle — for them to be able to bring the next generation through.' The unpredictable nature of income as a farmer has raised questions about the practicality of paying tax on unrealised gains as an increase in the value of the land doesn't directly point to an increase in income for a farmer. Katie Nash, a farmer and rural advocate, has also questioned the policy. 'If the land value goes up but the income stays the same, how are they supposed to pay the tax without selling the farm?' she said. 'How are they supposed to survive that?' However not everyone is sympathetic to the situation. Graeme Samuel AC, a professor at Monash University's Business School in Melbourne, said putting property into super wasn't about inheritance — but tax avoidance. 'For those that are caught with unrealised gains, what I'd say is question number one: how did you get into this position in the first place? Why did you put these assets into a super fund? And be honest about it, don't give us the myth that it's all about providing for the next generation, because that's what family discretionary trusts are designed to do,' he said. The National Farmers' Federation estimates around 3,500 farmers will be directly impacted by the new tax. And they maintain that where income is made, tax should be paid. But when the gains are unrealised, they argue the tax just doesn't seem fair or justified. President of the National Farmers Federation David Jochinke said the law was going to force families to sell up. 'It just baffles me why we're even talking about something where we haven't got either the capacity to pay, or it's going to force family farms to have to sell an asset that not only the parents require for their retirement,' he said. 'It also takes away from that family farming unit, which we all know needs to stick together — especially in tough times — to survive.' Jochinke wants the government to reconsider the legislation. 'The principle of having to pay a tax on an uncystallised asset is completely wrong and what we consider un-Australian,' he said. 'Let's actually have a talk about how we can manage superannuation when the assets crystallise, when farmers have got the cash to pay. And that's what we're just calling for. Let's make this a common sense piece of legislation, not a ridiculous one.' Sarah Tulloch, a farmer from NSW who has seen first-hand the impact of the pressures farmers, said she was worried about adding another pressure on the industry. 'They will lose a lot more than just their properties. There's farmers committing suicide daily just with what they've got going on at the moment with droughts and floods,' she said. 'To add this extra pressure, for people who are already doing it tough ... yeah, it's just not going to have good consequences.' Treasurer Jim Chalmers has repeatedly said he is committed to an overhaul on super taxation, saying it will make a meaningful difference in funding other priorities. reached out to the federal government in response to the concerns from farmers and farming families. 'We listen respectfully to the NFF and farmers but this is a modest change, introduced in a methodical way, that won't affect the vast majority of Australians,' a spokesperson said. 'Our changes only apply to about half a per cent of people with more than $3 million in super, who will still get generous tax concessions, just slightly less generous ones. The changes are all about making our superannuation system fairer and more sustainable.'
The Star
2 hours ago
- The Star
Economists doubt Trump outlook that US will sell 'so much' beef to Australia
WASHINGTON/CANBERRA/CHICAGO: President Donald Trump said the US will sell "so much" beef to Australia after Canberra relaxed import restrictions on Thursday(July 24), but economists and traders said high prices and tight supplies make major American exports unlikely. Australia said it would loosen biosecurity rules for US beef. The move will not significantly increase US shipments, though, because Australia is a major beef producer and exporter whose prices are much lower, analysts said. US companies export small quantities of beef to Australian buyers. They import much more in the form of lean beef used to make hamburgers, particularly as US production has declined because of tight cattle supplies. US beef prices set records this year after ranchers slashed their herds due to drought that burned up pasturelands used for grazing. The total herd size fell to 94.2 million head as of July 1, a record low for that date, according to US Department of Agriculture data on Friday. A ban on cattle imports from Mexico because of New World screwworm, a devastating livestock pest, and steep tariffs on Brazilian beef that are set to take effect on Aug. 1 could further tighten meat supplies, and require additional imports of Australian beef. "We can't get enough beef in the US right now, so we're bringing it in from Australia and Brazil," said Dan Norcini, an independent US livestock trader. "We're not going to be selling anything significant to anyone." Last year, Australia shipped almost 400,000 metric tonnes of beef worth US$2.9 billion to the United States, with just 269 tonnes of US product moving the other way. "They have more cattle than people," said David Anderson, an agricultural economist at Texas A&M University. "That's why they export so much." US and Australian beef also taste different. Many Australians like the grass-fed beef raised there, not marbled beef from US-raised cattle that are generally fed with grain, said Jerry Klassen, chief analyst for Resilient Capital in Winnipeg. He predicted the United States will not export substantial amounts of beef to Australia in the next five years. "We just aren't in a position to export much beef to anyone, and the reality is Australia doesn't really have much need for US beef," said Karl Setzer, partner at Consus Ag. The barriers that remain to exporting significant volumes of US beef to Australia appeared to be lost on Trump this week. "We are going to sell so much to Australia because this is undeniable and irrefutable Proof that US Beef is the Safest and Best in the entire World," Trump said in a post on Truth Social. "The other Countries that refuse our magnificent Beef are ON NOTICE." Trump has attempted to renegotiate trade deals with numerous countries he says have taken advantage of the United States, a characterisation many economists dispute. "For decades, Australia imposed unjustified barriers on US beef," US Trade Representative Jamieson Greer said in a statement, calling Australia's decision a "major milestone in lowering trade barriers and securing market access for US farmers and ranchers." Australian officials say the relaxation of restrictions was not part of any trade negotiations but the result of a years-long assessment of US biosecurity practices. Canberra has restricted US beef imports since 2003 due to concerns about bovine spongiform encephalopathy, or mad cow disease. Since 2019, it has allowed in meat from animals born, raised and slaughtered in the US but few suppliers were able to prove that their cattle had not been in Canada and Mexico. The US sources some of its feeder cattle from the two neighbouring countries. On Wednesday, Australia's agriculture ministry said US cattle traceability and control systems had improved enough that Australia could accept beef from cattle born in Canada or Mexico and slaughtered in the United States. The decision has caused some concern in Australia, where biosecurity is seen as essential to prevent diseases and pests from ravaging the farm sector. "We need to know if (the government) is sacrificing our high biosecurity standards just so Prime Minister Anthony Albanese can obtain a meeting with US President Donald Trump," shadow agriculture minister David Littleproud said in a statement. Australia faces a 10 per cent across-the-board US tariff, as well 50 per cent tariffs on steel and aluminium. Trump has also threatened to impose a 200 per cent tariff on pharmaceuticals. Asked whether the change would help achieve a trade deal, Australian Trade Minister Don Farrell said: "I'm not too sure." "We haven't done this in order to entice the Americans into a trade agreement," he said. "We think that they should do that anyway." - Reuters
Perth Now
3 hours ago
- Perth Now
‘Good to go': Why now is the best time for Aussies to lodge tax returns
With the average Aussie tax refund sitting at around $1,177 ING's Matt Bowen shares his top tips on how to make sure you don't waste a penny. Patient taxpayers with simple affairs have been given the thumbs up to lodge their returns after more than 90 million pieces of information was pre-filled into Australian myGov accounts. Four weeks into the new financial year, the Australian Taxation Office (ATO) said 'it's time to lodge'. WATCH THE VIDEO ABOVE: How to make the most of your tax refund. 'You've been patiently waiting, but now you're good to go,' Assistant Commissioner Rob Thomson said. 'Whether you lodge using a registered tax agent or lodge yourself through myTax, pre-fill information will now be available.' Thomson said taxpayers should check that pre-populated information from employers, banks, government agencies and private health insurers is accurate. They then need to work out what is missing and calculate any deductions they are entitled to. 'Don't forget that you need to include all sources of income in your tax return,' Thomson said. 'This includes side-hustles, linked income from providing ride sourcing services or selling services via an app. 'Remember, the ATO has 40 industry and occupation specific guides to assist you in what you can claim and what records are required to prove it.' Assistant Commissioner Rob Thomson said that the ATO had completed pre-fill of over 91 million pieces of information available for individual tax returns from employers, banks, government agencies and private health insurers. Credit: Australian Taxation Office Australians can file their tax returns from July 1, but experts suggest not getting twisted up in that date. That is because you want to make sure your document is complete and accurate before you hit the lodge button, to avoid a follow-up call from the ATO. CPA Australia tax lead Jenny Wong said it is not uncommon for early lodgers to have to amend their returns later, so holding fire can save you in the long run. 'Cost-of-living pressures could mean some people are eager to lodge their tax return as quickly as possible to access a refund, but it's important to be patient, gather your evidence and claim everything you are entitled to,' Wong said. 'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot.' Deductions must be related to purchases made before June 30 if you intend to claim them in this tax return. What you can claim will depend on what you do for work. The ATO and accountants know the difference. 'It is important that taxpayers take reasonable care when lodging, as penalties may apply where people have not taken reasonable care and increase when they are reckless or intentionally provide false information,' Thomson said. More than $2.2 billion in penalties were dished out to taxpayers who failed to comply with their obligations in 2023-2024. October 31 is the deadline for Australians lodging their return themselves. For those using the services of a registered tax agent, you have more time — until May the following year. But make sure you have reached out to them and have the ball rolling before the start of November. If you fail to lodge in time, the ATO may impose penalties, starting with a $330 fine. 'We will consider your circumstances when deciding what action to take,' Thomson said. 'It is important that taxpayers take reasonable care when lodging as penalties may apply where people have not taken reasonable care and increase when they are reckless or intentionally provide false information. 'Our preferred approach is to work with taxpayers to help them meet their tax obligations.' Most refunds are issued within two weeks, but the process can take longer if the ATO has queries. 'This process cannot be sped up, even if you call us,' Thomson said. 'You can keep track of your return by logging into the ATO app or ATO online services through myGov. Paper tax returns can take up to 50 days to process. Wong said there is a misconception that lodging your return straight away puts you at the front of the queue for a refund, 'but it's not that simple'. 'Take your time, get your facts right, and lodge a full and comprehensive claim when you're ready,' she said.
