The National Farmers' Federation has reiterated calls for primary production assets to be carved out from Labor's plans to double the tax rate on superannuation accounts valued at more than $3 million.
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The organisation has long claimed that the changes, a new 'division 296 tax liability' that will double the tax rate charged from 15 per cent to 30pc on any earnings over the $3m threshold, could threaten the viability of family farms the length and breadth of Australia.
The changes, first flagged in February 2023, would target not just superannuation savings, but the unrealised valuation gains on property and shares held by superannuation trusts.
NFF acting chief executive Charlie Thomas on Tuesday urged all Senate crossbenchers to consider the potential collateral damage of the proposed taxation changes on regional Australia when the bill reaches the upper house.
"We are pleased to see reports today that Senate crossbenchers David Pocock and Jacqui Lambie have raised concerns about the proposed legislation, and we are calling on others to do the same," he said.
In rural Australia superannuation assets often include a primary producer's farmland, or premises which small business owners operate in, which are rented by the farmer or business operator.
Stakeholders have previously raised fears that the changes could trigger a rapid exodus from rural and commercial property markets of owners with asset-heavy superannuation investments accruing annual tax bills they cannot afford to pay.
Mr Thomas said "critical amendments" were needed to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, which flies in the face of a Labor pre-election promise not to tinker with super taxes, to shield farmers.
He said the impacts would be particularly felt by farming operations where older farmers hold farm assets in a self-managed super fund and lease them to their children, "providing retirement income while giving the next generation an opportunity to start farming".
"We are extremely worried that the proposed increases in taxation rates, including the treatment of 'unrealised gains' on holdings, will increase the tax obligation so much that farmers may be forced to sell land assets to pay the tax bill," he said.
"This may leave farmers with a terrible choice: sell the farm to meet these new tax and liquidity obligations or increase their lease rates so much that their own children and grandchildren can't afford it and leave the industry."
The government majority will see the bill pass the lower house in coming days, despite some Teal independents raising concerns, and move into the Senate where its merits will be debated later in the year.
However, Labor could face a challenge to drive the legislation through that house with Senator Pauline Hanson and Senator Ralph Babet having also already raised concerns, while the Greens want the threshold dropped to just $2m.
Mr Thomas said the government had consistently said the bill was aimed at "the top end of town", making "countless references" to people with hundreds of millions of dollars in their super accounts as the target of the reforms.
"If that truly is the case, the Government should have no issue supporting amendments that ensure this legislation does not impact farming families," he said.
Earnings below the $3m threshold will stay at the 15pc rate.
The NFF also pointed to a recent Senate inquiry where the Self-Managed Super Fund Association estimated that over 17,000 superannuation accounts in 2021/22 held farming land and that more than 3,500 of those would impacted by the government's proposed changes.
