TasFarmers Matters - Unrealised gains tax concerns grow

THE Federal Government’s plan to tax unrealised gains in superannuation, particularly targeting farmers, is likely to have far-reaching impacts and unintended consequences.

Unapologetically, the government has singled out farmers under the banner of “fairness,” while crafting provisions that exempt politicians and high-ranking state officials, such as governors and judges, who already benefit from generous defined benefit schemes paid for by taxpayers.

Public opinion has rightly turned against the government.

Concerns are growing that without proper indexation, this policy could gradually ensnare a broader range of taxpayers.

More worryingly, the precedent of taxing unrealised gains may evolve into a blunt instrument, not just in superannuation, but across the wider economy, as governments seek out increasingly convenient sources of revenue.

The question of impact then extends beyond the tax itself, what are the broader consequences?

If a tax liability is created on an unrealised gain, where does the responsibility for payment fall?

Will superannuation funds be expected to cover the tax from their reserves, or will the burden ultimately rest with the individual account holder?

If it is the beneficiary and they cannot access their super until after the age of 60, how exactly will the tax be paid in the meantime?

These are not abstract concerns; they go to the heart of how the system functions and who ultimately bears the cost.

And let’s not forget those without large or diversified portfolios, many of them everyday Australians, may be unintentionally caught up in this policy, bearing disproportionate risk without the means to mitigate.

We simply can’t say loud enough that farmers aren’t ATMs for governments to fix budget holes.

The tax then is not only an issue for farmers but poses a significant risk for superannuation funds.

The money for tax will need to come from somewhere, and how do you plan long-term investments if you need to liquidate assets to pay the bill and what if those investments or assets fail or don’t make any money? 

We must ask ourselves why start here on tax reforms targeting a specific group of Australians.

Targeting a small and easily overlooked group is concerning.

For the broader economy, we risk pulling the handbrake on productivity and growth.

Commercial investment in innovation, research, and development could slow or worse, capital may begin to shift offshore.

Strangely, the government remained silent on this policy during the recent election.

This silence does not provide the government with a policy mandate to implement change.

This policy lacks fairness, transparency, and a clear mandate.

It targets a small group, creates uncertainty for long-term investment, and risks broader unintended economic harm.