Sauer's sore point on super

THE Federal Government has defended its planned unrealised capital gains tax after TasFarmers CEO Ian Sauer said it was “ill-conceived and legalised theft”.

The proposed changes, which have been dubbed the “farm tax”, will see an additional 15 per cent tax on the earnings of superannuation balances above $3 million.

A spokesperson for Treasurer Jim Chalmers said the tax would not affect the majority of the population.

“This is a modest change that will 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 roughly 99.5 per cent of Australians with balances less than $3 million will keep receiving the same tax breaks.”

While Mr Sauer acknowledged that it would only affect a small percentage of farmers, he said he had concerns.

 “TasFarmers have made inquiries to accountancy firms and they have said they’ve got farmers on their books that it will affect as part of the generational change when they pass on land,” he said.

Mr Sauer said the farmers he had spoken to were feeling a “high degree of uncertainty” around the tax.

“The issue is that it’s not going to be indexed, so in another three years that $3 million might be worth $1.5 million in today’s terms. “The other thing is that farmers are asset-rich but cash-poor.”

The worry for Mr Sauer was that the tax would affect farmers more than the rest of the population.

“When you’re taxing unrealised gains it means you haven’t got them. It’s legalised theft – it’s nothing more and nothing less,” he said.

“The recipient of the super scheme has not got the cash because it is unrealised. So, how in God’s name can you tax that is beyond me. It’s grossly unfair and it’s a money grab.”

Mr Sauer said it was indicative of how Canberra treated rural populations.

“We’re five per cent of the community and we run, look after and manage the bulk of the Australian landscape.

“But at times, governments don’t give two hoots about farmers, and they just put another tax and another impost on us.”

Mr Sauer also said he had not seen an economist in Australia who had supported the policy.

“It’s ill-conceived and hasn’t been thought through,” he said.

“The other thing is that this was not discussed during the election campaign, so the government of the day does not have a mandate to bring this unrealised tax on superannuation into the arena.

“It’s incumbent upon them to now have a discussion with the business, industry and the rural community if they want to bring this in so that we can make sure that it’s fair, reasonable and equitable for everybody.”