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Taxation

The NFF supports a simpler, fairer and more efficient tax system that encourages investment, innovation and productivity growth in the Australian agricultural sector.

Issue

To be productive and profitable, and to capture the value of the opportunities before the sector, agriculture needs a tax system that encourages innovation, mitigates risks and facilitates intergenerational change by lowering the barriers to entry for new farmers and supply chain businesses.

Key challenges for Australian agriculture include an ageing workforce, drought and strong international competition and we need a taxation system that encourages preparation for and management of these challenges and promotes on-farm innovation.

Background

Australian agriculture is an income generating sector, contributing to community wellbeing without receiving major support from public funds. This renders it unique in the global marketplace, having to compete with produce from competitor nations that has been highly subsidised.

To address this distortion, and the particular challenges faced by primary producers, the Australian tax system provides the agricultural sector with mechanisms such as income averaging, capital expenditure deductions, and Farm Management Deposits (FMD).

However, taxation in Australia is complex: Taxes are raised on both a state and a federal level. Consequently, coordinated cross-jurisdictional action is needed to harmonise the taxation of all farmers across the country and ensure the future viability of farming in Australia. 

What the industry needs

To increase the profitability of Australian agriculture, the NFF would suggest the following measures:

  • Encourage the construction of new means of transport for agricultural goods through developing innovative tax provisions that attract both private and foreign investment. 
  • Simplify intergenerational change by reevaluating state-level stamp duty on the transfer of land and by providing Capital Gains Tax concessions when smaller properties are consolidated. 
  • Boost investment in the latest farming technology by extending the accelerated depreciation provision to encompass more expensive energy saving assets such as solar energy panels. 
  • Facilitate the retirement of farmers that have the majority of their wealth tied up in their agribusiness by lifting limitations of transferring property sales proceeds into superannuation. 
  • Amend the payroll tax to specific needs of farmers to encourage the employment of more staff.

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