Agmates Editor Steve Truman writes:
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Steve Truman
It has just emerged that the Rudd Labor governments silent ‘jihad’ against Australia’s food and fibre producers knows no bounds.
Agriculture Minister Tony Burke must have scored maximum brownie points with Prime Minister Rudd by sacrificing 32% of his departments funding ($908 million) in the budget as a means of clawing back some of the Rudd / Swan induced sea of deficit and debt.
Whilst those unprecedented cuts in funding to the department and Agricultural research are a ‘kick in the guts’ for Agriculture there is worse in store for Australian farmers.
Buried in the budget papers is a tax change that will fundamentally strike directly at the viability of 1,000′s of family farming operations.
Farming families whose land is owned by a family company and who operate their business through a partnership or trust using the company’s land will most definitely be caught up in the changes , unless the business, or farmer, starts paying rent to use the company’s farmland.
Many farming family companies were set up years ago as a means of minimising the blow of death duties.
But business lawyers Jim Main and Brendan Cockerill, from JMA Legal, say the changes are a “tax bombshell” for many Australian farmers.
There are tens of thousands of family farmers who have had their businesses structured in this way on advice from accountants and business advisers. The budget changes mean that these farmers will be burdened with enormous annual tax payment increases, even though they have earnt not one cent more of income.
Under the new changes, soon to come into effect, if a family has a farm valued at $1.5m with a market rental value of, say, four per cent of its sale value, the operating entity (or farm business managers) will have $60,000 a year added to their assessable income, or deducted from their carried-forward losses.
If the farmer wanted to solve the problem by paying rent then, based on the example above, the company would still pay $18,000 tax regardless of business profits or losses.
Agriculture Minister Tony Burke has scored many more Brownie points with his Prime Minister Kevin Rudd. Not only has he gutted his own Agricultural department to cut costs, he has also served up farmers to the grasp of the tax office to raise more revenue for his cash strapped government.
Minister Burke 18 month reign as Ag minister can be viewed as nothing more than a ‘Jihad’ on Australia’s Food and Fibre producers. No doubt this has put him in good stead for a much more prestigious portfolio as one of Kevin Rudds golden haired boys.
Tony Burke’s unrelenting attack on Australian Farmers is unprecedented in modern Labor governments. Certainly farmers fared much better under both the Hawke and Keating governments.
Its almost as if we are back to the class wars that existed between Labor and the Farming community in the first half of the 20th century. Producer group the Australian Beef Association call for Minister Tony Burke’s removal yesterday is entirely appropriate.
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