Australian Dairy Secures Future as Government Axes Damaging Super Tax

The future looks brighter for Australian dairy farmers following the Federal Government's decision to abandon contentious superannuation tax proposals that targeted unrealised gains. The revisions bring relief to the dairy sector, allowing asset-heavy businesses to plan with greater clarity and assurance.

The initial plan had potential to wreak havoc on family farms by taxing unrealised gains and not adjusting taxation thresholds in line with inflation. These elements posed significant risks to successful business succession and sustainability within the industry.

ADF president Ben Bennett welcomed the decision, highlighting that farmers can now plan for the future "with confidence." Under the new tax framework, superannuation balances between $3 million and $10 million will see a 30% concessional tax, while those over $10 million will face 40%. Crucially, these thresholds will align with inflation, mitigating involuntary bracket creep due to asset inflation.

Such adjustments are vital given the asset-heavy nature of dairy farming, where much value is concentrated in non-liquid assets. The revisions ensure the continuity of family farms by supporting capital retention onsite, promoting secure regional employment and local milk supply.

However, while pleased with changes addressing the most disruptive aspects, the ADF pointed out that prevailing higher tax rates could still affect investment and succession planning. Nonetheless, the outcome reflects the strength of collective advocacy, underlining the necessity for the agricultural community to voice its needs effectively.