THE National Farmers’ Federation (NFF) has quizzed Opposition leader Bill Shorten’s potential changes to trust arrangements and impacts on agriculture, given their widespread use.
Mr Shorten was questioned about his tax reform intentions if elected to government in future, when speaking to ABC television on Sunday
“I'm going to check our detail and the devil is always in the detail, but watch this space - very soon we're going to make further tax reform announcements,” he said.
“But what I'm also prepared to say here is that we as a party are doing the hard work to try and create one tax system for all.”
Mr Shorten said it wasn’t traditional practice for an opposition to put its policies out so far ahead of an election - but when pressed about his taxation plans and for family trusts that are used to minimise taxes, he left the question open-ended.
He said trusts, as a legal protection were “sound - but I've made it very clear that I do have a principle which says that we should have one tax system for all”.
“We're not going to announce our policies on this very, very good show,” he said.
“What I want to do is do what Australians want from both sides of politics…what is it that we're going to do for them.”
As speculation has continued, NFF CEO Tony Mahar told Fairfax Agriculture Media the farming community and his peak lobby group was “pretty concerned” about any changes to trust arrangements for farmers, as part of any future ALP taxation policy.
Mr Mahar said it was still about 18 months away from the next federal election but NFF was maintaining a watch on any potential changes or shifts in party policies.
“We were a bit concerned when we heard about the approaches from the ALP around reviewing trusts and any shift in the use of or availability of trusts in the agriculture sector, which would be a huge concern to the farming community,” he said.
“We know the agriculture sector and farm businesses are large users of trusts due to issues around volatility of income and family succession planning, with multiple members of family partnerships and businesses.
“So when someone says they’re going to look at the process, people will be a little bit interested in what that means and at the moment we don’t really know what that means.
“But we know many farmers and people in the agricultural industry have interest in trusts or use trusts, as part of their businesses.
“The whole issue of trusts needs to be understood, and why farmers in particular use them, who are not necessarily multi-million dollar businessmen, if that’s what the ALP is looking at.”
Mr Mahar said farm businesses used trusts for various reasons like family succession planning or to disperse income through family partnerships and arrangements and to bring multiple properties or enterprises together under the one business.
“The NFF and agriculture community were quite interested in what the ALP has planned and we don’t know what that is but we’d like to talk to them about their plans,” he said.
“We’ll be doing so pretty swiftly to ensure Joel Fitzgibbon, as the opposition agriculture spokesperson, understands how the agriculture sector and farm businesses use trusts and ensure any measures that are in place, are safeguarded.
“We’ll be asking Joel to ensure he understands the implications of any changes to trust arrangements for agriculture and what impact that may have because trusts are an integral part of the farming community and that’s why we were very interested in the news and finding out more about what the ALP has in mind.
“It will be a pretty imminent conversation.”
Mr Fitzgibbon was unavailable for comment.
But Shadow Finance Minister Jim Chalmers said discussion about trusts over the last week or so, including a very good contribution from The Australia Institute, had pointed out that not many people have called for the abolition of trusts.
Mr Chalmers said trusts were a legal entity used by about 800,000 Australians and their use had been growing in an “extraordinary fashion” in recent years.
“What people are saying is that we should consider and look at the tax arrangements for trusts so that the tax arrangements are as fair as possible,” he said.
“So the tax concessions aren't going to people who need them the least.
“That's not saying that trusts should be abolished - it's saying that there might be ways for governments to consider and oppositions to consider, to make the tax arrangements more fair.”
Sources have also said the ALP isn’t intending picking a fight with farmers or small businesses with any changes it may make to the tax system.
Treasurer Scott Morrison said there was already a Trusts Taskforce within the Australian Tax Office that had been “cracking down on misuse of trusts where people are gaming the system”.
“Protecting the integrity of the trust system is very important so of course you’ve got to act on that,” he said.
He said trusts were used widely by small businesses, rural small family businesses and farmers but the ALP was “coming after” small businesses’ trusts and after farmers’ trusts”.
“I mean, this is a guy for whom too much tax is never enough - the bottom line with Bill Shorten is more tax,” he said.