NATIONAL Farmers Federation (NFF) economics officer, Charlie McElhone, and NFF president, Jock Laurie, attended this week’s tax forum at Parliament House in Canberra, guarding against the unlikely, but unwelcome return of death duties and the potential impost of a land tax on agricultural land.
The two-day forum was part of the agreement which swayed Independent MP, Rob Oakeshott, to side with Labor in putting the current minority government into power, after last year’s hung federal election.
It was attended by about 200 participants from the business world, key lobby groups, State Treasurers, senior government ministers and other Federal MPs.
In his address to delegates, Mr Oakeshott said he hoped the forum would pave the way to a 10-year road-map to tax reforms, while calling for the removal of ineffective State taxes.
Senior government officials defended criticism of the event being an elaborate talkfest by saying its findings would be used to guide further policy development.
One of the forum’s key points of reference was the Henry Tax Review – the nation’s most recent comprehensive taxation system analysis by former Treasury Secretary, Dr Ken Henry, released in May 2010, which put forward 138 various recommendations for tax reforms and simplifications.
Mr McElhone said Federal Treasurer, Wayne Swan, told the forum about 30 Henry Review recommendations had been addressed in some way or picked up on, since its release but others had not progressed anywhere.
He said the forum would assess the appetite for other reforms designed to make the federal tax system fairer and simpler, while maintaining the integrity of specific tax rules and functions.
In 1979, Australia abolished death duties – also known as inheritance tax – but in recent years the Australian Greens have indicated a desire to re-introduce the system as a means of taxing high income earners and re-distributing wealth.
The Henry review made no recommendations for the possible introduction of a tax on bequests, but did urge the government to promote further study and community discussion on available options.
Both Labor and the Coalition remain firmly opposed to death duties while Mr McElhone said NFF was “staunchly opposed” to them.
Mr Laurie said reinstating death duties would be the agricultural industry’s “death”.
He said anybody thinking or talking about re-introducing death duties would never be the ones having to pay them.
He said the duties would be a disincentive for future generations taking over the family farm, as the younger farmers would be forced to pay, in some cases, hundreds of thousands of dollars in taxes when transferring family assets from a deceased estate.
He said he also wanted to see farm management deposits maintained as an incentive to help farmers save money in good times to assist survival in tougher seasons, such as those who had been impacted by droughts or floods.
NFF also had a sharp focus at the forum on improving the zone taxation system, which provides tax incentives that encourage people to move to or live in outer rural areas.
Mr McElhone said the West Australian and Queensland Treasurers told the forum they believed the zone taxation system needed revisiting, to make it more relevant to the modern national economy.
He said they acknowledged the system was “grossly outdated” and delivered a significantly deteriorated outcome than when first developed.
Mr McElhone said NFF advocated changes that ensured zone taxation delivered on its policy intent on helping to overcome the inequities of living and working in regional Australia and the high cost of accessing essential services in those regions.
