Senate Rural and Regional Affairs and Transport Legislation Committee, , 2:33:41 to 2:38:35
Inquiry into proposed tax changes for discretionary trusts, the lack of direct farmer consultation, and engagement with Treasury on implementation.
Topics: Government spending, National Farmers Federation
Speakers: Chris Toyne, Hon Matthew Canavan, Matt Lowe, Unknown Speaker
wanted to ask some questions about the uh uh changes to the taxation of trusts uh data from the NFF shows that one in three well first of all there's 37,663 agricultural trusts that report some uh sorry agricultural trusts and one in three of those report some level of uh non- primary production income. Uh by the looks of it about 20% of their net business income comes from non- primary production sources. uh my understanding is that that income that non-prong production income would be subject now to this minimum 30% tax. Has the department done any consultation with farmers or farm groups about the impact of these tax changes?
>> Um we haven't um I think specifically consulted with the with farmers or the sector in relation to those tax changes as um we discussed in previous estimates. Senator, ultimately taxation is the responsibility of Treasury and they have been consulting um broadly on the changes to the tax system in partic and in particular in relation to discretionary trusts which I think is what your question is concerned with. Um so I think that's the question you're putting to me.
>> So we don't know or you don't know what proportion of the 37,000 odd farmers with trusts uh will will face higher taxes.
>> Um I don't think we do have that information, but I'll just um defer to my colleagues to see if they've got anything to add. Senator,
>> uh no, that's right. Um Chris Toy, acting first assistant secretary farm resilience division. Um so the application of the tax changes including the changes to the discretionary tax uh trust taxation of discretionary trusts uh will depend on the individual circumstances of each farm each farm business. Um so it's a bit hard to make generalizations across the sector or or or indeed for farm businesses.
>> Right. Um back at the budget estimates uh uh you you you mentioned that the treasury was not consulted. Sorry, the the Treasury did not consult your department before the budget. Uh since the budget, have you met with Treasury about the implementation of uh these changes for agricultural businesses?
>> Yes, Senator, we've been um closely engaged with Treasury um on a number of the matters that pertain to the taxation system um and including discretionary
>> and this was regards to the development of an exposure draft and >> and subsequent legislation. It would
have been I think it would have been one of the areas there where we would have engaged with them on. Yes.
>> Right. Okay. How many times did you meet with Treasury >> uh to discuss these issues?
>> Um I'll um defer to colleagues to see if
we've got >> So look over the period of time since the uh the budget um we've engaged with Treasury in a number of emails, meetings, conversations, that sort of thing. I haven't got an exact number of the amount of times uh but if you like I can go into the sort of uh the matters that were raised with treasury and I guess the angle that we were taking or the approach you were taking with the
>> right and well maybe on your turkus how many times and what dates you met >> um so you've done the consultation with treasury about the bill but you haven't consulted with farmers or farm groups
>> uh so we have regular discussions with uh groups including national farmers federation. Um so we were certainly aware of the discussions they were having with the Treasury Department um after the the budget announcement. Um and and I guess one of the areas uh that they were one of the things that we were particularly interested in was the the impact of the application of the uh the tax changes to farm businesses and how that would impact on their eligibility and their ability to access existing farm support measures. Um so we were looking at it particularly from the aspect of um how farmers reaction to the farm changes may impact eligibility for like uh farm management deposit scheme for example. >> Um and we were aware that uh that the national farmers federation were advocating for a partial rollover um exemption from the uh the discretionary tax changes and that's something that that was one of the issues that we were raising with Treasury as well. We did our own sort of analysis about what impacts that might have and we fed that to treasury as part of their considerations.