Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Gallagher. Farming families are frequently cash poor, but they make a living off farmland whose value has tripled on paper over recent years, value that will remain unrealised potentially for decades for intergenerational farming operations. Will farmers that hold such land in self-managed super funds be forced to pay tens of thousands more in taxes under Labor's doubling of the super tax due do nothing more than paper fluctuations in commercial property prices?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

I thank Senator McKenzie for the question. As senators in this place would know, under prudential requirements all superannuation funds are required to consider diversification in liquidity when making investments, and, if funds are doing this, they should have some liquid assets to meet any tax liabilities. There are a range of cashflow requirements within an SMSF, not just tax liabilities, which trustees must consider. These include, for example, accounting administration costs, investment fees and the costs associated with maintaining real assets, such as property. For SMSFs with balances in the retirement phase, liquidity is also required for the purpose of meeting pension payments, including on those minimum drawdown requirements. Individuals can also hold their assets in super and elect to pay the tax or any tax liabilities they have by using savings outside of superannuation to avoid paying from their business assets.

So, we have been clear on what this change is about. It is for those with high-balance accounts—over $3 million. We know there are accounts with hundreds of millions of dollars in them. Superannuation is primarily about having a dignified retirement and being able to have savings available to you during your retirement years. What we are doing is making a very modest change to the concessional arrangements that remain concessional for those with balances over $3 million. As to individual superannuation advice, I'm not in a position to give it, but I have made clear—

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

A point of order on relevance: for the last 10 seconds left in the minister's ability to answer, the question was, due to the change made, will farmers now be subject to tens of thousands of dollars of additional tax as a result of unrealised gains?

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator McKenzie. The minister is being relevant. Minister.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Well, as I've said, I'm not here to give individual tax advice on arrangements I have no knowledge of. I have set out the government's policy. I have already— (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie, a first supplementary question?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

Can the minister advise of the number of registered primary producers that will be impacted through the government's proposed superannuation changes? And—given her first answer—if not, why not?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

There are around 80,000 account holders who will be impacted by this very modest change—

Well, thank you, Senator Scarr! You are the most patronising of all senators in this place, honestly. Your interjections are pathetic; they're pathetic. You can't help yourself.

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

A point of order on relevance: how many primary producers will be impacted by the government's policy?

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie, you do not need to repeat the question. The minister is being relevant. Please continue, Minister.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

Thank you, and if there is further information I can provide, Senator McKenzie, I will undertake to do so. But the change affects around 80,000 account holders. A number of them will be in SMSF arrangements, and another subset of them will have farms as part of their assets. So, I will undertake to come back to you, but the whole group that is affected is in the order of 80,000.

Sue Lines (President) Share this | Link to this | Hansard source

Senator McKenzie, a second supplementary question?

Bridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | Link to this | Hansard source

The National Farmers' Federation has been critical about the complete lack of consultation from the Labor government on the superannuation changes. Why didn't the government consult before announcing changes that will result in an unfair new tax on the family farm?

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

LAGHER (—) (): As we made clear in the announcement last week, announcing it ahead of the budget but foreshadowing that it will be in the budget allows for a period of further consultations. That will be happening. Treasury will be undertaking a public consultation process on the implementation details. And we are open to stakeholders' views, whether through the NFF or through others, around any refinements or any unintended consequences of these changes. That is the purpose of the consultation period.

I would also say to those who are opposing this change: this is a very modest change to raise a very small amount of revenue. We have a $50 billion structural deficit in the budget, left by you. That's every single year. This raises about $2 billion— (Time expired)