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Coalition vows to scrap Labor capital gains tax changes, citing harm to farmers, generational farm transfers and agricultural productivity

Coalition pledges to scrap Labor’s capital gains tax changes, arguing they unfairly burden farmers, threaten generational farm transfers, and risk agricultural productivity and regional Australia’s economic stability.

By news@gippsland - 21st May 2026 - Back to News

A Coalition government will scrap Labor's capital gains tax changes to protect Australian farmers from a broken promises Budget. Leader of The Nationals Matt Canavan said a future Coalition government would immediately stop all of Labor's bad taxes, including changes made to the capital gains tax, which will also impact farmers who were not made exempt.

Farming leaders stress need for generational asset transfer, warning higher taxes could undermine family farms, threaten productivity, and risk national food production stability across Australia

Farm tax warning

Senator Canavan said, "Returns for Australian farmers are skewed towards capital gain, not income, and so any increase in the taxation of capital gains is going to hit Australian farmers the hardest. Given that Australian farmers make most of their returns via capital gains, Labor's broken promises Budget would be the biggest tax grab launched on Australian farming in history."

"It means Australian farmers would face one of the highest taxes in capital gains in the world, only beaten by Denmark and Chile. That's why a Coalition government will scrap all of Labor's planned taxes, including discretionary trusts, as well as capital gains tax, which will also impact farmers who were not made exempt, and negative gearing," he said.

Member for Mallee Dr Anne Webster said Labor's wasteful spending on things like net zero was not helping regional Australia and only adding to increased taxes. "A future Coalition government will dump net zero and stop Labor from ripping up prime agricultural land. We will also ensure Labor's changes to trusts and capital gain tax, as well as negative gearing, never see the light of day."

Tax change criticised

Knights Norfolk accountant Peter Knights described the capital gains tax changes to bring pre-1985 assets in as subject to CGT as 'underhanded'. "These assets were previously exempted for good reason, with many farm families suffering the impacts of the probate regime in the 1960s and 1970s on the same assets. CGT has a death tax effect as often beneficiaries receive assets when someone dies, invariably sell or transfer, triggering CGT, so the capital gains tax is without a doubt a death tax."

"With generational farms there has always been the need to maintain the working asset in the most productive hands, yet no proceeds are generated on transfer of land internally to pay any tax. We cannot see the return of similar circumstances to the disastrous effects that probate had on the farming business a generation ago," Mr Knights said.

Farm transfer concerns

Mr Knights also said, "Whilst small business CGT concessions remain unchanged in this Budget, the eligibility rules are also unchanged for 20 years and fast losing relevance and effect to ensure families stay farming. If nothing else these concessions need modernising."

"From a farming industry point of view, we have to make sure we can take assets through to the next generation, to those most capable of enterprising, leveraging assets and hard work, producing for the benefit of everyone else."

"When times are tough, traditionally, family farms still show up, but corporate farming must answer to shareholders. This is a productivity issue. If we increase tax barriers to transfer of farmland, it puts that business at risk and stability of food production at risk," he concluded.

Pictures from Agriculture Victoria Facebook page.

Source: http://gippsland.com/

Published by: news@gippsland.com

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