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Coalition vows scrapping Labor capital gains tax changes threatening farmers and agricultural investment

The Coalition says it will repeal Labor’s capital gains tax changes, claiming they would unfairly target Australian farmers, discourage agricultural investment, and place added financial pressure on young farmers and regional communities.

By news@gippsland - 20th 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. Speaking at the Rural Press Club in Brisbane today, 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.

Matt Canavan said Labor’s tax changes penalise farmers for taking risks and unfairly target capital gains, promising the Coalition would repeal the measures.

Matt Canavan said Labor’s tax changes penalise farmers for taking risks and unfairly target capital gains, promising the Coalition would repeal the measures

Farmers tax hit

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."

Based on the Labor government's secret modelling, the capital gains tax rate is 36.6 percent. This means Australian farmers would face one of the highest taxes in capital gains in the world, only beaten by Denmark and Chile.

"The government's own analysis shows that their tax changes punish risk-taking. This means it punishes all farmers, because farming is a high-risk, high-reward investment, with the business typically making their returns through capital gains. Now Labor, without warning, has just taken a massive extra slice of these returns. It is wrong and we will ensure it never sees the light of day under a Coalition government," Senator Canavan said.

Young farmers warned

According to ABARES data, the average broadacre farm made a rate of return on capital of just 0.6 per cent in 2023-24. However, the average broadacre farm has increased by 9.8 per cent per year, on average, over the past decade.

Shadow Minister for Agriculture Darren Chester said if not scrapped, the government's capital gains tax changes would also be a hammer blow to many young farmers stressed about whether they can take on the debt, as well as the risk and frustration inherent in farming life. "Our farmers might suffer low annual returns but can keep going through a drought, knowing that their land value will probably increase."

"If the government is going to consult the start-up industry on its tax changes, it should consult with Australian farmers as well, who are equally affected. In regional Australia we grow great food, we grow great fibre and we grow great kids. But they need to see a future for them in our world-class agricultural sector, and not a future filled with higher Labor taxes," Mr Chester said.

Pictures from Agriculture Victoria Facebook page.


Source: http://gippsland.com/

Published by: news@gippsland.com



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