Canberra digs in on NFF's tax campaign

25 Nov, 1999 12:47 AM
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ANGER is mounting within the Federal Government over the National Farmers Federation's continuing opposition to key tax changes planned under the GST package and the Ralph business tax review. Sources within the Government claim the NFF campaign will benefit only Australia's wealthiest farmers and the peak farm body is rapidly wearing out its welcome in Parliament House. They argue the NFF has already had significant wins on tax reform and that almost every farmer in the country will be significantly better off under the new tax regime. National Party leader John Anderson last week distanced himself from the controversy but a spokesman said the nation's biggest farmers stood to lose at most a total of $20 million from the changes. This was more than balanced by a $1 billion gain to the farm sector as a whole < including the big end of town < from tax reform generally. "We're taking the NFF seriously but, overall, the farm sector does remarkably well out of tax reform," the spokesman said. The NFF is calling for the simplified tax system (STS) threshold < above which farmers will not be able to claim accelerated depreciation < to be raised from the proposed $1m turnover to either $2m turnover or $5m in assets. It is also contesting a proposal to tax family trusts as companies, an anti-tax avoidance measure the NFF says will put in jeopardy the intergenerational transfer of family farms. The NFF last week met with Treasurer Peter Costello and made progress on many of their 11 tax reform concerns but not on these two key points. Outspoken Queensland Liberal Party backbencher Ian Macfarlane last week warned the NFF to back off and said its store of goodwill with the Government was starting to evaporate. Mr Macfarlane, a former president of the Grains Council of Australia, said the NFF could not hope to win on the STS threshold or the taxation of trusts. He said the Government was growing impatient with the campaign, which was being driven by the peak farm body rather than by farmers themselves. "The NFF has done very well for itself and for its members but now they are wearing out their welcome," he said. "They're really using this issue now simply to maintain their profile and I guess we're getting sick of that. "They run the risk of running out of goodwill, not only with the Government but with the general community. "Around 95 to 97 per cent of farmers are without any equivocation going to be better off and the other 3-5pc most likely are going to be better off and I think that's as far as we can go. "My advice to the NFF is to accept that they've already had major wins with the tax issue and to continue to push the issues, particularly about the levels of turnover and the treatment of trusts, really has no future and won't get them anywhere." Mr Macfarlane said "in anyone's language" farmers with more than $1m in turnover were "the big end of town". He conceded that trusts would be less attractive under the tax changes but said they were still being treated fairly. "It's going to be very hard < in fact I'd say impossible < for the NFF to convince us that, in terms of any of the other changes they want for trusts, they are not just further tax minimisations," he said. "We've made some concessions on trusts and we're not going to make any more."

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