Courier Mail – If the Prime Minister had guts, he’d call an election

On 29 May 1765, a 29-year-old member of the Virginia House of Burgesses, Patrick Henry, rose to move five resolutions (or resolves as they were called) which opposed the British Government’s plan to impose the Stamp Act on the American colonies. Henry’s argument against the tax was not about why the tax was introduced but how. The tax was being imposed by a Parliament in London that had no accountability to the people in the American colonies. Henry viewed this as a fundamental breach of the rights of British people. The Magna Carta (signed in 1215) said that no tax “is to be levied in our realm, except by the common counsel of our realm.” Like King George III, the Labor Party this week has tried to impose taxes on the Australian people with no consent. The Prime Minister ruled out increased taxes relating to negative gearing, trusts and capital gains tax before the last election just a year ago. The Labor Party has no mandate for these taxes. They are not just bad taxes for the economy, they are a fundamental breach of the rights of every Australian to be asked their views before having to pay more taxes to their rulers. They should be opposed in the Parliament for that reason alone. If the Prime Minister has changed his mind, as he has said, he should give the Australian people the right to change theirs. He should go to an election so that the Australian people can decide whether their representatives impose more taxation. In its tax grab, the Government announced that it would end the so-called Capital Gains Tax discount of 50 per cent on nominal gains and instead impose the tax on the full real capital gains after adjusting for inflation. But unlike the trust tax changes, Australian farming has not been made exempt from the capital gains tax changes. One of the marked characteristics of Australian farming as a business is that you don’t make much money from operations, but you can make a return thanks to the increase in the value of your land over time. According to ABARES data, the average broadacre farm made a rate of return on capital of just 0.6 per cent in 2023–24. But the story is different when looking at land values. Over the past decade, again according to ABARES data, the average broadacre farmer has seen the value of their land increase by 9.8 per cent per year on average. 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. Based on the historical returns to farming, Australian farmers face an increase in the capital gains tax rate from 23.5 per cent to 36.6 per cent. Labor’s broken promise on capital gains would be the biggest tax grab launched on Australian farming in history. Once you start taking risks — like our farmers do facing the weather, global markets and the like — the Government’s proposed new capital gains tax gets much more punishing. If not scrapped, the Government’s capital gains tax changes would be a hammer blow to many young farmers stressed about whether they can take on the debt, risk and frustration inherent in farming life. The Government has said that it would consult with the tech and start-up industries given their unique characteristics. Well, farmers face unique challenges too, and in terms of the impact of the Government’s capital gains tax broken promise, the impact on farmers would be very similar to the start-up industry. We oppose Labor’s taxes and will repeal them if we can’t defeat them in the Parliament. But 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.