Tax changes must deliver efficiency and growth

By Peter Wilson, Chair, Business, Economics and Trade Committee

Australian agriculture is positioned for growth and is expected to be one of the key future growth pillars of the Australian economy.

Indeed, NSW DPI’s recently released strategic plan aims to facilitate a 30 percent increase in the value of NSW primary industries by 2020. Given this, both government and industry should regard the current national taxation reform as an opportunity to design taxation policy that will create the architecture for agriculture to deliver on its substantial growth prospects.

NSW Farmers believes that any taxation reform should improve the fairness, efficiency and simplicity of the overall tax system. It should balance tax efficiency (in terms of the burden that it places on individuals and the economy) with fairness across asset and income classes. It must ensure that government has a consistent and manageable long term revenue stream without increasing the overall tax take as a percent of the economy. Finally, it should support and encourage a vibrant rural Australia, a productive and efficient agricultural sector and have the capacity to fairly reflect the highly variable returns that farmers receive as a result of risk factors beyond their control. 

Much of the current taxation debate has centred on what changes might occur to the GST.  NSW Farmers opposes the imposition of a GST on fresh food in the current tax system and has exceptionally strong concerns at the prospect that GST may be levied onto fresh food under any proposed changes. Chief among our concerns is that producers such as horticulturalists will effectively be forced to absorb any GST on fresh food because of their limited market power and the pricing structures of the markets in which many operate.

Beyond this, any changes to the GST, broader or higher, must be considered in light of what other changes they will allow and whether they will help drive economic activity. For example, any changes may provide an excellent opportunity to dispense with inefficient state taxation such as stamp duty and payroll tax, something that the association would warmly welcome. It would also be extreme folly to consider the introduction of a land tax, which effectively is a tax on the main productive asset of a farm business.

With this in mind, NSW Farmers keenly awaits the federal government’s reform proposals due early next year. Finally, if this is to provoke full and frank public debate, then it must be accompanied by public disclosure of any economic modelling from Treasury used to calculate the costs and benefits of the proposals.


NSW Farmers View
Published The Land 19 November 2015

Contact: Charlie Cull

Phone: 1300 794 000

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