Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is to Senator Farrell, the Minister representing the Prime Minister. Was Mike Hirst, former CEO of Bendigo Bank, correct when he said recently that taxing unrealised gains is going to provide cash-flow problems for people who might not be earning a lot of income but have assets? Can he guarantee that no farmer will have to sell any part of their farm to pay for a superannuation tax bill?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I thank Senator Colbeck for his question. I didn't get the opportunity with the previous question to point out just how small the impact of our super change is going to be. It's worth repeating that 99.5 per cent of superannuation recipients are not going to be the subject of this change.

In terms of the issue that you've just raised—in terms of unrealised gains—the simplest and least-cost approach is to apply the tax on the growth of an individual's balance over the year. This approach, recommended by Treasury, includes assessing unrealised capital gains. This approach strikes, we believe, the right balance between simplicity and ensuring that the tax can be applied across the system.

Trustees already calculate the value of their fund each year and submit that to the tax office, which will enable the ATO to—

Sue Lines (President) Share this | Link to this | Hansard source

Minister, please resume your seat. Senator Colbeck?

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

A point of order on relevance: it would be nice if the minister did at least use the word 'farmer', because the question was about whether a farmer might have to sell part of their farm.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator Colbeck. The minister is being relevant to the question.

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

Well, in terms of the question of whether farmers need to liquidate the family farm in, say, an SMF to pay the tax liability: under our superannuation law, funds should have some liquid assets to meet any additional tax liabilities and to meet their running costs. This is no different. There are a range of—

James McGrath (Queensland, Liberal National Party, Shadow Assistant Minister to the Leader of the Opposition) Share this | Link to this | Hansard source

Do you have any idea of how farms are run?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

Well, I do have some idea about how to run a small business, Senator McGrath. I do have some practical experience in that matter. (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Colbeck, first supplementary?

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Under Labor's new super tax, if a farmer with a self-managed super fund sees the paper value of their farm's self-managed super fund fluctuate above and below the $3 million threshold across a number of years, will those gains be subject to the 30 per cent tax rate each time?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

In terms of answering that question and the previous question: of course, there are a range of cash-flow requirements within an SMF, not just tax liabilities, which trustees are required to consider. They include the examples accounting and administration costs, investment fees and costs associated with maintaining real assets, such as property.

In terms of putting your question into some perspective, Senator Colbeck, I think it's worth pointing out that only 0.2 per cent of SMFs have a hundred per cent of their assets—

Sue Lines (President) Share this | Link to this | Hansard source

Minister Farrell, please resume your seat. Senator Birmingham?

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

A point of order on direct relevance: the question asked by Senator Colbeck in this case went particularly to the impact of thresholds and to those funds operating at or close to the threshold potentially moving up and down, above and below that threshold. Senator Farrell has had 49 seconds. He's only got 11 seconds left. He hasn't come close to the issue of the threshold.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator Birmingham. The question was about self-managed funds, but I will remind Senator Farrell of the entirety of the question.

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

I was trying to put the issue into some perspective, particularly so as not to frighten those farmers who do— (Time expired)

Sue Lines (President) Share this | Link to this | Hansard source

Senator Colbeck, second supplementary?

Richard Colbeck (Tasmania, Liberal Party) Share this | Link to this | Hansard source

How will you ensure that farmers, small-business owners and other self-funded retirees are not subject to double taxation under your new super tax?

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

The point I was trying to make before was that, obviously, the opposition thinks there's some political advantage in running a scare campaign—

Sue Lines (President) Share this | Link to this | Hansard source

Minister Farrell, please resume your seat. Senator Ruston.

Anne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | Link to this | Hansard source

On a point of order: the minister has clearly used the entire time not to answer the question—

Sue Lines (President) Share this | Link to this | Hansard source

Senator Ruston, if you're calling for a point of order on relevance—

Anne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | Link to this | Hansard source

Could you direct him to answer the question—

Sue Lines (President) Share this | Link to this | Hansard source

Senator Ruston! If you're calling a point of order on relevance, then it is on the question before the chair. That is the second supplementary and the minister has got to his feet. I will listen closely and, if he's not relevant, I'll remind him of the question. Minister.

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

With due respect, to Senator Ruston: just because you don't like the way I answer the question doesn't mean that what I'm saying is not relevant to the question. On this very point, the point I'm trying to make is a simple one. There's no point in trying to scare farmers or other small-business people with a scare campaign that bears no relevance to the facts. It bears no relevance to the facts!

Sue Lines (President) Share this | Link to this | Hansard source

Minister Farrell, thank you. Senator Birmingham.

Simon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | Link to this | Hansard source

A point of order on direct relevance, again, President. This minister is seeking to speak constantly in generalisations when a specific question has been asked. If he's worried about putting people's minds at ease, perhaps he should be able to answer the specific questions to put their minds at ease.

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Senator Birmingham. Minister Farrell, I will remind you of the question and the need to be relevant.

Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Link to this | Hansard source

Just on the question of double taxation: of course, one of the things to note about this new change is that it doesn't come into effect for a couple of years and that there's plenty of time to consult—

Sue Lines (President) Share this | Link to this | Hansard source

Thank you, Minister. The time for answering the question has expired.