Something happened in the budget carry-on that should have every farming family in Australia paying attention.
Canberra explained it clearly on BUDGET NIGHT.
Buried inside the tax changes are proposals that could reach deep into family land, succession planning, discretionary trusts, retirement structures and farms that have been held for generations.
The government has dressed the package in the language of fairness, housing affordability and tax reform. The official budget papers say the proposed capital gains tax changes are designed to “support home ownership” and improve fairness in the tax system.
From 1 July 2027, the existing 50 per cent CGT discount would be replaced by cost base indexation for assets held longer than 12 months, with a 30 per cent minimum tax on net capital gains. The budget papers also state that these changes would apply to all CGT assets, including pre-1985 CGT assets, held by individuals, trusts and partnerships.
Read that again.
All CGT assets. Including pre-1985 assets. Individuals. Trusts. Partnerships.
For decades, many farming families have worked on the understanding that land acquired before September 1985 sat outside the capital gains tax net. That was not a loophole suggestion in some city boardroom. It was part of how families planned, borrowed, survived, retired and handed the farm from one generation to the next.
Under the proposed changes, gains before 1 July 2027 remain protected. But gains after that date may become taxable. That sounds neat in a Treasury document. On a farm, it is anything but neat.
Land is not just an asset on a spreadsheet.
It is the house site, the paddock, the orchard, the water point, the soil, the shed, the debt security, the retirement plan, the children’s inheritance, the thing the bank looks at, the thing the family argues over, the thing no one wants to lose.
And now families are being told to go back to the accountant. Again.
Go back to the lawyer. Again.
Review the trust. Again.
Check the succession plan. Again.
Work out whether Mum and Dad can still retire into town while the kids lease the farm and keep going.
Work out whether the landholding entity still makes sense.
Work out whether the next generation can afford to take over.
This is being sold as housing policy. But many farmers are now asking the obvious question.
What has this got to do with helping young Australians buy a home?
The proposed discretionary trust measure adds another layer. From 1 July 2028, the government proposes a 30 per cent minimum tax on discretionary trust income, paid by the trustee. The official explainer says fixed trusts, widely held trusts, complying super funds, special disability trusts, deceased estates and charitable trusts are excluded. It also says some income, including primary production income, will be excluded.
That exclusion matters. It should be acknowledged. But it does not make the whole issue disappear.
The same official material also says discretionary trusts are used for asset protection and succession planning. That is not a minor point. In farming, structures are often not built for games.
They are built because farms are exposed. Weather, banks, family breakdowns, machinery debt, disease, drought, flood, market swings, legal risk, insurance risk, input costs and succession pressure all sit over the top of the business.
A trust is not always a rich person’s trick. Sometimes it is the fence between one bad event and losing the family farm.
Even the ABC reported that tax and legal experts warn the changes may not only hit the ultra-wealthy. Discretionary trusts are used by family businesses, and experts raised concerns about flow-on effects for ordinary businesses and family groups.
That is the part missing from the political theatre. The people who write the rules keep speaking as if every structure is a rort. But in regional Australia, structure is survival.
The government may say primary production income is carved out from the trust minimum tax. Fine. But the land itself is still the bigger issue.
Reporting on RSM Australia’s agribusiness analysis noted that while primary producers were carved out from the 30 per cent trust income measure, there was no equivalent carve-out for the CGT changes affecting farmland and landholding entities.
That is where the pressure sits. At the kitchen table.
A son wants to take over but does not know what the tax position will look like. A daughter has come home to farm but cannot see a clean pathway.
Parents are tired and want to retire without destroying what they built. The land value has gone up on paper, but the cash is not sitting in the bank.
The farm might be worth millions, but the family is still watching diesel, freight, fertiliser, labour, fencing, insurance and interest rates eat them alive.
This is the lie Australians need to understand. Asset rich does not mean cash rich.
A farm can look wealthy from Canberra and feel like a trap from inside the family.
I work with farmers. I speak to them. I hear the strain in their voices.
Many are not sitting around trying to dodge tax. They are trying to stay above water. They are trying to keep soil alive. They are trying to get off the chemical treadmill. They are trying to keep animals fed, crops standing, pastures recovering, banks calm and families intact.
Some are closer to the edge than anyone in the city wants to know. And while they are carrying all that, another policy lands.
Another review.
Another restructure.
Another cost.
Another expert needed.
Another letter from an accountant.
Another piece of uncertainty around the land that was supposed to be the one thing they could stand on.
Australia keeps talking about food security as if it is a national priority. But food security is not produced by speeches.
It is produced by farmers who can afford to keep farming.
It is produced by soil that still functions.
It is produced by families who can hand knowledge from one generation to the next.
It is produced by paddocks that are not sold off because the tax rules, debt rules and compliance burden finally made staying impossible.
The city does not eat policy. It eats what farmers grow.
So before anyone waves this through as a tidy reform aimed at fairness, they should drive out past the last suburb and sit at a farming kitchen table.
Ask what succession really looks like.
Ask what happens when land value rises but income does not.
Ask what happens when parents want to retire but the children cannot carry the next structure.
Ask what happens when farms are forced out of family hands and into corporate hands.
Ask what happens to food, towns, schools, machinery businesses, rural jobs, local knowledge and soil stewardship when family farms are slowly squeezed until selling becomes the only option.
This budget measure may be written in tax language, but its consequences may be written across the land.
If we lose the farmers, we lose more than businesses.
We lose the people who know the country.
We lose the families who carry the memory of rainfall, soil, pasture, trees, animals and seasons.
We lose food independence and regional strength.
And if we keep treating living land as just another taxable asset, we should not be surprised when the living systems underneath Australia begin to fail.
Healthy soil matters. Healthy farmers matter. Healthy policy matters too.
Because a country that punishes the people who feed it is not reforming.
It is forgetting where food comes from.
Author’s note
Civilisations rarely survive because large systems remember how to live. They survive because living systems remain.
Living soil. Food. Seed. Water. Families. Farmers. Practical people who keep doing the real work while institutions become rigid, abstract and self-protective.
Across history, when large systems fail, continuity usually comes from small human groups outside the machinery of power. Farmers who keep growing food. Families who care for one another. Communities who maintain soil, seed and water. People who continue basic stewardship while institutions argue, posture or collapse under their own weight.
Dead systems do not grow life.
They manage. They tax. They regulate. They extract. They rule for a while.
But eventually they collapse because they are no longer connected to the living source.
What keeps a civilisation alive is usually much simpler than policy: people tending land, people tending food, people tending each other.
That is why living soil matters.
It is not just an agricultural issue.
It is civilisation repair.
Living soil restores life, and life is what rebuilds a country from the ground up.