Australian farmers already grappling with soaring costs have been dealt a “hammer blow” by Labor’s budget in what has been described as the “biggest tax grab” launched on the sector in history.
The government scrapped the 50 per cent capital gains tax discount for cost-base indexation and a 30 per cent minimum tax rate.
Nationals leader Matt Canavan called for Anthony Albanese’s ousting over what he called the “biggest tax grab in history” against farmers.
“Given that Australian farmers make most of their returns via capital gains, Labor’s broken promise would be the biggest tax grab launched on Australian farming in history,” Senator Canavan said in a speech to the rural press club.
“The tax changes must go and, if the PM refuses to back down, the Australian people should make him go instead.”
Senator Canavan said “many young farmers” who will be impacted by Labor’s tax overhaul.
In his speech, Mr Canavan said Australian farmers relied on capital gains and not income, so an increase in taxation would hit them “the hardest”.
“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,” he said.
However, Australia’s peak farming body, the National Farmers Federation, welcomed key measures in the federal budget which it said would “ease pressure on farmers”.
The NFF said it welcomed the exemption of primary production from the new 30 per cent trust tax and that there would be no changes to small business CGT concessions.
It also welcomed the government’s $10 billion fuel security package.
While the Albanese government said it would consult the startup industry on the CGT changes, Mr Canavan said the same should be afforded to the agriculture industry.
“This is especially true for our farmers who take high risk, suffer low annual returns but can keep going through a drought knowing that their land value will probably increase whatever the weather forecast is,” Mr Canavan said.
It comes after young investors and entrepreneurs shattered Labor’s spin that its tax changes are good for younger Australians.
The government said its budget would address intergenerational inequity, but the changes to CGT and negative gearing were grandfathered.
This preserves the favourable conditions for older Australians and those benefiting from the old scheme.
Younger Australians are also more likely to invest in shares to build wealth and save for a deposit on a home.
In April 2025, Mr Albanese ruled out changes to negative gearing or CGT, saying: “Yeah, it’s off the table”.
He reinforced that position in May 2025, telling Sky News: “The proof’s in the pudding. If we were going to make changes, then why haven’t we?”
However, in the first federal budget since, the government has completely reversed its position without taking the changes to voters at an election.