Starting out in any business is tough and it’s no different in the agricultural sector.
Farm businesses often represent complex, multi-million dollar investments so the barriers to entry are significant.
With the average Queensland farmer now 56 years of age, we need to reduce the barriers to generational change in agriculture to ensure there is a continual infusion of new people and ideas to keep communities vibrant and industry productivity growing.
We also need to ensure that new entrants are supported so they are not set up to fail in the early years of their farming careers, given the greater income volatility compared to other sectors.
Since 2012, AgForce has lobbied State Governments for stamp duty exemptions for intergenerational transfer of farm businesses where a financial consideration applies.
We have highlighted that stamp duty represents a significant cost for succession and either adds to the financing burden of the new generation or takes away from the retirement income of the exiting generation.
So AgForce warmly welcomed the Queensland Government’s decision last year to provide stamp duty relief on family farm transfers and to extend that to include water entitlements and other assets. This has saved industry more than $22 million.
However, the current exemptions only apply to transfers of farm businesses to individual recipients, when farmers often use family trusts or companies to protect their assets and to assist fair succession arrangements.
Under current eligibility settings, the acquiring family trusts or companies potentially have to pay hundreds of thousands of dollars in transfer duty, which is why AgForce believes the stamp duty exemptions on family farm transfers need to be extended to include all family business models.
We’d also like to see continuation of concessional First Start loans, and an expansion of the eligible activities for succession planning grants to include professional advice plus the costs of financial assessments and the implementation of new business arrangements.
There is no doubt many of the changes made in the past 12 to 18 months are helping make it more affordable for farming families to plan for the future, but there is certainly more that can and should be done to support agriculture’s next generation.