It may be hard to feel sorry for someone who has more than $3 million stashed away but farmers say proposed changes to superannuation will seriously affect many hard-working families.
Unlike average Australians on a salary who get employer contributions to their super, farmers have to fund their own retirement and many do it by putting their farm into a self-managed fund.
When they retire they might lease the property out to earn income, sometimes to their children who then inherit the property when their parents die.
Under the federal government's proposed changes, however, farmers with more than $3m in their superannuation fund will have to pay capital gains tax if their property goes up in value.
A 5 per cent increase on a $3m property could result in a tax bill of perhaps $50k.
For some farmers, if they are cash poor, that could mean they may have to sell assets to pay the tax bill, but if the property value goes down the next year, they won't get a refund.
Why $3m in super may not be enough
Tony Mahar from the National Farmers Federations is scathing about the new policy.
"What the treasurer has done has demonstrated that he doesn't necessarily care about agriculture or he doesn't understand agriculture, and that's pretty disappointing," he said.
Mr Mahar says farmers rely on their property going up in value over time to sustain them in retirement.
"It takes many years for that asset to appreciate and that could be the lump sum of the superannuation package for that business," he said.
While the average punter might not have a lot of sympathy for farmers with a large amount in their self-managed fund, Mr Mahar notes that can be explained by the high cost of land.
"If you look at it from a farm business point of view you'd be struggling to get a farm for $3m," he said.
New tax a big worry for self-managed fund owners
The federal government's plan is to double the tax rate on the nation's largest super accounts from 15 to 30 per cent in 2025, which it says will affect about 80,000 people who have more than $3m in their super fund.
That proposal includes a new tax on "unrealised gains", or the amount that the property increases in value in a financial year.
The deputy leader of the opposition Sussan Ley is scathing about it.
"The suggestion that you might be taxed on those 'unrealised gains' on the way through, before you sell them, is impossible," she said.
"It's something that never occurs in our tax act and it's going to affect far more than the 80,000 [people] the government indicated."
ASX shares included
Julie Schofield from rural financial services firm Boyce warns it is not just the farm that could be taxed under this proposal.
"It's listed equities as well, any assets that have gone up in value in a superfund environment, but only for people with balances greater than $3m," Ms Schofield said.
She is urging farmers to wait until the dust settles and more detail is available before making any decisions.
Is it really as bad as farmers are suggesting?
Matt Grudnoff from the Australia Institute has been hosing down some of the concerns about the changes.
He said the 15 per cent tax rate will still apply to the first $3 million in assets and the 30 per cent rate will only affect assets above that cap.
"It's not until they get well above $3m that they'll notice any difference," Mr Grudnoff said.
He thinks that trimming the tax concessions to those who are asset rich is a good thing because the system is there to help people retire with dignity, not to avoid taxes.
