Simpler, fairer tax deduction

Australians spend $2.3 billion annually on their tax affairs. And we have one of the highest rates of tax agent use globally. At Blueprint Institute, a think tank, we recently called for a $3000 standard deduction to simplify most taxpayers’ affairs. Under our proposal, people with deductions higher than $3000 could opt out, claiming their full itemised deduction. But 11 million people would be better off, receiving an average tax cut of $400-$1000. This would eliminate $4 billion in compliance costs and seven to nine million tax returns.

No taxpayer would lose out. But low- and middleincome earners would benefit proportionally more. Men and women would benefit fairly equally, with women better off at higher income levels.

The standard deduction also improves “horizontal equity” – the idea that two people in similar circumstances should pay similar tax.

Our work-related deductions system is complex and vague, while the standard deduction would reduce inequity and inefficiency. Taxpayers with higher expenses won’t benefit as much as those with lower deductions, but for people claiming less than $3000 that difference is minimal. It’s a price worth paying for lower, simpler and fairer taxes. Katelyn Lamont, researcher, Blueprint Institute

New data from Rural Bank provides detailed insights into the true monetary value of Australia’s farmland. Its Australian Farmland Values report reveals that for the first time in 15 years, all states saw growth in median price per hectare, demonstrating the resilience of values despite adverse events in recent years.

Tasmania led the way with 25.3% growth in 2020, followed by WA at 19.3%, NSW at 15.6%, Queensland at 11.8%, SA at 10.9% and Victoria at 6.9%. These extraordinary increases occurred despite a 14.5% rise in transaction volumes.

Australian farmland delivered an average compound annual growth rate of 7.6% over the past 20 years and the latest report has raised questions about how aspiring young farmers will enter the market.

Rural Bank wants to encourage the best and brightest talent to work in the sector. One way Rural Bank is doing this is by supporting groups like Cultivate Farms, a social enterprise that matches the next generation of aspiring farmers with retiring farmers and investors to own and operate a farm together.

Alexandra Gartmann, CEO, Rural Bank