Labor says Coalition must come clean on farm land tax plans

Labor says a land tax could cripple farmers impacted by drought, fires and trade disputes.

The plan was put forward by NSW Treasurer Dominic Perrottet in the last NSW budget in an attempt to overhaul the state's old land tax and stamp duty system.

NSW Farmers have already rejected the move saying it would have sent many farmers broke during the drought.

Labor claims under the reform proposal, farms - which are currently exempt from land tax - will be taxed the same as high-end houses in Sydney's eastern suburbs.

NSW Labor Leader Jodi McKay says she pressed the Deputy Premier during Question Time about whether he supports the Treasurer's proposal to tax farmland, and said John Barilaro denied the reforms will affect farmers.

Labor's Candidate for Upper Hunter Jeff Drayton said the tax on farms was "sneaky and unfair".

"A farmer in the Upper Hunter should not pay the same rate as someone who owns a mansion in Sydney's eastern suburbs. The Government wants you to pay the same rate of tax regardless of the value of your property. This is just another example of the Upper Hunter being left behind and not getting its fair share," Mr Drayton said.

"Farmers in the Upper Hunter have been hit by drought, bushfires, economic recession, international trade disruptions and a mouse plague. They don't get the support they need right now and this policy proposal will only make the situation worse."

Shadow Minister for Primary Industries Jenny Aitchison said the Nationals have misled farmers:

"The Deputy Premier denied the reforms would impact farmers when the Treasurer announced them, then did a backflip the next day. How can farmers trust the Nationals? They don't care about farmers."

Ms Aitchison said a broad-based land tax could bankrupt some farmers: "Not many other business models have an ongoing tax on the cost of production - in this case, land. This will be yet another fixed cost that they will have to continue pay during those lean years when they don't make any money, or worse, suffer losses.

NSW Farmers president James Jackson last year said future drought-affected farmers could be bankrupted by the proposal.

Mr Jackson wants the government to abandon a proposed new state tax reform which would impose a land tax on agriculture, calling instead for a full review of all state and Commonwealth taxes.

"We don't like stamp duty and we probably like land tax less," Mr Jackson said.

"The problem with land tax, of course, is that our income is really lumpy. [Land tax] is a charge that's charged every year."

Mr Jackson said a land tax would have "put a lot of people out of business" in the recent record-worst drought.

Farmers in drought tend to earn limited or zero income and most "hunker down", slashing business costs and personal spending to reduce borrowing, he said.

But if there's a fixed land tax every year "people can't hunker down in a drought and make all those savings," Mr Jackson said.