Why dairy farms are a ticking timebomb but it's not what you think

THERE’S a ticking timebomb, sitting in the filing cabinet of the home office at most local dairy farms.

It's as much the product of escalating asset values as it is the hard work and business acumen of Gippsland farmers.

But if you’re not doing something to defuse a developing situation, it’ll one day blow up in your face and possibly take family relationships with it.

That was one of the key takeaways from a hugely well-attended GippsDairy Muster 2026 day, hosted in glorious autumn sunshine on the Toora dairy farm of Tania and Clint Staley, last Thursday.

Yes, there were breakout workshops on pastures and feed management with local dairy farmers Clint Staley and Paul Cocksedge talking with agronomist Jim Colquhoun, facilitated by Phil Shannon.

An interesting panel session on genetics, facilitated by Dr Michelle Axford from DataGene, with Jamie Drury of World Wide Sires and Tania Staley, where the emphasis was on breeding for animal health and complementary traits as much as for production.

And, prior to that, there were revealing discussions with Tania and Clint around a dairy case study and their own experience, developing a herd of 700 cows, on a 1000 hectare property at Toora, with 160 replacements annually, 11 staff, 50-stand rotary, feed pad, cropping and all the other complications of a modern dairy operation.

But the keynote address, delivered with stunning clarity by Dubbo solicitor and cropping/beef farmer, Claire Booth, was all about challenging those present to get their finances, farm planning, tax planning and succession planning in order.

And she used a hairdressing analogy to illustrate how farmers should go about finding the right financial advisor/tax accountant for the biggest decision of their lives.

“You know when you just want a cut and colour every six weeks, just about any hairdresser can do the job. But you want to look at it like you’re selecting a hairdresser before your wedding. You want to pick someone who won’t stuff it up on your big day, when there’s no time to go back and fix it up.”

Working in tandem with Bairnsdale accountant and farmer Ken White, the message about getting on with financial planning was clear.

How Claire Booth wrapped it up

The Sentinel-Times interviewed Claire Booth after her animated presentation on financial and succession planning.

Sentinel: You're a lawyer and also a farmer up there at Dubbo, and today you've been involved in an important session for farmers on financial and succession planning. What were the key takeaways from today?

Claire: “The primary key takeaway from today is that in a world at the moment that is so volatile, like Iran's stuff is a bit scary, the price of diesel and fert is just through the roof. It is a really tough time to be in family farming, and a lot of it feels out of our control.

“So, one of the key takeaways was, okay, what's in our control? And what can we be doing at the moment? And is it a good time to be actually going to the accountant and saying, I wonder if I should start farm succession, because you can control the conversations with the bank and the accountant and the succession process, particularly as the parents.

“So, the primary takeaway, was to sort of say, it is really hard at the moment, however, it's sometimes really nice to just put your head down and go, I'm going to actually do three things before Christmas, so that I am part of building a legacy for my family, rather than just sort of putting my head in the sand and hoping that this current really tough time just blows over.”

Sentinel: And what would be three things you could point to that would be worth focusing on.

Claire: “So, one of the three things would be to go to your accountant and say, do I have an asset that has been acquired by our family or by an entity after 1985? If yes, is there any taxation, capital gains tax that I might need to pay when I transfer it?

“So that's number one, do I have a tax impact statement? Number two, have I had a conversation with my wife or my husband around our retirement, and what is that going to look like?

“And number three, if I do retire, how much money do I actually need, and is the business going to be helping pay for certain things like, you know, tyres, fuel, car So  etc? Those are the three things that are really easy to do and everyone can do.

“And a two-hour appointment with your accountant isn't very much money, but it could save you millions of dollars in really bad capital gains tax planning.”

Bairnsdale accountant and farmer Ken White had a similar view about the imperative of planning for tax and retirement.

“I think the main message out of today's succession planning topic was about people getting the right advice from the right professionals and taking a long term view of estate or succession planning,” said Ken.

“It needs to be well planned out to manage tax, stamp duty and future wealth protection for outside family members.”

Sentinel: I heard you say that one of the biggest challenges for accountants is that legislation is brought in, but then it's not updated for current values. Was there a particular issue there that you think needs to be addressed.

“Well, I touched on the small business capital gains tax concessions, which we have threshold tests around what business qualifies for those concessions. And the first one of two tests, is a turnover test of $2 million per annum, and the other one's a net asset test of $6 million. So, you've got to pass one or the other.

“The challenge that businesses face now is that those thresholds have stayed static for, I think, around 20 years. They haven't been indexed at all. So, what we're finding is a whole lot of bracket creep, where a lot of business entities are now tipping over the scales, over those thresholds. And if you don't plan around that, you can have some really adverse tax consequences.”

The GippsDairy Muster 2026 started with a word from the major sponsor, CEO of the Gardiner Foundation, Allan Cameron, who provided an update on a new initiative by the foundation, bringing eight new technologies the Australia from overseas. And he asked dairy farmers in attendance to register their interest on the Elevate Dairy website at: https://elevatedairy.com.au

Dairy Australia Chair Paul Roderick was also in attendance and congratulated Clint and Tania Staley for hosting the day and being willing to share their experience with fellow dairy farmers.

Organisers of the South Gippsland Dairy Expo, John Hutchison and Deanne Kennedy of Jaydee Events, had a key role to play in the success of the day organised by GippsDairy as their main outreach event for Gippsland’s dairy farmers.