Fleeing to the country: a cautionary tale

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The supercharged COVID-era sea change/tree change population shift is mostly welcome.

New arrivals are seen to bring vitality, money and a sense of validation that the country lifestyle is desirable, something the locals have always known.

Older residents are still haunted by the day the abattoir closed years ago. The town felt like it was closing. Shops were boarded up and families lacking work loaded everything onto trailers and hit the road.

The old Bendigo gasworks, closed since 1973.

The old Bendigo gasworks, closed since 1973.Credit:National Trust of Australia (Victoria)

In the mid-1970s, country districts in Victoria lost many old farmers who, to avoid death taxes, got themselves smart accountants, handed over their properties to their kids and took off to the Queensland sunshine.

Australia had imposed inheritance taxes since 1941. Properties assessed at more than $200,000 were subjected to death taxes that rose steeply to 27.9 per cent for those worth $1 million and more.

But in 1976 the Queensland government of the wily Joh Bjelke-Petersen, looking to boost the northern state’s population, suddenly abolished all death and gift taxes. Old farmers down in the chilly south headed north to the sun, intent on leaving their estates tax-free when they died.

Queensland became known as God’s waiting room.

Soon other states – spooked by “capital flight” to Queensland – began to abolish their own death taxes, and the federal government of Victorian farmer Malcolm Fraser joined the party.

Federal inheritance and gift taxes were abolished in 1979, leaving Australia as one of the few developed economies without some form of succession tax. Victoria’s death duties were gone by 1981.

A 2006 study by Joshua Gans of the Melbourne Business School at Melbourne University found an unusual number of Australians managed to postpone their deaths (or perhaps their families managed to manipulate the reported date of death) until after midnight on July 1, 1979, when the federal death tax ceased.

But what of all those old farming couples, still alive, who had fled to God’s waiting room, only to discover they could now die tax-free anywhere in Australia?

A market at Port Fairy.

A market at Port Fairy.Credit:Rob Blackburn

Plenty from our country district turned around and came home. The old folks had, their kids confided, found themselves lonely and uncomfortable. Their southern-bred hearts had not made the transition to the sun. They missed family and lifelong friends.

It may be that all those city people selling up for a fortune now and fleeing their suburbs for quieter country towns, where COVID rarely threatens and where houses are relatively affordable even in what we call a boom, have thought it all through and will retire contentedly, far from their familiar streets.

But in our town, like many in country Victoria and across Australia, they will find it difficult to get a doctor’s appointment.

A prominent local doctor recently wrote a long and considered letter to the newspaper explaining the stress on a rural area suffering a chronic shortage of GPs.

Many of the recent residents, too, are going to be quite old quite soon. It’s already tough to find a bed in a retirement home. Younger families face long waiting lists for scarce child care.

Cape Schanck lighthouse, Gippsland.

Cape Schanck lighthouse, Gippsland.

Down the street, traders and cafe owners are short of staff. All those house sales have forced rents beyond the means of many low-paid workers.

There are numerous excellent reasons to live in the country. It is easygoing and friendly once you learn how to navigate local protocols, and the environment is beautiful.

Still, it’s worth cogitating about those old farmers who prematurely fled to Queensland in the 1970s, and to wonder whether a country town will remain quite as attractive to those from the city, far from old friends and familiar pleasures, once we’re vaccinated and COVID is no longer so menacing.