The wait is over.
After a considerable gestation period, the Federal Government has delivered its Agricultural Competitiveness White Paper – a $4 billion investment across what the government has identified as five key priority areas for agriculture:
- A fairer go for farm businesses
- Building the infrastructure of the 21st century
- Strengthening our approach to drought and risk management
- Farming smarter
- Accessing premium markets
Many of the big-ticket items which will be of direct benefit to primary producers nationwide are focused on tax reforms set to be phased in next financial year:
- Producers will be able to opt back into income tax averaging after 10 years
- Banks can allow the use of farm managed deposits (FMD’s) as a business loan offset, potentially reducing interest costs for the whole sector by $150 million annually
- Producers will be able to double their FMD’s to $800,000 from July 2016
These reforms are in addition to the measures announced in the recent budget that will allow an immediate tax deduction for fencing and the cost of new water infrastructure as well as accelerated 3-year depreciation of capital expenditure on fodder storage assets.
Some of the other initiatives of interest are:
- a $500 million National Water Infrastructure Fund (with $450 million designated to construction in partnership with State and Territory governments and the private sector)
- $100 million to be spent over 4 years to extend the Rural R&D for Profit Programme to 2012-22 to get research into the farm
- $29.9 million invested over 4 years for farm insurance advice and risk assessment grants to help farmers evaluate options
- $30.8 million to break down technical barriers to trade and appointing 4 new Agriculture Counsellors
- $12.4 million to modernise Australia’s food export traceability systems
- $200 million to improve biosecurity surveillance and analysis nationally, including in northern Australia
Importantly, there are also funding measures directly aimed at helping producers achieve a better return at the farm gate:
- $11.4 million invested to improve links between the agricultural sector and the Australian Competition and Consumer Commission (including a new Commissioner dedicated to agriculture)
- $13.8 million will be spent on a two-year pilot program to provide producers with knowledge and material on cooperative, collective bargaining and innovative business models to help farmers to establish alternative business models (including cooperatives) and manage contract negotiations. It is hoped that the information will “help to counter-balance retailer and processor market power and achieve fairer farm gate prices. It will also help strengthen the business orientation of farmers, increase the ability of farmers to control a larger volume of product, and enable farmers to operate at a larger scale”.
If you are interested in this sort of information, contact Matt Bell 07 4616 9898
To read a summary of the White Paper click here
To read the entire White Paper click here
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.