Government support stepped up for farmers

Government support stepped up for farmers

Geoff Wearne

By Geoff Wearne 
On 15 May 2015

With an El Niño event just declared in Australia, the Federal Budget announcement on Tuesday provided some timely assistance for rural communities battling drought and other problems.

The Government announced it will provide $250 million to continue the Drought Concessional Loan Scheme and the Drought Recovery Concessional Loan Scheme for a further year. It sees these schemes as essential to boosting employment and economic activity in these regions.

In addition, over the coming year, $25 million will be spent to help drought-affected farms combat the problems caused by pest animals and weed infestation.

Other assistance in Tuesday’s Budget for farmers include immediate tax deductions for new investment in water facilities and fencing for the 2016-17 tax year, while capital expenditure on fodder storage assets can be depreciated over just three years from 1 July 2016.

Areas suffering from the effects of drought are also to benefit from a new $35 million grants program to fund infrastructure projects, such as social and cultural amenities, civic developments and water supply projects.

Farmers in 70 local government areas with severe and prolonged rainfall deficiency are the target of a $20 million extension of social and community support services. On top of this, the Government will pay $1.8 million to fund 10 additional counsellors under the Rural Financial Counselling Service.

Additional positives for rural communities included the announcement of the Northern Australia Infrastructure Facility. The $5 billion fund will provide large concessional loans for infrastructure projects, to develop the Top End region, encompassing large regional areas of Western Australia, the Northern Territory and Queensland.

New supply chain infrastructure and roads to assist the region’s cattle industry, costing $100 million, were also announced.

Tasmanian food producers currently benefit from a $260 million Federal funding package to assist with the island-State’s freight, irrigation and roads through the Tasmanian Irrigation Tranche and Freight Equalisation Scheme.

One likely negative aspect of the Budget for fruit farmers will be the change in tax status for temporary working holidaymakers, who will no longer be entitled to the tax-free threshold. As a result, this may lead to a decrease in such holidaymakers and in turn, the number of available fruit pickers during picking season.

The Budget announcement drew attention to free trade agreements negotiated over the past year with the three largest importers of Australian goods: China, Japan and South Korea.

The reduction of trade barriers in these markets will reduce tariffs on a range of important agricultural exports, including beef (reduced from 12-25 per cent, to zero over nine years), wine (reduced from 14-20 per cent, to zero over four years) and dairy (reduced from 10-19 per cent to zero over four to 11 years, depending on the product).

The Government also reiterated its commitment to releasing a commissioned White Paper on agricultural competitiveness that aims to find ways to improve farm profitability, innovation and productivity.

Find out more about the Federal Budget 2015

Things to know before you Can:
This article is intended to provide general information only and does not take into account your individual objectives, financial situation or needs. The Budget measures are, at this stage, announcements and may change before they become law. You should seek independent, professional tax advice before making any decision based on this information.