Depreciation move a win for north coast farmers

Page MP Kevin Hogan has welcomed the government’s changes to the planned rollout of capital equipment write-downs for farmers, meaning the cost of constructing fences, dams and tanks can now be instantly deducted.

But Labor’s shadow agriculture minister Joel Fitzgibbon has called it a ‘back-down’ and said the original plan, which wouldn’t have come into effect until 2017, was ‘an example of agriculture minister Barnaby Joyce’s failure to understand what farmers need and are indeed calling for.’

Under the changes, farmers can fully now deduct the cost of water facilities and fencing in the year they are purchased and deduct the cost of fodder storage assets over three years.

Mr Hogan said the brought-forward write-offs would particularly benefit farms with larger turnovers.

‘Northern Rivers small businesses got a boost on budget night [by] being able to immediately claim accelerated depreciation on business assets costing up to $20,000. Farms with turnover of less than $2 million qualify as a small business and are therefore also eligible to immediately write-off all asset purchases up to $20,000,’ he said.

‘As part of broad consultation across the Northern River and Clarence Valley, stakeholders told me they want to get on with building fences, dams and fodder storage as soon as possible,’ he added.

‘Our decision to bring forward the start date of accelerated depreciation for all farmers, regardless of the size of their farm, allow them to prepare for drought and invest in the productivity of their farms immediately.’

Mr Hogan said the measure builds on our some $333 million in targeted support for farmers and communities impacted by drought and takes the government’s total commitments to farmers in this year’s budget to more than $400 million.

‘Supporting our farmers in the hard times and boosting the competitiveness of the agriculture sector is not just good for the economy, it is also the right thing to do,’ Mr Hogan said.

Bringing forward these changes to begin from 1 July 2016 to 12 May 2015 is estimated to cost $72 million over the forward estimates.

Policy ‘debacle’

But Mr Fitzgibbon said that promising farmers suffering their third year of drought assistance in two years’ time was ‘an insult to them and their families.’

‘The Government’s drought policy has been one debacle after another:

• Concessional loans farmers can’t get or don’t want which cost the government between 2 per cent and 3 per cent but are lent to farmers at between 3 per cent and 4 per cent.
• Money taken from some drought-affected states to pay others.
• Water grants massively underfunded and oversubscribed.
• Council grants yet to be detailed but dwarfed by cuts to the same councils’ Financial Assistance Grants.

‘Today’s back-down is another example of Barnaby Joyce’s failure to understand what farmers need and are indeed calling for,’ Mr Fitzgibbon said.