Since being published in July 2015, we have received mixed feedback from our farming clients about the proposals outlined in the Australian Government’s “Agricultural Competitiveness White Paper”.
The White Paper was published by the Government as part of its election commitment to grow Australia’s agricultural industry. It outlines a $4 billion investment in farmers and the agricultural sector.
The full White Paper can be viewed here: Agricultural Competitiveness White Paper
A summary of the White Paper is available here: White Paper at a Glance
“Fairer Go for Farm Businesses” (Market Regulation & Tax Concessions)
The Government has promised the following investment to help farmers achieve better returns:
- $11.4 million to boost ACCC engagement with the agricultural sector including a new Commissioner dedicated to agriculture; and
- $13.8 million in a two year pilot programme to provide knowledge and materials on cooperatives, collective bargaining and innovative business models.
It has also promised red tape reduction and a better tax system, including:
- $20.4 million is allocated to further streamline agricultural and veterinary chemicals approvals. It is hoped that farmers will get access to new farm chemicals more quickly, reducing the cost of doing business;
- Improved country of origin labelling to let consumers know where food is grown and processed;
- Farmers will be able to opt back into income tax averaging after 10 years;
- Farmers will be able to double their Farm Management Deposits (FMDs) to $800,000;
- Banks can allow farmers to use FMDs as a loan offset, reducing interest costs. ABARES has estimated that, if all FMD holdings are used to offset loans, the benefit to the farm sector in interest savings could amount to $150 million a year; and
- Accelerated depreciation for fencing has been simplified – farmers are able to immediately deduct the cost of new fencing in the year of purchase.
The Government has promised to deliver on the following infrastructure commitments:
- $500 million National Water Infrastructure Fund for farmers’ future water security. The Fund is comprised of $50 million to undertake the detailed planning necessary to inform future water infrastructure investment decisions and $450 million to construct national water infrastructure, in partnership with State and Territory governments and the private sector;
- $29.5 billion on the National Broadband Network (NBN) rollout;
- An additional $60 million on top of the $100 million Mobile Black Spot Programme to improve mobile coverage across regional Australia.
“Strengthening Approach to Drought and Risk Management”
Regarding drought management and support, the Government has promised:
- $3.3 million to give farmers more accurate, more local and more frequent seasonal forecasts;
- Immediate tax deduction of the cost of new water facilities for farmers and depreciation of capital expenditure on fodder storage assets over three years;
- $29.9 million over four years for farm insurance advice and risk assessment grants to help farmers evaluate options;
- Up to $250 million in Drought Concessional Loans each year for 11 years;
- $22.8 million to increase Farm Household Allowance case management for farmers;
- Increased financial counselling services and improved access to community mental health;
- Farmers in drought can access their FMDs when needed, without losing tax concessions;
- $35 million for local infrastructure projects to help communities suffering due to drought; and
- $25.8 million over four years to manage pest animals and weeds in drought-affected areas.
“Farming Smarter” (Investment in Technology & Labour)
The following investment has been promised:
- $100 million extension of the Rural R&D for Profit Programme to 2021–22 to get research onto the farm;
- $1.4 million research boost to match industry levies and contributions in the export fodder and tea tree oil industries;
- $1.2 million to the Rural Industries Research and Development Corporation for small industries;
- $50 million to boost Australia’s emergency pest and disease eradication capability; and
- $50 million to give farmers better tools and control methods against pest animals and weeds.
“Accessing Premium Markets”
The following steps are proposed to improve international trade:
- $30.8 million to break down technical barriers to trade and appointing five new Agriculture Counsellors;
- $200 million to improve biosecurity surveillance and analysis nationally, including in northern Australia;
- $12.4 million to modernise Australia’s food export traceability systems to further enhance our food safety credentials.
Remember, Groom & Lavers has offices in Toowoomba and Oakey and acts in all forms of agribuness transactions. Darling Downs Conveyancing is able to help you with all aspects of rural and vacant land transfers, including the transfer of farms, farming assets, subdivision and water access issues.
Contact Groom & Lavers for an appointment today on (07) 4616 9600, or via our contact page.