TAX depreciation measures for farmers announced in the 2015 Federal Budget will be brought forward to this year.
On May 12, Federal Treasurer Joe Hockey announced $70 million would be allocated for accelerated depreciation claims for fencing, water facilities and fodder storage, but the move was scheduled for July 2016.
Immediately post-budget, Federal Agriculture Minister Barnaby Joyce said he was pushing Mr Hockey to fast-track the measures, in particular to assist farmers facing ongoing drought.
A helping hand for farmers
At the National Press Club in Canberra today, Small Business Minister Bruce Billson confirmed the program would now be in effect from May 12 this year.
“I am very happy to announce to you all today that the $70 million immediate asset depreciation measure for our farmers and primary producers, originally intended to start from July 1 next year, is being brought forward to be effective form budget night,” he said.
“This is great news and it will enable farmers to claim accelerated depreciation on vital infrastructure, such as water facilities, fodder storage, fencing and the like and it’s an ongoing initiative.
“Now this reflects the feedback we’ve got from primary producers and I must say the vigorous advocacy of my friend - and shy colleague - the Agriculture Minister, Barnaby Joyce.
“It is about our aim to give a boost to regional Australia and to do it now and that’s what farmers were asking for.
“They know this will make a real difference to them and this is fantastic news to be able to get on with that straight away.”
Mr Billson said nowhere is small business more important than in our rural and regional communities.
“We know our farming enterprises are small businesses,” he said.
“Healthy regional communities rely on robust local small businesses.”
In a statement with Treasurer Joe Hockey, Mr Billson and Mr Joyce said Australian small businesses received a boost on Budget night by being able to immediately claim accelerated depreciation on business assets costing up to $20,000.
They said 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.
“Supporting 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,” they 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.
“Further measures to support farmers who are preparing themselves for the damaging effects of drought will be announced in the forthcoming Agricultural Competitiveness White Paper.”
Waiting on White Paper
Mr Joyce said the announcement was one of several measures the Abbott government had announced to support the agricultural sector leading up to its long-delayed release of the White Paper.
He said bringing back the date back by one year, for depreciation and 100pc write-off for water reticulation, fencing and fodder storage, would be welcome news for farmers and connected businesses.
“All those people who want better marketing of grain so that they can store their grain for longer and are wondering when to buy silos and grain sheds or build the silos and hay sheds can now write that off over three years,” he said.
“All those time frames will be brought into the more immediate term.”
National Farmers' Federation president Brent Finlay has said moves to bring forward the commencement date for accelerated ag infrastructure depreciation was supported by the farm sector.
He said the government’s proposal to introduce an important concession for drought preparedness had also been “enthusiastically received by farmers across Australia”.
Mr Joyce said funding for drought relief measures, including Farm Household Allowance in the forward estimates and $100 million for beef roads, were included in the Budget and part of the White Paper process, with “more to come”.
“I want people to absorb all the good messages before we give them the next lot of good messages,” he said.
“And we’ve already started discussion on the relocation of Research and Development Corporations and the APVMA so people know we’re for real about it.”
Mr Joyce said people were already out expressing their views “virulently” for or against his proposal to relocate government agencies to regional centres.
“What it shows is, the grass doesn’t grow under our feet,” he said.
“We have a vision and a purpose and we’re going to make the very most of this time in government to basically refurbish, to decentralise and be part and parcel of one of the biggest turnarounds in commodity prices this nation has ever seen.”
Mr Joyce also refused to confirm or deny speculation the Agricultural White Paper may be released on June 18, in view of final cabinet approval.
But he said the comprehensive policy document for the farm sector would not get released “without my say-so”.
“The White Paper is sitting on my desk - the money has gone through the budget - and we will determine when the White Paper is released and the means by which that will happen,” he said.
“I’ve already released some of it.”