THE Federal Government¹s decision to changes its policy on Managed Investment Schemes (MIS) has forc

15 Feb, 2007 07:00 PM
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Rewards Group had planned to increase its 60ha orchard in Dandaragan to 300ha in 2008 but have put those plans on hold.

Rewards Group has mango and grapefruit plantations near Kununurra, which it was looking to expand in future years.

Rewards Group managing director Andrew Rado said those plans have now been stopped by the tax ruling.

Mr Rado said legislative changes would prevent business expansions and culminate in huge losses for towns located where his company did business.

Also affected is Australian Agricultural Contracts Limited (AACL), which manages grain investment projects in WA using multi-peril crop insu-rance-type arrangements, un-der share-farming principles.

AACL joint general mana-ger Daniel Stevens said AACL was considering taking legal action against the Federal Government over its decision to exclude the grains industry from managed investment schemes.

Mr Stevens said it was business as usual but he was not as confident about the long term future.

³In three years, capital raising will be questionable because investors will look somewhere else to get better and more attractive returns for their dollar,² he said.

³The government needs to make an announcement so that investment can be rectified and job losses avoided.²

The Pastoralists and Graziers Association (PGA) was also critical and believed MIS served two functions.

PGA policy director Slade Brockman said one function was to bring investment dollars to industries that found investment difficult due to long waits for financial returns, with forestry the most cited example.

The other was to allow a spreading of investment risk between, for example, rural and urban investors.

³The Federal Government and the ATO should not try to micro-manage MIS,² Mr Brockman said.

³Rather, they should put in place a framework that encourages opportunities for investment based on sound economic principles, and not just the opportunity for an up-front tax break.²

Federal Opposition agriculture spokesman Kerry O¹Brien said the government¹s decision had triggered a wave of job losses across Australia and major banks had prepared for bankruptcies.

³My office has been inundated with calls and correspondence from angry growers, financiers and corporations,² Mr O¹Brien said.

³Australia¹s largest olive oil company, Boundary Bend, has already laid-off 20 workers from its Lara nursery as a direct result of this decision.²

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