Changes allowing the accelerated depreciation of fodder, fencing, and water infrastructure have been backdated to Budget night, Federal agriculture minister Barnaby Joyce has announced.
The National Farmers’ Federation says the Government has responded quickly to feedback received by industry and should be congratulated for the change.
The change means Australian farmers can now claim a tax deduction on all capital expenditure on water facilities, fodder storage assets and fencing incurred since the 2015 Budget was handed down at 7:30pm on 12 May.
Farmers can fully 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.
The Budget announcement also enables small businesses 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.
“Following broad consultation, stakeholders told us they wanted to get on with building fences, dams and fodder storage as soon as possiblem” Mr Joyce said.
“Our decision to bring forward the start date of accelerated depreciation for all farmers, regardless of the size of their farm, allows them to prepare for drought and invest in the productivity of their farms immediately.”
Mr Joyce said the new measures builds on the more than $333 million in targeted support for farmers and communities impacted by drought announced by the Prime Minister on May 9 in Longreach, taking the Government’s total commitments to farmers in this year’s budget to more than $400 million.
“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,” Mr Joyce 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.”
The National Farmers Federation said the decision to bring the commencement date forward will be welcome news for farmers and small businesses across the country – particularly those struggling with drought or preparing for El Niño conditions forecast for Eastern Australia.
“We acknowledge advocacy by the Minister for Agriculture, Barnaby Joyce, championing these changes,” the NFF said in a statement.
For information on the new drought support measures go to www.agriculture.gov.au/drought