Farmers will be able to claim the cost of fencing, water facilities and fodder storage assets when doing their next tax return.
Lobbying from farmers has successfully brought forward tax breaks flagged in the 2015-16 federal budget that were not due to start until the 2016-17 financial year, meaning farmers would not have received the benefits until their 2017 tax returns.
In a joint statement released late last month with the Agriculture Minister Barnaby Joyce and Small Minister Business Bruce Bilson, Treasurer Joe Hockey announced that farmers could claim a tax deduction on all capital expenditure on water facilities, fodder storage and fencing incurred since the 2015 budget was handed down on May 12.
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.
“Following broad consultation, stakeholders told us they wanted to get on with building fences, dams and fodder storage as soon as possible,” the statement read.
“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.”
Beveridge cattle farmer Greg Heffernan said the tax concessions were welcome news.
Mr Heffernan, president of the Better Beveridge Group, has about 200 head of poll hereford cattle on his property and spends about $2000 a year on fencing materials.
“Rather than taking 10 years to write off the costs [of fencing] it would be good to do it in one,” Mr Heffernan said.
“This will help with capital expenditure in the short term.”
Farmers with annual turnover of less than $2 million qualify as small businesses and will therefore be eligible to write off all assets purchased up to $20,000.
