White Paper’s FMD reforms a win for farmers
Federal Member for O’Connor Rick Wilson MP today welcomed the farm management deposit (FMD) reforms announced over the weekend as part of the Australian Government’s Agricultural Competitiveness White Paper.
Mr Wilson said he has been fighting for changes to FMD since he realised the system was providing a windfall to banks and not to the farmers.
“I’ve never understood why FMDs can’t be used as an offset account, against a bank loan, so I suggested this to Minister for Agriculture Barnaby Joyce,” Mr Wilson said.
“To hear these changes have been included, and will reduce interest costs estimated at up to $150 million a year, is a great win for farmers across O’Connor.”
Other changes to be announced include:
• farmers to opt back into income tax averaging after 10 years, from 1 July 2016;
• farmers to double their Farm Management Deposits (FMDs) to $800,000, from 1 July 2016;
• immediate tax deduction for fencing;
• immediate tax deduction of the cost of new water infrastructure; and
• accelerated three-year depreciation of capital expenditure on fodder assets.
The Government will also invest $11.4 million to boost ACCC engagement with the agricultural sector including a new Commissioner expert in agriculture.
“A more farm-savvy and proactive ACCC will encourage fair trading and strengthen competition in agricultural supply chains.”
The White Paper builds on the Government’s investments to build 21st century water, transport and communications infrastructure, including a new $500 million National Water Infrastructure Fund that will provide future water security for our farmers.
Mr Wilson said Australia will always stand by farmers in drought which is why the following initiatives announced in the 2015 Budget and the White Paper will provide long-term support for famers when they need it most:
• 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;
• access for farmers to their Farm Management Deposits when needed, without losing tax concessions;
• $35 million for local infrastructure projects to help communities suffering due to drought;
• $25.8 million over four years to manage pest animals and weeds in drought-affected areas; and
• advice and help from the Australian Taxation Office.
The Australian Government is opening new export markets and will protect Australia’s highly prized biosecurity status, which underpins our valuable exports.
“The Abbott Government has successfully delivered the trifecta of free trade agreements with Japan, the Republic of Korea and China – this will deliver new opportunities for our farmers,” Mr Wilson said.
“I am delighted the White Paper includes $200 million to improve biosecurity which will help ensure Australia’s premium products remain top quality and $30.8 million to break down technical barriers to trade and appointing five new overseas Agriculture Counsellors.
“Together we are building a stronger, more productive, more profitable and more sustainable Australian agriculture sector.”
Farmers and residents wanting to know more about the Agricultural Competitiveness White Paper can visit www.agwhitepaper.agriculture.gov.au.