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Wednesday, 11 December 2002
Page: 7766


Senator MINCHIN (Minister for Finance and Administration) (4:29 PM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows

This bill amends the Income Tax Assessment Act 1936 to provide an exception to the rule that Farm Management Deposits have to be held for twelve months in order to qualify for tax concessions for farmers in Exceptional Circumstances declared areas.

The Farm Management Deposit scheme allows eligible primary producers to set aside pre-tax income in profitable years to establish cash reserves to help meet costs in low-income years. Normally, the accompanying tax concessions are only available when deposits are held for twelve or more months. The exception to the twelve month rule is one of the initiatives announced by the Prime Minister on 27 November 2002 to assist rural communities and our farmers cope with the current drought.

The initiatives provide additional funding and support to meet a number of concerns including cashflow for farmers, pest control, environmental protection and community support for struggling farmers.

The change to the twelve month rule will help farmers manage the cash flow impact of the drought and build on the significant funding already provided by the Commonwealth to managing the drought. In addition, the Government will streamline consideration of advice on exceptional circumstances applications to ensure there is no unnecessary delay in the coming weeks.

Further minor amendments will also be made to the taxation laws to enhance the flexibility and operation of the FMD scheme.

Full details of the measures in this bill are contained in the explanatory memorandum.

I commend this bill.

Debate (on motion by Senator O'Brien) adjourned.