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Thursday, 24 February 1977

The Treasurer, Mr Phillip Lynch, said today that primary producers whose properties had been burned out in the recent bushfires should not overlook the taxation benefits that may be available to them under the new scheme of income equalisation deposits.

Mr Lynchexplained that the purpose of the income equalisation deposit scheme is to help primary producers smooth out the effects of fluctuating incomes.

The scheme can therefore be used to avoid any abnormal effects on the current year's income that the receipt of insurance proceeds or the proceeds of forced sales of livestock as a result of the fires might possibly have.

A primary producer lodging money under the scheme is entitled to a tax deduction for the amount deposited, up to 40 per cent of the total income derived in the particular year from primary production activities.

In calculating primary production income, the proceeds of forced sales of livestock and sums recovered under insurance policies for the loss of livestock or crops will be taken into account.

Mr Lynchpointed out that all moneys placed on deposit earn interest at S per cent per annum without any discount in respect of the tax saved by the depositor by way of the deductions allowed under the scheme.

Deposits, which can be withdrawn at any time after 12 months, are treated as assessable income for tax purposes when they are withdrawn.

Within the 12 months period following a deposit the money can, however, be withdrawn only on grounds of hardship arising out of conditions not in existence at the time the deposit was made.

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