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Tax changes are small comfort



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RALPH HUNT MEDIA

DEPUTY LEADER NATIONAL PARTY OF AUSTRALIA

149/85 CANBERRA 28 November 1985

TAX CHANGES ARE SMALL COMFORT

Further changes announced to the Hawke Government's tax package today would not substantially ease the impact of a capital gains tax, quarantining of farm losses and the 1 fringe benefits' tax on the farm sector, Shadow Primary Industry Minister, Mr. Hunt,

said tonight.

Mr. Hunt said it is clear the Government is only interested in the loss of its revenue from the proposed changes.

"It is not interested in the damage its overall tax package will do to rural investment and the family farmers.

"Mr. Kerin claims that the lifting of the quarantine threshold from $15,000 to $20,000 will cost the Government $40m of its $105m revenue anticipated from this tax in 1987-88.

"Even with the five-year averaging option it is difficult to justify another tax on farmers at a time of chronically depressed incomes.

"The whole point of earning off-farm income in these tough times is to help farmers ride out the financial difficulties facing agriculture today.

"The combined effect of the quarantining of farm losses and capital gains tax is already depressing land price's in some areas, as people who would otherwise enter the market for rural land are being driven out of the marketplace.

"Unless there is some prospect of reasonable capital gain, few will wish to invest in farm land when returns to capital are averaging less than 2% per annum.

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"The alteration of water project write-off from five to three years is welcomed, but it is reducing incentive to invest in on-farm water storage.

"The Minister for Primary Industry, Mr. Kerin, is insulting the intelligence of farmers in suggesting that their concerns have been overcome by these last-minute minor concessions," Mr. Hunt said.