Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Monday, 6 December 1999
Page: 12914

Mr Horne asked the Treasurer, upon notice, on 23 September 1999:

(1) Has his attention been drawn to the potential problems caused by the introduction of the new tax system and its effects in relation to oyster farmers.

(2) Have oyster growers since 1997 been seeking special consideration in valuing their stock as an asset with respect to their taxable income.

(3) Is it fact that oysters cannot be treated as ordinary livestock as it is very difficult to place a value on them until they are harvested or sold.

(3) Will the valuation of oyster crops for taxation purposes each year be difficult, particularly for small farmers.

(4) Will standing crops and timber be exempt from valuation for taxation purposes.

(5) Will action be taken to exempt oyster farmers from having to undergo year-end tax valuations; if so, what.

Mr Costello (Treasurer) —The Assistant Treasurer has provided the following answer to the honourable member's question:

(1) Under current arrangements section 70-35 of the Income Tax Assessment Act 1997 requires all taxpayers who are in business, including oyster farmers, to value their trading stock at the end of the financial year.

The Government is still considering its response to a number of the recommendations of the review including the tax value/cashflow method of calculating taxable income for business. However, in relation to trading stock the review has not recommended any significant changes.

(2) to (4) The Australian Taxation Office (ATO) has been discussing with oyster farmers since 1997, through industry representatives, about how to value their trading stock. These discussions are progressing.

(5) Under the current law, standing crops and timber are not ordinarily considered to be trading stock until severed from the land. This is the result of a number of court cases over the years.

(6) The Government has accepted the Review's recommendations on a Simplified Tax System for small business. Oyster farmers who meet the small business criteria will not be required to conduct a stocktake each year unless they have fluctuations in trading stock of more than $5000. This measure will mean that over 75% of small business taxpayers will not have to account for trading stock for the purposes of preparing their annual tax return.

The Simplified Tax System for small business was announced by the Treasurer on 21 September 1999 and will take effect from 1 July 2001.

Refer also to (2) to (4) above.