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Fightback! changes encourage farm investment



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B ruce L loyd Deputy Leader, National Party of Australia Shadow Minister for Primary Industry

M edia Ph: 06/2774193 F ax:06/2772053

FIGHTBACK! CHANGES ENCOURAGE FARM INVESTMENT

The Federal Coalition has provided a major stimulus for new investment in farm plant and machinery with the announcement of sweeping changes to the present complex series of depreciation schedules, according to National Party Deputy Leader

and Shadow Minister for Primary Industry, Bruce Lloyd.

"All plant and equipment, both new and existing, will be able to be written off more quickly because the Coalition believes farm investment must be assisted by simplifying and accelerating tax depreciation," Mr Lloyd said.

"The ability to change current and previous depreciation rates on existing farm plant and machinery will by itself be a significant cash flow boost for farmers, including those currently suffering their worst ever incomes and not able to replace any existing equipment."

Mr Lloyd said one of the key elements of the depreciation package was that all plant and equipment, regardless of the month of purchase, would be given a full year's depreciation.

Mr Lloyd said the decision to remove food from the GST by zero-rating would be of major benefit to the farm sector because it would stimulate demand for basis foods as their price to the consumer would fall.

"These measures will help our farmers and food processors win back the supermarket shelves from imports and thereby create more jobs for Australians."

Mr Lloyd said one of the key decisions on food was to include pure fruit juice in the range of food not subject to GST. Citrus and other horticultural producers presently carry the burden of fruit juice being subjected to a Labor Government sales tax.

"The present sugar tariff of $55 per tonne, for which there currently is no scheduled reduction, will remain at this level until some time in 1994 when the benefits of microeconomic reform are starting to flow."

The significance of the problems faced by the sugar industry was recognised by the Leader of the Opposition, Dr Hewson, in the Fightback! review, when he said the Coalition would make a separate statement on the sugar industry in the future following consultation with the industry.

Mr Lloyd said the abolition of sales tax, fuel excise and payroll tax would remove a hidden export tax of $1.7 billion from all exporters and increase the competitiveness of farm exports by about five per cent.

He said there will be an independent inquiry (not the Industry Commission) in 1996 to ensure that cost saving reforms are working. ___________

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COMMONWEALTH PARLIAMENTARY LIBRARY MICAH 20/ 12/92