vegetables

24R&D2015 Federal Budgetprovides opportunity andrelief to vegetable growersDrive TrainFOLLOWING THE RELEASE OF THE 2015 FEDERALBUDGET BY TREASURER THE HON. JOE HOCKEY MP,AUSVEG ECONOMIST STEVE RAZDAN EXAMINES THEKEY IMPACTS ON VEGETABLE GROWERS AND EXPLAINSWHEN THEY CAN EXPECT TO BENEFIT FROM THEANNOUNCEMENTS.with Steve RazdanAustralian vegetable growershave been sufferingfinancially for many years now,with increasing productioncosts and low retail priceshaving an adverse impact ongrower margins.This year’s Federal Budgetis expected to benefitvegetable growers throughoutthe country, as it includesprovisions for droughtassistance, infrastructuresupport, deductions on assetexpenditure and a boost totrade and employment.Drought reliefGiven the tough businessconditions facing Australia’svegetable growers, theycan simply not afford to beexposed to challenging naturalweather events such as aprolonged drought, whichhas been predicted to occurin Australia over the next fiveyears.In the 2015 FederalBudget, approximately $270million has been committed tocontinue to support droughtaffectedcommunities acrossAustralia and increase droughtresilience for growers in need.These measures includeconcessional loan schemesworth $250 million, which rollover existing measures and aresubject to an eligibility criteria.Additionally, $20 millionwill be spent to extend theaccess to social and mentalhealth services in communitiesaffected by drought. This iswelcome news as the impact ofdrought on the mental healthof rural communities is oftenneglected, but can have seriouswidespread ramificationswith suicide and depressionaffecting many farmers. Afurther $2 million will beavailable for an additional 10counsellors to assist farmersthrough the Rural FinancialCounselling Service.The government has alsooutlined a new package thatcommits almost $61 millionto support local infrastructureand pest management asa consequence of drought.This package includes a localgrants program that targetsinfrastructure projects with thegreatest potential to stimulatethe local economy and offerlong-lasting benefits. All of thesemeasures begin from 1 July2015 and will be provided overthe next four years.An opportunity to investThe government will alsoallow all primary producers toimmediately deduct expenditureon fencing and water facilities,such as dams, tanks, pumpsand windmills. Additionally,growers will be able todepreciate fodder storage assetsover three years, such as silosand tanks used to store animalfeed.Previously, growers hadto wait until 1 July 2016 topurchase the assets, whichmeans they would have to waituntil the 2017-18 financial yearto claim any benefit. However,the government announced on27 May that growers are allowedto purchase these assets fromthe night the Budget washanded down, and thereforeclaim deductions on theirupcoming tax return. Growerscan now reap the benefit ofthese investments almost twoyears earlier than anticipated, ifthe assets are purchased in thecurrent financial year.Any farm that runs a smallbusiness, i.e. with an annualturnover of less than $2 million,will be able to immediatelydeduct asset expenditure (inaddition to fencing, waterfacilities and fodder storage),provided the asset costs lessthan $20,000 and aids inbusiness operations. Thismeasure was applicable thenight the Budget was handeddown and is available until30 June 2017. Additionally,the government will reducethe company tax rate to 28.5per cent for companies withaggregated annual turnover lessthan $2 million.