Depreciation for farmers brought forward
Australian farmers can now claim a tax deduction on all capital expenditure on water facilities, fodder storage assets and fencing incurred since the 2015 Budget was handed down at 7:30pm on 12 May.
Farmers can fully deduct the cost of water facilities and fencing in the year they are purchased and deduct the cost of fodder storage assets over three years.
Australian small businesses got a boost on Budget night being able to immediately claim accelerated depreciation on business assets costing up to $20,000. Farms with turnover of less than $2 million qualify as a small business and are therefore also eligible to immediately write-off all asset purchases up to $20,000.
Following broad consultation, stakeholders told us they wanted to get on with building fences, dams and fodder storage as soon as possible.
Our decision to bring forward the start date of accelerated depreciation for all farmers, regardless of the size of their farm, allows them to prepare for drought and invest in the productivity of their farms immediately.
The measure builds on our more than $333 million in targeted support for farmers and communities impacted by drought announced by the Prime Minister on 9, May in Longreach, Queensland, taking the Government’s total commitments to farmers in this year’s budget to more than $400 million.
Supporting farmers in the hard times and boosting the competitiveness of the agriculture sector is not just good for the economy, it is also the right thing to do.
Bringing forward these changes to begin from 1 July 2016 to 12 May 2015 is estimated to cost $72 million over the forward estimates.
Further measures to support farmers who are preparing themselves for the damaging effects of drought will be announced in the forthcoming Agricultural Competitiveness White Paper.
We are excited to see more support for our farmers in the upcoming Agricultural Competitiveness White Paper.
For information on the new drought support measures go to www.agriculture.gov.au/drought.