27th February 2007The NSW Farmers’ Association has called again for the Federal Government to stick by its decision to remove tax concessions for agribusiness managed investment schemes (MIS).
The renewed attack is timed to coincide with the current political summit on national water management.
Chair of the association’s Conservation & Resource Management Committee, Louise Burge, says, “Upfront tax deductions for investors in MIS schemes have encouraged new, larg-scale irrigation projects, such as olives, grapes and other commodities.
“The increasing demand for water supply is impacting on agricultural enterprises in other regional communities.
“There are long-term ramifications for these communities which have invested large amounts of capital on water infrastructure and business investment on a fully commercial basis,” Mrs Burge said.
“Already, large quantities of water are being purchased out of existing irrigation regions in Northern Victoria and NSW and transferred to newly established schemes.
“System losses and delivery issues of that water have not been fully factored.
“Critics of the schemes also have increasing concern about the taxation advantages of these schemes and their impact in an already stretched water market.
“Access to tax distorted capital allows them to buy water at higher prices.
“Farmers operating on a fully commercial basis struggle to compete and may be forced out of the market.
“Any transitional arrangements will benefit operators of the (MIS) schemes, at the expense of regional Australia and will continue to allow investors to make decisions based on taxation advantages and not on full commercial return from the investments.
“With the Federal and State Governments currently discussing the future of water-dependent communities along the river systems, it is time to address the policies that create further pressure on the river system.”
SOURCE: NSW Farmers Association and The Land, NSW’s weekly rural newspaper
