National Farmers' Federation

Clock is ticking for grace period on tax scheme

The National Farmers’ Federation (NFF) is ramping up its call for the Federal Government to extend the Instant Asset Write Off (IAWO) to help farmers unfairly caught out by the scheme’s cut off.

The IAWO and temporary full expensing arrangements allowed farmers and small businesses to immediately depreciate the full cost of new assets within a single financial year.

However, farmers must receive and install their new assets before 30 June 2023.

NFF President Fiona Simson said covid-induced disruptions in global supply chains had meant many farmers were still waiting for machinery ordered well before the deadline.

“There are farmers who ordered tractors and machinery in 2020 that still haven’t arrived,” she said.

“We now have situations where farmers can see their tractor through the port fence but customs processing delays are preventing access to the IAWO.

“In 2020, during the depths of the pandemic, Australian farmers made good faith investments in line with government policy. Now, due to factors outside their control, farmers are set to lose out.”

The NFF is asking the Government to provide a grace period for farmers who have invested in but not yet received their new assets by 30 June 2023.

In the recent Federal Budget, the NFF acknowledges the small steps from the government with the Small Business Energy Incentive and the revised IAWO, being extended a year but going from being an uncapped scheme to only applying to assets up to $20,000.

“This is cold comfort for Australian farmers who have invested hundreds of thousands of dollars in new tractors, machinery and assets they believed would arrive before the deadline. In most cases, new assets won’t comply with the new cap,” Ms Simson said.

“Surely the Government doesn’t have to be a Grinch on what is a reasonable solution that will go a long way to boosting farm profitability and productivity.”