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2018 Spring - Tax and regulation for farm business sustainability

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Farm Policy Journal: Vol 15 No 3 2018 Spring - Full Journal - Tax and regulation for farm business sustainability

Australian Farm Institute (2018), Tax and regulation for farm business sustainability, Farm Policy Journal: Vol. 15 No. 3, Spring 2018, Surry Hills, Australia.
ISSN 1449–2210 (Print)
ISSN 1449–8812 (Web)


FPJ1503C - Freebairn, J (2018), Taxation for the economy and agriculture

FPJ1503C - Freebairn, J (2018), Taxation for the economy and agriculture, in Farm Policy Journal, vol. 15, no. 3, Spring 2018, pp. 1-7, Surry Hills, Australia.

After an overview of the different Australian taxes, the paper describes and evaluates tax base exemptions and lower rates which reduce the effective tax burden on agriculture. Agriculture sector-specific tax base exemptions include Farm Management Deposits, land tax, and basic food from the GST. Economy-wide small business tax concessions (including for some capital gains, accelerated depreciation and lower income tax rates) favour agriculture with its relatively high share of small businesses when compared with other sectors of the economy. Potential reforms to the current clumsy special taxes on alcohol products and motor vehicles would alter effective tax rates within the agricultural sector.


FPJ1503E - Miller, D & Shaw, A (2018), Tax policy considerations for Australian agriculture

FPJ1503E - Miller, D & Shaw, A (2018), Tax policy considerations for Australian agriculture, in Farm Policy Journal, vol. 15, no. 3, Spring 2018, pp. 9-23, Surry Hills, Australia.

Australian agriculture is a notably volatile industry from the environmental and market perspectives. It is in the nation’s interest to have a continually improving tax system that delivers taxes that are ‘lower, simpler and fairer’ and this paper contains some principles and perspectives on what needs to be considered by governments in delivering this outcome in an agricultural context.
While agriculture pays relatively low rates of tax compared to other sectors, this should be viewed in the context of the extensive secondary economic activity built on the sector and low levels of public funding support, relative to the global landscape.
Individual primary producers have limited capacity to pass on increased tax burdens to their customers and largely absorb these costs, detracting from their capacity to lift employment, productivity and profitability. A fairer taxation system should also consider the intersection between the tax and transfer system and should provide a welfare safety net with appropriate assets and means tests that do not act against efforts of primary producers to be self-reliant.
This paper will outline several principles concerning the taxation of agriculture, with a focus on Queensland’s broadacre agriculture sector, and provide commentary on some of the specific agriculturally-relevant elements of the current tax system.
For the future viability and sustainability of agricultural enterprises and of rural, regional and remote communities, it is important that their unique features and needs are considered and incorporated effectively into any reformed taxation system.


FPJ1503B - Wibberley, BD (2018), Using FMDs to create sustainable farm businesses

FPJ1503B - Wibberley, BD (2018), Using FMDs to create sustainable farm businesses, in Farm Policy Journal, vol. 15, no. 3, Spring 2018, pp. 25-33, Surry Hills, Australia.

Farm Management Deposits (FMDs) were designed by the Australian Government to allow farmers to manage their cash flow risk while conducting their business in uncertain climate, environment and market conditions.
Unfortunately, much of the focus and attention on FMDs in recent years has been on the taxation benefits these financial products provide the business.
The aim of this article is to outline and demonstrate that where primary producers implement a suitable FMD strategy to suit their business, they become an essential tool to manage financial risk for wealth creation, consolidation, expansion and the overall family business success.


FPJ1503D - Martin, P (2018), Australia needs a feasible business model for rural conservation

FPJ1503D - Martin, P (2018), Australia needs a feasible business model for rural conservation, in Farm Policy Journal, vol. 15, no. 3, Spring 2018, pp. 49-55, Surry Hills, Australia.

This paper discusses the effectiveness, fairness and viability of the business model Australia uses to slow the inexorable decline in rural biodiversity. Ongoing poor environmental outcomes create political pressures for tighter farm regulation, which fuels a movement against ‘green tape’ to reduce the increasing costs and complexity of regulation and administration. All other things being equal more protection will require more resources from rural Australia, and this is beyond its capacity to provide because of economic and demographic fundamentals and climate. Government support is also vulnerable to economic and political pressures, and often leads to high transaction costs and other problems for the very people who try to do the right thing. The ultimate result of insufficient resources (and conflictual politics) is thus inequity and inefficiency, and poor environmental outcomes, a ‘lose-lose’ outcome for everyone.
The potential for a more viable resourcing model or more efficient instruments and administration is given very little attention, though all sides would benefit from this. A more feasible model that spreads the load further, is more reliable in the face of commodity income and political volatility, and reduces the transaction costs of environmental protection, would make better outcomes more likely for everyone. It is difficult, but possible, to create such a model.










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