Australian farmers are set to be given access to tax breaks for the purchase of comprehensive crop insurance, according to reports.
Agriculture minister, Barnaby Price, will release his long-awaited blueprint for the future of the agriculture industry in Australia soon and is expected to include “major tax benefits” for farmers that take out a comprehensive crop insurance policy, according to The West Australian.
The paper reports that one of the key recommendations Joyce will back is the “introduction of a refundable tax offset scheme for all eligible expenditures on crop insurance.”
A recent taskforce set-up by Grain Producers Australia found that a crop insurance tax benefit would introduce much needed capital into the market and help create stability for the agriculture industry which is often blighted by extreme conditions.
Accounting and advisory firm RSM Bird Cameron was part of the taskforce and their director, John Thomson, tols The West Australian
that the new recommendations to be set-out by Joyce are not another handout.
"It is not designed to be another government handout," Thompson said.
"From a cash flow perspective it effectively halves the cost of premium.
Thompson noted that by utilising crop insurance, farmers can help reduce the volatility which can have a serious effect on the industry and will, in-turn, increase output.
"What we have modelled is that if we can take out losses for our most productive farmers, they will then engage in more productivity innovation."