No tax breaks on multi-peril crop insurance

No tax breaks on multi-peril crop insurance | Insurance Business

No tax breaks on multi-peril crop insurance

A few weeks before the results of a review into the failed $20.2m multi-peril crop insurance (MPCI) rebate scheme are released, the federal government has ruled out offering tax breaks to encourage Australian growers to get insured.

The MPCI rebate scheme was rolled out in 2016, offering eligible farmers $2,500 rebates for the upfronts costs of applying for and securing the insurance. It has suffered low uptake, however, with only 67 farmers claiming rebates, totalling $147,500 since then.

The federal government had been urged to enforce a tax break of up to 150% on MPCI to increase insurance uptake, but Agriculture Minister David Littleproud’s office ruled it out, The Weekly Times reported.

“The coalition government has been clear tax breaks — such as a 150% depreciation — are not being considered,” a spokesman for Littleproud told the publication. “The review of the program is finishing and we expect to see advice on it in coming weeks.”

The review was commenced by the Department of Agriculture last August; while the government slashed $5m from the program's budget in December, leaving about $6m for its remaining two years.

According to a department spokesman, the review, which also looked into barriers to MPCI, was being finalised. Analysis released by consultants Deloitte cited high insurance premiums as the top reason preventing MPCI uptake, with an estimated 1% of NSW's winter crop farmers getting covered.

Andrew Weidemann, Grain Producers Australia chairman, said the tax breaks could have helped to “significantly establish MPCI in Australia.”

“It looks like it is coming to an abrupt end,” Weidemann told The Weekly Times. “Clearly the current program isn’t working to deliver the outcomes we were expecting.”

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