The Government will allow all primary producers to immediately deduct capital expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Currently, the effective life for fences is up to 30 years, water facilities is 3 years and fodder storage assets is up to 50 years.
The measure aims to improve resilience for those primary producers who face drought, assist with cash flow and reduce red tape by removing the need for primary producers to track expenditure over time.
The Government noted that further measures to support farmers who are preparing themselves for the damaging effects of drought will be announced in the Government's forthcoming White Paper on Agricultural Competitiveness.
Date of effect
The changes will be for income years commencing on or after 1 July 2016.