Farmers are facing some of the worst drought conditions ever experienced, with the Government confirming 100 per cent of NSW is in a drought and over 60 per cent of Queensland is in drought or is drought-affected. The conditions have seen costs of stock feed and transport soaring. Sydney-based market analyst Nick Crundall said Australia is experiencing the “biggest domestic demand for feed grain that we’ve seen for at least 10 years,” and for the first time fodder from Western Australia has been shipped to New South Wales.
Unfortunately for many, there doesn’t look to be any reprieve until early 2019. Recent announcements by the Government of drought assistance measurements are certainly a good start to bring relief to many burdened by the ongoing situation.
The Department of Primary Industries has prepared a summary of various measures available which can be found here:
In addition, below is a breakdown of measures available across various organisations:
Help is available for drought-effected taxpayers across regional areas to manage their tax.
The ATO is allowing:
- More time to pay
- Waiving penalties or interest charged at a time the person has been drought effected
- Payment plans with interest free periods
- Adjusting PAYG instalments to better suit the person’s circumstances which may help those who have had to make forced cattle sales
- Tax incentives for primary producers
The ATO advises to still lodge activity statements and tax returns by the due date even if they can’t be paid.
The ATO will prioritise paying any income tax or activity statement refunds due to a drought affected person and in some instances they will release the person from paying some taxes if paying the taxes would cause serious financial hardship.
It’s worth keeping in mind that the ATO also offers immediate tax deductions for primary producers for new fencing infrastructure and accelerated depreciation is available for new fodder storage and on-farm water storage facilities.
The Farm Household Allowance scheme remains available, paying eligible farmers the equivalent of the Newstart allowance. This scheme is available for farmers who have net assets of less than $5 million. The estimated value of any owner’s residence is excluded from this valuation. Centrelink historically have not requested a formal valuation, and have accepted the farmer’s estimate of what the drought affected price may be.
The term of the payment is 3 years, or until the farm has returned to profitability. If you have previously applied for the payment and exhausted your 3 year time limit, the government has allowed you to apply for a 4th year.
The recent announcement by the Government is for two lump sum supplementary payments of up to a total of $16,000 to families and individuals who are currently receiving the Farm Household Allowance.
Ph. 132 316
Regional Investment Corporation
Drought loans of up to $1 million are available at a concessional interest rate of 3.68%. These loans are for a 10 year term, with the first 5 years being interest only. After 10 years the loan is refinanced with a commercial lender. The $1 million loan can be used to refinance existing debt (up to 50% of bank debt) or borrow additional funds for operating or capital expenses.
This scheme opened on the 1st July 2018.
An example of how beneficial this loan may be; a farmer with existing debt of $2 million at 5.68%, would be able to refinance $1 million at a rate 2% lower than their existing debt. This would save that farmer $20,000 per annum for 10 years.
This scheme could be a good opportunity for many and is available to a large number of farmers. There is no income or asset test. There is no fixed threshold for the amount of off farm assets a farming family can have, however it appears significant off farm assets may cause an issue. There is $250 million available nationally in this scheme which may be exhausted in a short period of time.
Ph. 1800 875 675
NSW Rural Assistance Authority
Drought Assistance Fund: $50,000 interest free loans are available to eligible primary producers to assist in implementing systems and management practices that enhance the sustainability of their enterprise. This includes transport of stock, fodder, water, and associated infrastructure.
Ph. 1800 678 593
Farm Innovation Fund
This scheme continues to offer farmers up to $250,000 at a 2.5% interest rate for 20 years (principal and interest). A reminder that a farming enterprise can have up to 2 of these loans (maximum $500k) outstanding. 12 months has to have passed between applications.
Farm Innovation Fund – Interest Charges: All existing Farm Innovation Fund customers, and all applicants who submitted an application on or before 30 July 2018 will have applicable interest charges for the 2017/18 financial year and 2018/19 financial year refunded.
Ph. 1800 678 593
Drought Transport Subsidies
NSW Government will offer a transport subsidy of up to $20,000 per eligible farm business. This actually equates to $30,000 over 18 months from the 1/1/18 to 30/6/19 because the subsidy has been back dated to the beginning of the year. It covers 50% of the full freight costs up to a maximum of $5/km and 1500 km per journey.
Ph. 1800 678 593
Waivers on government fees and charges
Various fees and charges will be waived for 2019 and most of them will be an automatic waiver. These include LLS rates, fixed charges for water licences and farm innovation fund interest. In order to receive the waiver on registration fees for class 1 agricultural vehicles you will have to apply via the Roads and Maritime Services.
Ph. 13 77 88
The team at Roberts & Morrow are here to help you, get in touch with us if you need assistance with any of the above measures. We have offices in Armidale, Glen Innes, Tamworth and Narrabri. Drop in to see us, call 02 6774 8400 or email firstname.lastname@example.org