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  • Writer's pictureFlow Australia

Farmers want wriggle room on asset write-off deadline

The federal government has declined a request by farmers for a grace period to extend the tax write-off deadline for receiving newly purchased assets.

Farmers say the federal government's refusal to extend the deadline for the instant asset write-off will leave them short-changed.

The tax write-off and temporary full expensing arrangements were introduced by the previous coalition government as an incentive to stimulate the economy during the COVID-19 pandemic.

The tax relief was initially due to terminate on June 30, 2022 but was extended for 12 months by the former government in the 2021/22 budget. 

It meant producers and other business owners could write off purchases of up to $150,000 per asset.

But the write-offs don't apply until the product is delivered and with the deadline three weeks away, NSW farmers say thousands of small businesses are still waiting on orders.  

In a letter to industry group NSW Farmers, who had requested a further 'grace period',

Agriculture Minister Murray Watt said the government will not be extending it further.

"The economic outlook has evolved significantly since the introduction of TFE (temporary full expensing) and there is no longer a need for crisis levels of stimulus," Senator Watt said in the letter.

And he noted businesses may still qualify for a $20,000 instant asset write-off.

NSW Farmers president Xavier Martin said it was a disappointing decision that would see farmers, tradies and small business owners thousands of dollars out of pocket.

"The right thing to do would be a grace period where anyone who paid for a tractor or piece of equipment before the budget was handed down, but whose dealer can't get it to them by June 30," Mr Martin said.

The refusal has left NSW grain farmer Chris Holland anxious.

He ordered two headers worth around $1.8 million 12 months ago. The machines were meant to arrive in May but are now due at his property three days before the deadline closes.

A further delay could cost him hundreds of thousands of dollars.

"There's no guarantee, you know what can happen, the boat can arrive and it can sit there for a week off the port," he told AAP.

"We're working within the rules and doing the right things and doing what the government was incentivising us to do," he said.

"Things get delayed, but we're sort of just caught in the middle." 

The National Farmers' Federation's David Jochinke said many producers are still waiting for items ordered over a year ago to reach their property.

"Farmers and other business owners made investment decisions in good faith based on this write-off scheme," he said.

"Now they'll either lose the benefit of the write-off or lose whatever deposit they've paid through no fault of their own."

Senator Watt's office has been approached for comment.


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