Farmers have won generous tax discounts for drought preparedness while rural communities will benefit from an Australia-wide electorate-based funding program called “stronger communities” under changes announced in the budget.
Farmers will be able to fully deduct the unlimited capital costs of fencing and water facilities to improve drought preparedness, the 2015 budget says.
Water facilities include infrastructure such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.
The accelerated depreciation package is expected to cost $70m over the next four years.
It also allows farmers to depreciate capital costs on fodder storage assets such as silos and tanks over three years.
Currently, fencing has been depreciated over 30 years, fodder storage over 50 years and water facilities over three years.
The agriculture minister, Barnaby Joyce, said the changes, which apply from 2016-17, would mean “more money in farmers’ pockets sooner”.
“Drought preparedness was a key priority identified as part of the agriculture competitiveness white paper process and these accelerated depreciation measures will create an incentive for farmers to undertake on-farm preparedness activities and increase productivity,” Joyce said.
The new measure adds to a $333m drought support package released last weekend by the prime minister, Tony Abbott. It included a $35m infrastructure and employment package for drought-affected communities, $25.8m for pest and weed management, $20m to increase access to mental health and community support services, and an extra $1.8m to the rural financial counselling service.
The government will also roll over existing funding for the current concessional loan schemes for a further 12 months to 30 June 2016.
It has also committed to a “stronger communities” package worth $22.5m a year to deliver “social benefits to the local community”.
Every federal electorate will share $150,000 a year over two years for programs to support local cohesion and participation.
The budget papers say the programs will be identified “in consultation” with local members and that successful grants must be completed within two years from 1 July 2015. Grants of between $1,000 and $20,000 will be available to “community organisations that are reputable and genuinely not for profit”.
The program comes on top of the $1bn stronger regions fund, which replaced Labor’s regional development grants for economic development. While the regional development Australia committees still exist, the government has cut $3.6m from their “activities”. The government notes the savings will be redirected to “repair the budget”.
