Louise Pratt (WA, Australian Labor Party, Shadow Minister for Environment and Water (Senate)) Share this | Link to this | Hansard source

The Treasury Laws Amendment (Supporting Australian Farmers) Bill 2018 is a bill that has Labor's support. It amends the Income Tax Assessment Act 1997 to allow immediate deduction, rather than deduction over the course of three years, of the cost of fodder storage assets, such as silos and hay sheds, that are used to store grain and animal feed.

The government has made the case that it will assist primary producers by making it easier to invest in these assets. We know that this measure was announced on 19 August and applies to fodder storage assets first used or installed ready for use on or after that date. The economic impact of that measure on our fiscal bottom line is $75 million over the forward estimates.

While we on this side of the chamber are supportive of this measure, we do note what we have found to be the haphazard approach that the government has taken to the drought that many Australian farmers are unfortunately suffering from. Firstly, there was the increase in the farm household allowance payments from three years to four years, effective from 1 August this year. Then, a few days later, on 5 August, the government announced a $190 million drought package, claiming that it provided immediate financial support to farming families and their communities.

Frankly, given that the additional funding did not start flowing on 5 August, this is a bit of a stretch. We are yet to see how many farmers will actually access the farm household allowance supplementary payments. As the member for Hunter, the shadow minister for agriculture, has pointed out, there is in fact a real risk that farming families will miss out. They'll miss out on the full $12,000 because the government insists on splitting the payment and denying farmers the possibility of getting a lump sum payment.

In his second-reading speech, the Assistant Treasurer made mention of increased funding for mental health support, something which, of course, would be welcomed by both sides of the Senate, yet it was just last week that the new Prime Minister tweeted what was found to be an extremely insensitive video that claimed that drought 'is a necessary evil' that can help cut the 'bottom 10 per cent that shouldn't probably be there anyway'. This is not a message that struggling farmers need to hear at this time of crisis. We've called on the Prime Minister to apologise and to remove the video, but he has refused to do so.

So to go to the tax aspect of the measure before us this afternoon, we on this side of the chamber support the principle that more rapid depreciation—what's known in the US literature as 'immediate expense'—can be good policy. Labor supported the government's instant asset write-off, and we did so noting that this government had scrapped Labor's instant asset write-off and then put in place their own instant asset write-off. On top of the instant asset write-off Labor has announced an Australian investment guarantee; it's an asset write-off that delivers for all companies investing in Australia. It's a much more targeted policy, stimulating and supporting the economy, than an across-the-board company tax cut.

I'd like to place on record today in the chamber that work carried out by Victoria University suggests that if you're after investment, then the best bang for your buck of an investment guarantee of more rapid expensing is three times larger than a company tax cut. Labor's Australian investment guarantee also has the benefit for firms that it is permanent and permanently accelerating depreciation for all companies, thereby ensuring that we're able to improve the investment pipeline that businesses deliver. So while I reiterate Labor's support for the bill here in the Senate for the supporting Australian farmers bill that targets these asset write-offs to farmers, it really does demonstrate that the government should consider the need for such measures across other parts of the economy. Thank you.

Anne Ruston (SA, Liberal Party, Assistant Minister for International Development and the Pacific) Share this | Link to this | Hansard source

I thank Senator Pratt for her contribution, and commend the bill to the Senate.

Question agreed to.

Bill read a second time.