Farmers are frustrated by the Federal Government’s refusal to consider a common-sense reversal of a decision in the May 9 budget that sees the instant asset write-off threshold lowered to $20,000 from July 1.
The changes will see thousands of farmers, tradesmen and small business owners worse off if they are awaiting late delivery of assets which have been already ordered and paid for.
This means that farmers who had ordered vehicles or equipment only had until June 30 to take delivery and so benefit from the current scheme.
NSW Farmers have lobbied the government for an extension to be given to farmers still awaiting deliveries of heavy machinery and vehicles.
NSW Farmers president Xavier Martin said many farmers would be caught short through no fault of their own but due to lengthy supply chain delivery delays.
“People have ordered expensive equipment and placed deposits or paid outright under the belief they could use the instant asset write-off,” Mr Martin said.
Federal Agriculture Minister Murray Watt wrote to NSW Farmers last week to advise no extension would be granted.
Mr Martin described the decision as “tin-eared” and that it would see farmers 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, will still be able to claim the write-off,” he said.
“As it stands, this decision comes at the worst possible time for business, with soaring inflation and costs.”
Under the changes, assets would now have to be depreciated over many years.
According to the ATO’s website, the current scheme has been long advertised to end on June 30, 2023.
At present there appears to be no limit to the asset threshold.
The tractor and machinery association of Australia has also been lobbying the government to consider reversal of the policy in the short term, but executive director Gary Northover said the concerns had been received with a “very flat bat”.
“If farmers have placed orders and then don’t benefit from the current scheme, then they may cancel their orders,” Mr Northover said.
“In an economy which is tapering anyway, this is the last thing that farmers need.”