Media Releases The Hon Wilson Tuckey MP Minister for Forestry and Conservation
AFFA99/102TU 21 September 1999
New Business Tax System Good News For Foresters - Tuckey
The Federal Minister for Forestry and Conservation, Wilson Tuckey, said the Howard Government had listened to the concerns of the vital forest industry sector in rural and regional Australia that provides jobs to 84,000 Australians in announcing the details today of the new business tax system.
The business tax reform package is very good news for the forestry industry.
There is no change to the immediate deductibility provisions for plantation establishment. The deductibility for plantation establishment costs will be retained in the financial year of the establishment of the trees. This decision will be a major enhancement to the Government's 2020 Vision plantation policy that will work to see three million trees in the plantation estate by 2020.
The retention of immediate deductibility provisions will work to encourage regional development, promote the diversification of farm income by encouraging farmers to plant a percentage of their properties with trees and open up the possibility of carbon sequestration.
Further, there is no change to the tax treatment of timber assets as plantations grow. Under these provisions no tax will be payable until income is derived from the plantation.
Recommendations to be considered by the Government as part of stage two of its response to the Ralph Review would have a beneficial effect on situations in the timber industry where a 'right to harvest' is sold separate to land ownership.
The business tax reform would provide an important marketing option for small-scale private growers engaged in farm forestry or plantations by removing the possibility of double taxation. The forest industry will also benefit generally from:
lower company tax; and reduced capital gains tax.
The new depreciation system will dramatically reduce compliance costs; in particular for the many small and family owned sawmills throughout Australia. To the benefits outlined under the new business tax arrangements can be added the $600 million a year savings to the timber industry with the ANTS (A New Tax System) enacted recently.