State Government requests extension of scheme to cover agricultural contractors

3/11/06
The State Government this week requested that the Federal Treasurer expand the Farm Management Deposit Scheme (FMDS) to include agricultural contractors whose businesses were directly affected by adverse seasonal conditions.
Treasurer Eric Ripper said the FMDS was a tax-linked, risk-management tool that allowed primary producers to deal with variable income.
"The scheme currently enables primary producers to set aside taxable income in profitable years to be withdrawn, usually in lower income periods," Mr Ripper said.
"Farm management deposits provide tax benefits if kept for at least 12 months and interest is earned at market rates on the deposits' full amount."
Agriculture and Food Minister Kim Chance said agricultural contractors were a significant part of the rural business community and their financial stability, like primary producers, had a major impact on the regional economy.
"Adverse seasonal conditions, much like those being experienced right across Australia, affect not only primary producers, but also contractors who service the agricultural sector," Mr Chance said.
"An extension of the scheme to contractors would enable them to better manage their financial risk and thus have a positive flow-on impact in regional communities."
The Treasurer said the scheme had proved to be highly successful as a risk management tool for primary producers, enabling them to maintain cash reserves to help meet costs in low-income years.
"FMDS statistics for Western Australia show the number of scheme-holders and the value of the holdings are increasing in most of the eligible primary industries," he said.
"For example, the total number of scheme holders in WA has risen by 31 per cent since 2002 and the total value of the holdings has increased by 67 per cent."
Farm management deposits are offered through authorised deposit-taking institutions such as banks, building societies and credit unions.
More information on the FMDS is available from the website: http://www.daff.gov.au or from local banking and financial institutions.
Minister's Office - 9213 6700