Australian farmers to receive tax breaks for upgrades

In light of a recent drought that's impacted much of Queensland and New South Wales, Treasurer Joe Hockey and his colleagues have taken measures to help farmers across Australia invest in upgrades.

New tax breaks for Australian farmers

During a budget speech on May 12, Mr Hockey announced that all farmers will receive tax deductions for spending money on improving water facilities. Additionally, the government will provide a three-year depreciation allowance for all expenses pertaining to fodder storage assets.

While these tax breaks could provide a number of benefits, they do bring up a few questions. For instance, if a farmer implements a new irrigation channel, will he have to notify his insurance provider? Will the channel automatically be covered?

As a general rule of thumb, it's best to keep insurance carriers in the know of any changes. That way, if new additions to the property are damaged, farmers can cover the costs of repairing them.

Fences to be included under tax breaks

During a press conference in Canberra, Mr Hockey and Finance Minister Mathias Cormann answered questions regarding the 2015 Federal Budget. Part of the discussion focussed on asset write-offs for farmers who build new fences on their properties.

Mr Hockey maintained that fences allow farmers to better utilise their land and improve outcomes. The write-offs will make fences more affordable for farmers to install.

"A lot of farmers actually don't erect fences, you know, because it becomes expensive," said Mr Hockey.

"This is a big productivity supporter. I mean, this initiative will help with self farming, which is far more productive and actually better for the environment. And it will also help a lot with pest control."

Still, what if a fence sustains damage? Will farm insurance provide cover? These are questions farmers should ask their carriers. In general, discussing policy details is always a good idea.