Farm income deferment

Press, Volume CXII, Issue 33063, 2 November 1972, Page 2

Farm income deferment

(from Our Own Reporter)

WELLINGTON, November 1.

The Cabinet has approved an increase to the limit of deposits under the farm income equalisation scheme.

On the recommendation of the Agricultural Production Council the limit has been raised from 25 per cent to 40

per cent of assessable farm income for the current income year ending next March 31.

The Minister of Agriculture (Mr Carter) said the limit has been raised to encourage sheepfanners to make greater use of the scheme, in view of the substantial increase in incomes in prospect this season from the improved lamb and wool prices.

"There is no guarantee that prices will hold for next season, or indeed for the remainder of this season,” he said. “Rather than bring in entirely new measures, the Government is offering the alternative of a voluntary restraint on spending through an existing scheme.

"There can be no doubt that the extra income is badly needed by sheepfarmers to catch up on the many things that have been deferred, such as farm maintenance, topdressing, and restocking, but heavy expenditure in one season could put too much pressure on the available services and lead to increased costs,” Mr Carter said.

Mr Carter emphasised that there was a built-in guarantee that the scheme would not result in greater taxation being paid. Although the higher limit was prompted by the situation of sheepfarmers, the scheme was available to all farmers. An implementing regulation would be gazetted soon. Information about the scheme was available from the Department of Inland Revenue. A farmer would be able to deposit a maximum of 40 per cent of his assessable income, the minimum deposit being $2OO. Deposits were tax deductible in the year in which they were made, and refunds became assessable for tax when they were claimed. In general, deposits must remain for 12 months, but there was provision for earlier withdrawal, Mr Carter said. ,