Economy package causes confusion

Press, 16 December 1985, Page 1

Economy package causes confusion

The Government has been asked to clarify several points of last week’s economic statement.

The i president of Federated Farmers, MiV Peter Elworthy, said last evening that there was much confusion about several issues in the farming package. The most important, which had to be clarified urgently, was that of the new standard value system for farm stock.

The new system, said Mr Elworthy,.meanLthat as the value of stock went up oh a farmer’s books, the farmer had to pay more tax on it.

Finer details on the package were not understood by farmers, and had not been explained properly, he said.

Inquiries to the Ministry of Agriculture had not clarified the points for fanners either.

, “We must know urgently what it means. Farmers are making investment decisions on these things.” Mr Elworthy said he had talked to the Minister of Agriculture, Mr Moyle, yesterday and asked him to make a statement.

Mr Moyle could not be reached for comment last evening. “The meetings that the Ministers are going to are supposed to explain these quite complex measures to farmers. It is my understanding that they failed to do that at the Christchurch meeting (on Friday),” he said.

Two more such meetings

were to be held today in Whakatane and Gore, and Mr Elworthy said he hoped that things would then be made clear to farmers. Meanwhile, foresters are considering not felling trees until the Government clarifies the economic statement

Mr David Haslam, chairman of the Canterbury Forestry Foundation, said last evening that the statement was not clean It appeared that part or all costs of forestry, whether . by companies, individuals of farmers, would be treated as capital expenditure and not tax deductible. That would be a disincentive in j itself, but the statement also suggested

that at the time ,of harvest returns from forestry would be treated as taxable income. “It’s clearly apparent the effect will be to stop new plantings after 1986 and will mean harvested plantations will not be replanted,” Mr Haslam said. . . .. This had serious implications for the short-term supply of logs and industry would rapidly feel the effect of logs being withdrawn. The foundation was considering advising, members to avoid felling ;irees until the situation" had been clarified and the Government’s attitude towards the treatment of forestry became more equitable.

Further report, page,4