Minister firm on new livestock tax scheme

Press, 1 July 1986, Page 2

Minister firm on new livestock tax scheme

Wellington reporter

Deferring a new livestock taxation scheme would only make matters in pastoral farming worse, according to the Minister of Finance, Mr Douglas. The difficulties being faced by pastoral farmers were partly the result of over-investment in traditional pastoral farming, encouraged by tax concessions such as the present standard value system. Deferring the introduction of new livestock taxation schemes would only distort farmers’ invest-

ment choices at a time when many of them were trying to diversify, he said.

The new schemes would provide a more neutral tax system and encourage investment to be based on market returns rather than tax concessions. The Government had approved a number of important changes to the schemes — including the introduction of an optional cost basis of valuation and a transition involving the immediate write-off of 100 per cent

of the assessable income resulting from write-up from the old standard values to the new trading stock standard values for stock owned before December 12, 1985.

Mr Douglas said that with the introduction of cost options, farmers would have three schemes to choose from. These transitional measures were generous and would help farmers adjust to a more businesslike market-orientated approach to farming, he said.