Farmers want debt set aside

Press, 23 February 1989, Page 3

Farmers want debt set aside

Setting aside debt created by the South Island east coast drought is the key component of the rehabilitation package suggested by Federated Farmers.

It wants the debt set aside for five years, and serviced by the Government over that time, :

Drought-created debt is defined as the reduction in net working capital, including all stock on hand, between April .1 last year and March 31 this year, plus rehabilitation expenses.

The president of North Canterbury Federated Farmers, Mr Ness Wright, said the farmers also sought a Government guarantee that would enable financiers to keep providing seasonal finance.

He said farmers wanted a change in the law so that farmers’ tax losses could be counted as an asset in a farm’s financial structure. This would put farming on a similar basis to companies.

Federated Farmers was asking its members to approach the Inland Revenue Department. to ask for tax penalties to be waived and terminal tax payments to be deferred. Mr Wright said farmers were now faced with paying provisional tax on last year’s income while their resources were exhausted.

The package also obliquely comments on the proposed sale of the Rural Bank. Mr Wright said it was unjust that the sale of the bank might mean the end for many farmers who were in a bad way financially.