Drought-proof cash for farm business plans

Posted on 9 July 2020
Drought-proof cash for farm business plans

Matt Coughlan
(Australian Associated Press)

Farmers' financial skills and drought research will receive a boost through a $3.9 billion fund designed to prepare Australia for future crippling dry spells.

Almost $90 million from the first annual $100 million Future Drought Fund payout has been allocated across a range of drought-proofing programs.

A $20 million program will help farmers develop and improve detailed business plans.

Agriculture David Littleproud says the scheme was designed to do more than put together a budget.

"This is about risk management tools, about understanding how you can hedge your products in international markets," he told ABC television on Wednesday.

Farmers will get improved climate data to guide decision-making through a $10 million boost for digital information services.

National Farmers' Federation president Fiona Simson welcomed the focus on managing financial and climatic risks.

"As a nation, we have not yet got drought preparation, management and recovery right but today represents a landmark step towards significant improvement," she said on Wednesday.

More than $20 million will be spent on drought research while $15 million will be funnelled towards natural resource management.

Alliances of local councils will be able to share in $10 million to develop regional drought plans.

"These programs will give farmers and communities the tools they need to prepare for, manage and sustain their livelihoods during droughts," Mr Littleproud said.

Labor has previously criticised the fund for spending just $100 million a year from 2020 despite being first announced at the height of the drought in 2018.

The Future Drought Fund is expected to rise from an initial $3.9 billion to $5 billion in 2028/29.

Posted in: News  

Overseas travel recovery 'years away'

Posted on 8 July 2020
Overseas travel recovery 'years away'

Christine Flatley
(Australian Associated Press)

The head of Flight Centre has warned it could be three years before international travel returns to pre-coronavirus levels.

Graham 'Skroo' Turner says government policy around COVID-19 restrictions will determine how quickly the domestic industry bounces back, but those eyeing an overseas holiday will likely wait a lot longer.

"It's really up to the government on this sort of thing, and if they ease restrictions it will come back fairly quickly," he told ABC radio on Wednesday.

"Maybe 18 months to two years (international travel) might be back to 70 per cent, but it'll probably be three years before it's back to pre-COVID levels."

Mr Turner said the current policy requiring any returning international travellers to self-fund a two-week quarantine period in a hotel is a major deterrent.

He said other protocols such as pre-testing travellers and then re-testing them upon entry into Australia could be put in place instead.

"I think the protocols, pretty soon, will be to the stage where it will be probably nearly as safe as a two-week quarantine in a hotel," he said.

Flight Centre has stood down around 16,000 staff globally since the pandemic emerged at the start of the year.

Other major tourism players, such as Virgin and Qantas, have also been forced to shed thousands of staff as flights are grounded.

Mr Turner called on the federal government to either continue the JobKeeper wage subsidy program for the industry, or to implement a new scheme to help keep it afloat.

"I think it will be necessary, not just for travel, but for airlines and all tourism operators otherwise hundreds of thousands of jobs are going to be permanently lost for sure."

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Treasurers asked to consider GST reform

Posted on 7 July 2020
Treasurers asked to consider GST reform

Paul Osborne and Katina Curtis
(Australian Associated Press)

A major review has called for a lift in the GST rate or a broader base, 20 years on from the introduction of the consumption tax.

But the architects of the tax warn the mammoth political task to change it shouldn't be done just to give governments more money to spend.

A six-person panel led by businessman David Thodey released a draft report of its review into federal financial relations on Wednesday.

The review was commissioned by NSW Treasurer Dominic Perrottet in 2019 but is expected to be influential as all governments consider tax reform and other ways to improve the federation amid the coronavirus pandemic.

The GST rate has stayed at 10 per cent, but the share of household spending subject to it has fallen from 60.8 per cent in 2001/02 to 55.4 per cent in 2018/19.

The review recommends state treasuries, in consultation with the Commonwealth, "assess and agree options for lifting the GST rate and/or expanding the base over the medium to longer-term".

Some of the revenue gained from changes should go to lower-income households.

The review also calls for the replacement of stamp duty with broad-based land tax, as has occurred in the ACT, as well as a national approach to payroll tax reform.

Former federal treasurer Peter Costello says the nation's taxes needs constant care and maintenance but the GST shouldn't be broadened or lifted for its own sake.

"People are saying let's increase the rate to do what?" he told ABC's Radio National.

"If all you bought, for example, was a slight reduction in the deficit, I don't think it would be worth it.

"But if by changing a rate or introducing a new tax you could abolish, I don't know, five other taxes, if you could radically reduce income taxes, if you could improve the company tax system now you're talking about something worth doing."

He said it was easy for states to call for changes to the GST because they didn't wear any of the political heat.

John Howard says it would be desirable to broaden the GST base and perhaps also increase the rate.

"But when and where, how and when that occurs, I'll leave to Scott Morrison and Josh Frydenberg," he told 2GB.

Australians could be persuaded to back reform if they could be convinced it was good for the country and poorer people would be supported, the former prime minister said.

Posted in: News  

Manufacturing slowly recovers in June

Posted on 6 July 2020
Manufacturing slowly recovers in June

(Australian Associated Press)

Australian manufacturing activity has expanded for the first time since February, mainly led by new orders in the food and beverages industry as trading restrictions ease.

The Australian Industry Group Performance of Manufacturing Index jumped 9.9 points to 51.5 in June, recovering from the depths in April and May when restrictions to check the spread of coronavirus had been imposed.

A reading above 50 points indicates expansion with higher results reflecting a faster rate of expansion.

The result is the largest ever monthly rise and follows the largest ever monthly fall in April.

Despite the positive result, conditions haven't really turned buoyant, with five of the six manufacturing sectors contracting for the month.

Almost all of the improvement in June was concentrated in the large food and beverages sector, with new orders from food wholesale distributors as restrictions were gradually lifted on cafes and restaurants.

The machinery & equipment sector also enjoyed a spike in sales with end-of-financial year buyers taking advantage of the expanded instant asset write-off provisions.

However, the building materials, metals and chemicals sectors remained in contraction.

Manufacturers supplying locally-made metal products and building materials to the construction industry reported a sharp reduction in new orders.

Employment stabilised after the contractions of the previous two months, improving to 49.6.

Wage levels also levelled off, up 4.2 points to 49.8, after the fall recorded in May.

"We are still well short of a recovery even with the quantity of fiscal stimulus in the economy and the next couple of months will provide a critical test of how well the economy is positioned to cope with the withdrawal of stimulus currently scheduled for the end of September," Ai Group Chief Executive Innes Willox said.

Posted in: News  

Tax office targets coronavirus fraudsters

Posted on 26 June 2020
Tax office targets coronavirus fraudsters

Daniel McCulloch
(Australian Associated Press)

Fraudsters taking advantage of coronavirus stimulus measures have been put on notice.

The tax office is cracking down on people exploiting JobKeeper payments, early superannuation release and business cash flow schemes.

Anyone caught breaking the law could face massive fines or jail time.

The ATO has uncovered intelligence about a number of dodgy tactics, including people withdrawing super and redepositing it to receive a tax deduction.

Others are fudging their personal finances to apply for the hardship program.

The ATO is also eyeing off employers manipulating their turnovers to receive JobKeeper wage subsidies, along with businesses pulling shifty tricks to maximise cash flow injections.

Deputy Commissioner Will Day said the ATO generally worked on the assumption people acted honestly, but would conduct checks later.

"If you've received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us," he said on Tuesday.

"It is much better to come forward to make a voluntary disclosure than waiting to be audited."

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