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Farmers draw down cash reserves in December quarter
23 May 2005
Farmers drew down for a second quarter in a row in late 2004 on their tax-advantaged cash reserves held as farm management deposits. Statistics from the Department of Agriculture show that at the end of December, 41,600 farmers had $2.28 billion in FMD accounts. Withdrawals exceeded deposits by $350 million during the quarter. Under the scheme, farmers can deposit farm income into special bank accounts instead of being taxed on it. Tax is not paid on the money until the year it is withdrawn. This encourages farmers to put money away when incomes are high and allows them to withdraw it, to be taxed potentially at a lower rate, when they are making a loss or reduced profits.
The Age, 23/05/05
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