out to pasture
multi-tasking
Champion Jersey bull Tawa Grove Maunga-ET SJ3 retires to Taranaki. page 11
Six functions in one pass with new NZ-made implement. page 40
Rural NEWS
smart beef How a US uni’s beef will be made traceable from barn to basket.
page 16
to all farmers, for all farmers
JULY 19, 2011: Issue 496
www.ruralnews.co.nz
Stock tax changes loom p e ter bu r k e
THE GOVERNMENT is looking to close a loophole in the taxation system that allows switching between one livestock valuation system and another. The move appears prompted by smart accounting in the dairy sector, but a doubling in ewe prices means some sheep-and-beef farms could be seeking to make similarly advantageous switches. Jim Gordon, a policy manager at Inland Revenue, told Rural News that tax officials are hoping to put out an issues paper in the next few weeks with a view to getting the law changed. Most farmers are not switching between the two schemes, but change is needed to ensure there’s a clear perception of ‘fairness’ in the tax regime. At present there are generally two schemes farmers can register their stock under for tax purposes: the national
standard cost scheme and the herd scheme. The issue is not about the integrity of the individual schemes, but rather the ease with which farmers can move between the two schemes to their perceived advantage, he says. “The herd scheme regards the herd of animals as a capital asset, whereas national standard cost is obviously cost-
based and changes in value are on tax account. “The big issue is that it’s far too easy to leave the herd scheme. This was brought out in the 2008 peak in market values in dairy cows. Basically between 2007 and 2008 they went up by about $1000/head and in 2009 they came down by about $1000/head. “A number of farmers elected out of
the herd scheme in such a fashion that they took the tax-free increase of the $1000 and banked that as tax-free then took as a tax deduction the write-downs that started happening after that.” Gordon says farmers are the only business in New Zealand that in one year can value their second-biggest asset (after land) as if it’s a machine, and the next year value it as if it’s trad-
Where there’s a wills... Federated Farmers newly elected president Bruce Wills is looking to build relationships in Wellington, but won’t be afraid to rattle cages either. Pages 4&5.
ing stock. Reforms proposed will either lengthen the present election period to exit the herd scheme, or make people who are in the herd scheme stay there and not allow them to change to the national cost scheme. A draft paper is being prepared on which submissions will be sought before a Cabinet paper recommending changes is finally drawn up.
Road rule frustration set to go? RULES GOVERNING farm vehicles on our roads are likely to be reviewed. Industry sources tell Rural News the Ministry of Transport is to look at the regulations because contractors and farmers say they have failed to keep pace with machinery developments. Current laws make it unnecessarily difficult and expensive to take most modern machines on the road, say users. The width of many machines means pilot vehicles should escort them, and if a contractor has six such vehicles moving simultaneously, that requires six pilots. Convoys are prohibited. MoT staff are looking at the issues and are expected to make recommendations to the ministers of agriculture and transport towards mid 2012. to page 3
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FMG 0033 Tought Bastards_70x265_Rural News 1
8/7/11 8:39:53 AM