The Assistant Treasurer and Minister for Competition Policy and Consumer Affairs, Chris Bowen MP, today released the findings of a review of non-forestry agricultural managed investment schemes (MIS).
The review examined the costs and benefits of non–forestry MIS, and assessed whether such schemes are an effective tool for attracting investment to rural and regional Australia. This included an examination of the way in which the tax system treats non-forestry MIS. The review was an election commitment of the incoming Government.
Seventy-nine submissions to the review were received in response to an issues paper released by the Government last August.
Among its findings, the review found that the existing tax treatment of non-forestry MIS could be viewed as sub-optimal from an economic perspective. However, the review did not definitively conclude whether this was producing distortions in the markets for land and water, or for the commodities that MIS produce. The review noted that there are a variety of different views from stakeholders on these issues.
"There has been significant debate regarding the effect of non-forestry MIS on regional communities, including in relation to the tax treatment of these schemes," Mr Bowen said.
"This report injects some evidence and analysis into this debate, and the Government will closely consider its findings.
"The Government will consider whether there is a need for changes to the tax treatment of non-forestry MIS in light of the recommendations of the Review of Australia’s Future Tax System."
The review was completed prior to the recent entry into voluntary administration of Timbercorp and Great Southern Limited. The findings of the review do not have any direct implications for the administration processes which are currently underway.
Forestry MIS were not included in the review, as they were subject to an extensive consultation process, leading to legislative change in 2007.
Mr Bowen thanked all those who made submissions for their contribution to the review.
The issues paper, submissions and review report are available at www.treasury.gov.au.