04 Jul

Agriculture attracts big bucks

By Geoff

HIGH-INCOME earners tipped an estimated $1.26 billion into managed agricultural investments this year to offset their taxes.

Forest lots, olives, almonds and cattle herds dominated managed investment schemes with sales showing a 20 per cent lift on last year.

But project managers had to work much harder to achieve their figures this year, industry analyst Shane Kelly told BusinessDaily yesterday.

Mr Kelly, managing director of Melbourne agribusiness research house Adviser Edge, said a noticeable shift from forestry to horticulture and agricultural projects occurred during the eight-week investment season which ended last month.

“If you take Great Southern Plantations and Timbercorp out of the equation, it has been a pretty flat year,” Mr Kelly said.

“Project managers had to work hard to achieve sales in line with, or slightly above the previous year.”

Great Southern, Timbercorp and Gunns — the the biggest scheme operators — have diversified into new products over the past two years.

They include tax-effective tomatoes ripening in giant glasshouses in northern NSW, pearls in the Northern Territory, sandalwood, vineyards, olives, mangoes, almonds, truffles, even walnuts and cherries.

These ventures have sparked a new rural boom with the big project managers paying above-average prices for traditional farmland.

A Federal Government review of possible tax changes to the timber plantation sector was recently widened to include horticulture after complaints about taxpayer support for exotic agribusiness schemes.

Yesterday Mr Kelly revealed that Great Southern’s new sales increased from $365 million last year to $457 million, while Timbercorp’s new sales were up from $176 million to $321 million.

Both companies reported that growth was driven almost entirely by non-forestry projects that included almonds, olives and livestock.

Overall, Great Southern and Timbercorp accounted for just over 60 per cent of total investment inflows, Mr Kelly said.

He said timber investment was flat at $744 million, while there was significant growth in horticulture ($414 million) and agriculture ($98 million).

“This is the first time in six years that there has been a significant percentage shift away from timber and could be a sign of things to come,” he said.

Mr Kelly blamed investor concerns about high commissions and the changes to the superannuation rules in the federal Budget for affecting sales.

He said a major government review of the entire managed investment schemes sector was likely.

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