NSW cotton growers will be able to manage their on-farm risk more effectively from January 2018 thanks to a move by the NSW State Government to remove stamp duty on insurance.
Cotton Australia General Manager, Michael Murray, welcomed the announcement in the recent NSW Budget that it will remove the existing 2.5% stamp duty on crop and livestock insurance, which includes multi-peril insurance products.
“Earlier this month we wrote to Treasurer Dominic Perrottet requesting the removal of this stamp duty, arguing it was a significant disincentive for farmers to manage their own risk,” Mr Murray says.
“NSW farmers face significant challenges just to run their rural businesses day-to-day, and risks such as natural disaster, fire, weather impacts and other hazards lurk over their heads constantly.”
“Insurance products to manage these risks are available but they can be expensive, and taxation on top of their already high costs puts them out of reach of many growers.”
“We welcome the NSW Government’s initiative to remove the 2.5% stamp duty on crop and livestock insurance from January 1, 2018, and thank Treasurer Perrottet and Minister for Primary Industries Niall Blair for this initiative. It will be a welcome relief to many farmers and, hopefully, will put insurance within their reach and allow them to manage their daily risks with more certainty.”
Mr Blair says farmers paying between $25,000 and $50,000 a year on multi-peril crop insurance would save about $1250 per year (excluding GST) once the stamp duty was abolished.
“While our stamp duty rate is low compared with other states, removing it is an important signal to make from a government that is serious about reducing red tape and regulation for our agricultural sector,” Mr Blair says.
“Farmers will save money on insurance premiums from the removal of stamp duty on insurance against damage to crops, livestock and equipment.”
“Abolition will commence on 1 January 2018. This gives insurers lead time to change their systems.”
Source: Cotton Australia