ICMSA believes Government must tackle volatility challenge in Budget 2017
The introduction of a Farm Management Deposit Scheme remains the ICMSA’s key Budget requirement, according to the organisation’s President John Comer.
“We discussed this matter face-to-face with Michael Noonan last Friday. It represents a viable means by which the scourge of volatility can be dealt with,” he said.
“Farmers must be given the opportunity of getting away from the boom and bust cycles, which have so characterised milk production in the past number of years.
“And it is up to national governments to ensure that these matters are addressed,” he said.
The ICMSA Leader confirmed that the Minister for Finance accepted the principle endorsed by the scheme.
It is a support measure that will require a minimal outlay on the part of the state. But whether or not the propose measure will materialise in the 2017 Budget remains to be seen.
ICMSA is also proposing the introduction of an income-volatility management tool modeled on the Australian Farm Management Deposits Scheme (FMDS).
This would allow a farmer to claim a tax deduction for farm management deposits in the income tax year in which they are made, the appropriate amount of the deduction is included in the tax assessable income in the income year the deposit is repaid to the farmer.
The deposits scheme complements other risk management strategies available to farmers such as income averaging.
Comer also believes that there is a possibility that Minister Noonan will announce a national top-up to the European Union exceptional aid package during his budget speech.
“This is allowed under the criteria set out for the support measure, again, we emphasised this point during last Friday’s meeting with the Finance Minister.”
Equalising Earned Income
The introduction of an Equalising Earned Income Credit is another target for the ICMSA in Budget 2017.
“We welcomed the introduction of an Earned Income Credit of €550 in Budget 2016 and believe it is a first step in addressing the anomaly that existed within the tax code with respect to the self-employed, including farmers,” said Comer.
The Government has committed to equalising this credit to the PAYE Tax Credit in successive Budgets.
ICMSA believes Budget 2017 should provide for an immediate equalizing of the Earned Income Credit by increasing it to €1,650 effective from 01 January 2017.