The Australian Government is evaluating the Farm Management Deposits Scheme (FMDS) to see if it is working to its underlying purpose
The scheme known as FMDS, was first introduced in 1999 to encourage primary producers to set aside pre-tax income in good times to cover low-income years.
It appears after 22 years farmers are encouraged to have their say on an evaluation of the Farm Management Deposits Scheme (FMDS) to ensure it meets the needs of users and operates efficiently.
The scheme allowed eligible primary producers to set aside up to $800,000 in pre-tax income to draw in future years when needed.
The Department of Agriculture, Water and the Environment was undertaking the evaluation as part of the Australian Government’s Drought Response, Resilience and Preparedness Plan.
The fundamental role behind FMDS’ is to help farmers deal with the fluctuating income streams that come with climatic variations and changing market conditions.
Its aim is to allow farmers to build financial self-reliance, manage risks and prepare for tough times.
Farmers can now have their say on how well the FMDS works and how it should work into the future.
The evaluation provides an opportunity to determine what areas need improving.
It is one of a number of tax measures designed to assist our farmers improve cash flow and provide an incentive for improved risk management.
The aim of getting farmer comment is to get the settings right to ensure it remains a fit for purpose tool for farmers.
The evaluation report will be provided to government for consideration mid-year, 2021
For more information or to Have Your Say about FMDS’ go to: https://haveyoursay.awe.gov.au/farm-management-deposit-scheme-evaluation
Farm Management Deposits Scheme (FMDS) was introduced
The FMDS, established in 1999, is the Australian Government’s flagship tax measure helping farmers to prepare for income downturns, including those caused by drought.
Eligible primary producers are able to set aside up to $800,000 in pre-tax income to draw in future years when needed.
Balances held in FMD accounts have increased steadily over the past decade to $5.3 billion (as at 31 January 2021). But there has been a 6% decrease in balances over the past 12 months to 31 January 2021. The FMDS is a key element under the 2018 National Drought Agreement, which commits the Commonwealth to providing continued access to incentives that support farming businesses’ risk management, including taxation concessions, the FMDS, and concessional loans.