12 Jul 2013

Govt changes tax rules to help farmers with cost of planting

6:26 am on 12 July 2013

The Government has changed tax rules to help farmers with the cost of planting alongside their waterways.

It's amended the Income Tax Act 2007 so that the trees and shrubs planted along farm creeks and rivers can now be deducted as an operational expense.

Conservation Minister Nick Smith said the Government wants to encourage farmers to do more environmental planting.

He said the anomaly in the law currently is that if a farmer plants trees for the purpose of a shelterbelt or for a forestry plantation then it's deductible, but if it's for the purpose of nutrient sediment or nature then it is not.

Dr Smith said the change is significant and sends the right signal to the agricultural community that the broader task around conservation must be done in partnership with farmers.

He said the Government's prepared to lose some tax revenue to provide the right sort of incentives for farmers to be good environmental stewards.

Dr Smith said he's really impressed with rural New Zealand's attitude to dealing with the huge problem of water quality - and says the tax change is just the Government doing its bit.