Agribusiness industry in favour of crackdown

Australia’s agricultural investment industry has reacted in favour of the recent crackdown by theAustralian Tax Office(ATO) and theAustralian Securities and Investments Commission(ASIC) to rid the industry of suspect operators.

Australian Olives director Tim Myers believes that the ATO and ASIC regulations has not only cleared the industry of unviable projects and returned a renewed strength to agricultural investments, it has also created an environment where investors can confidently invest in agricultural investments.

Myers says the crackdown could be compared to the ‘tech wreck’ of 2000 where the ‘dotcoms’ with no business plans or revenue streams were wiped out.

“The benefit to investors is that they can invest with confidence in the organisations that abide by ATO and ASIC regulations,” he says.

“Previously, a number of investors saw agricultural investments primarily as a tax deduction first and a way to generate returns second. Agricultural investment is fast becoming a major asset class like shares and property,” Myers says.

Another industry group showing favour for agribusinesses is Lonsec Alternative Research (LAR), who has handed down a ‘recommended’ rating to the 2002 Timbercorp Olive Project.

According to LAR, the ATO-approved tax effective agricultural scheme asks investors to outlay $18,000 over three years at 11.7 per cent after tax over the project’s 23-ear lifespan. When fully subscribed, the project will bring the company’s total olive grove area to 2000 hectares.

LAR general manager Marty Sammon says the strong management and corporate resources of the listed parent company give the project an edge in what’s shaping up to be a highly competitive olive market.