In a pre-budget sweetener designed to encourage climate-friendly land practices, the Morrison government is offering Australian farmers working to lower carbon emissions tax relief worth an estimated $100 million over four years.
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Under the change due to start on July 1, a concessional tax treatment will apply to primary producers that generate revenue from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates.
Agriculture minister David Littleproud is to make the announcement on Monday just over a week out from the federal budget and two weeks after the carbon credit market plunged due to a government move to allow people to opt out of carbon credit contracts.
"We want to give genuine farmers more options when deciding to hold or sell their credits, whether for investment purposes or to enhance the environmental credentials of their operations, without being penalised," Mr Littleproud said in a statement.
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"This is removing barriers for farmers who want to do the right thing by their farm and the changes are expected to deliver $100 million to their bottom line over the next four years."
The announcement comes just over a week out from a federal budget which is widely expected to be a pre-election cash splash including a package specifically designed to address the spiralling cost of living pressures.
Minister for Emissions Reduction Angus Taylor said he expected the targeted tax relief for farmers would encourage carbon abatement activities while helping Australia meet its 2050 net zero emissions ambitions.
"The government is ensuring Australian farmers are rewarded for bringing down emissions," Mr Taylor said.
The Morrison government announced changes to the Emissions Reduction Fund (ERF) earlier this month to allow people to opt out of their fixed-delivery carbon credit contracts with the federal government and enter the far more lucrative open market.
The government said the tax relief flagged on Monday is designed to encourage more farmers to take part in the ERF and earn revenue from ERF projects.
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