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Fonterra Shareholders' Council Says Tax Attack a Cheap Shot

Fonterra

Wednesday 18 May 2011, 4:23PM

By Fonterra

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Fonterra Shareholders’ Council Chairman Simon Couper said it was very disappointing to see dairy farmers made the target of a cheap shot that ignores the facts.

In an article today The Dominion Post questioned whether farmers were paying their fair share of tax.

“Dairy farmers work very hard in difficult conditions, dealing with the weather, swings in the value of dairy commodities, rising on-farm costs and the ups and downs of the New Zealand dollar,” Mr Couper said.

“Farms are businesses like the corner store or the panel-beating shop. They incur very substantial business costs such as labour, electricity, feed, fertiliser, vehicles and on-farm equipment.”

“Many also have massive debts to service. The reality is, if a farm doesn’t make a profit, it doesn’t pay tax.”

Mr Couper said the tax bill for individual farms varied enormously.

“Tarring every dairy farmer with the same brush in this way is unfair and irresponsible. Zeroing in on 2009, which saw the lowest payout in three years, is very misleading. The majority of farmers will pay tax this season.”

Dairy NZ figures showed the average tax paid by dairy farmers over the last decade was $28,225.

“As NZIER’s report last year showed, dairy farmers spend around 50c in every dollar they receive on locally produced goods and services,” Mr Couper said.

“Dairy provides 26% of our exports, and every tonne of dairy exports helps reduce the current account deficit, bringing down interest rates and reducing mortgage payments for homeowners.”