THE Rudd government is unmoved by complaints from farmers, horse breeders and other agricultural industries that rural communities will be hurt by a $700 million crackdown on tax breaks for "hobby farms" and unprofitable sideline businesses.
The government introduced legislation into parliament yesterday that will stop around 11,000 high income earners - those earning more than $250,000 a year - from claiming immediate tax deductions on their loss-making casual businesses.
Treasurer Wayne Swan described the changes on budget night as a measure to stop people who "exploit parts of the tax system to unfairly minimise or avoid their tax obligations", The Australian Financial Review reports this morning.
Despite loud protests from the National Farmers Federation, Thoroughbred Breeders Association and the National Association of Forestry Industries, Assistant Treasurer Nick Sherry introduced the new rules with only minor technical amendments.
"The essence of the proposed changes is the same as that announced at budget," National Farmers Federation manager of economics and trade, Charlie McElhone, said. The new non-commercial loss rules will stop people with an adjusted taxable income of more than $250,000 from applying losses from non-commercial business activities against their other income.
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