Farmers in drought could get tax exemption
DROUGHT-AFFECTED farmers and businesses could soon be given an exemption from income tax.
The federal government is also putting pressure on the states to ease up on payroll taxes for those struggling through the drought.
The income tax proposal will be canvassed by the government's expenditure review committee next week.
"We've put $7 billion on the table already - we're working closely with the states," Home Affairs Minister Peter Dutton told Nine Network on Friday.
"We will do whatever it takes to support farmers."
Federal Nationals backbencher David Gillespie said the income tax idea would have limited benefit.
"Most farmers in drought won't be making a profit so they won't be paying income tax," he told AAP.
"There was a thought mooted in the Queensland papers about giving them a payroll tax holiday.
"A lot of them wouldn't pay payroll tax - if they do, that would be a great idea.
"But it's a state tax, we can't legislate for that in Canberra."
The tax relief plan is the latest in a string of contested proposals floated by members of the coalition this week, as the government cobbles together a response to the drought.
Labor deputy leader Richard Marles said the government was more focused on itself than the farmers.
"If you're in Armidale right now and you're facing running out of water by Christmas you would be horrified that all you can see going on from government right now is a whole lot of infighting between government MPs in Canberra," Mr Marles said.
The government has ploughed $2 billion in drought assistance into the economy and set up a $5 billion fund for future drought resistance projects.
However, Mr Dutton is sceptical of a National Farmers' Federation proposal to offer "exit payments" for farmers to leave the land.
"I think farming families have a real connection to their land and to the community," he said.
"We'd want to think very carefully about how that would operate or what that would mean for the rest of the town.
"It's not just somebody walking off their property, it's what happens then to all the local small businesses in that community and right across that region as well."
Earlier this week, the National Party put up its own drought relief plan with $1.3 billion of extra assistance, including $10 million in cash grants for every council in drought.