[Pil-pc-oceania] FORWARDED MESSAGE: from Ethinvest

[pacific-edge]

The following message is forwarded on request...

From: "Trevor Thomas" <tthomas at ethinvest.com.au> Date: 7 February 2007
11:18:05 AM To: "Earth Literacy S/F" <rowe at lisp.com.au> Subject: Timbercorp
Announcement
 
>> Dear
>> 
>> Yesterday the Federal Government announced that the Australian Tax
>> Office was reversing its decision to allow tax-deductions for the
>> up-front costs of horticultural managed investment schemes effective
>> from July 1 2007.
>> 
>> This does not affect plantation timber, but means that the future of
>> almond, olive, grape and other horticulture projects is under a
>> significant cloud. Existing projects are unaffected, but the =20 announcement
>> suggests that the up-front costs of new projects  would not be
tax-deductible.
>> 
>> This had an immediate negative impact on the share price of =20 Timbercorp,
>> which has been the prime driver of this style of =20 investment in the
>> horticulture sector. Timbercorp management has =20 responded strongly to the
>> news as you can read in the attached =20 announcement.
>> 
>> The key points that it makes are:
>> 
>> 1. Rural Australia needs investment in highly water efficient, profitable
>> industries. Timbercorp provides this investment and  will not be able to do
>> so to anything like the same extent after 2007  if the ATO does not reverse
>> it view. Investors in horticultural projects are legitimately carrying  on a
>> business, and therefore should be entitled to the same tax treatment as any
>> other business - i.e. expenses should be tax deductible. The ATO has
>> previously lost a test case in the courts where it argued that MIS investors
>> were not carrying on a business. The Government should introduce a
>> transitional or review period  during which time the legality of the new ATO
>> decision can be tested in the courts
>> 
>> At the present time we recommend that you take no action, as this is
>> unlikely to be the last word on the matter. Indeed other Government
>> ministers have been outspoken in their support of managed agricultural
>> investment schemes in the recent past.
>> 
>> Ross and I have just returned from a day and a half in the Robinvale -
>> Swan Hill area reviewing horticultural projects and were impressed with
>> the investment and job creation that these projects generate. We also view
>> the high levels of water  efficiency and profitability per litre of water
used on these farms as  setting the tone for the future of Australian
agriculture in the Murray Darling basin.
>> 
>> We will keep you informed of developments as they unfold.
>> 
>> Kind regards, Trevor
>> 
>> Trevor Thomas B.Ec (Hons.) MBA CFP General Manager
>> 
>> Ethinvest Pty Ltd Australian Financial Services Licence 223718 PO Box 692
>> Chatswood NSW 2057
>> 
>> T - 02 9413 9558 F - 02 9413 9379 E - tthomas at ethinvest.com.au