Situation normal in Federal Cabinet – principle and consistency have finished distant last to the interests of political donors and the farmer lobby.

Having done a special deal to protect the tax break used by timber plantation rural managed investment schemes as their main marketing tool, the federal government has thrown the non-timber MIS to the ATO lawyers.

Why planting trees for timber is such a fundamentally different agricultural enterprise compared with planting trees for avocadoes or pecans is beyond me – maybe it has something to do with where the donations to the coalition parties come from or the extent of farmer unrest about the tax-driven expansion of MIS into other crops.

There was some ministerial chatter about tree plantations being important for greenhouse reasons, but that can be dismissed because it happened before the Prime Minister discovered the phenomenon.

No, it’s just shabby politics without principle. But it’s not really bad for the tax schemers – the government has given them licence to let it rip until 1 July anyway, meaning another billion dollars or more will be hoovered into the schemes.

And after that, well, it’s still a bit vague. The AFR reports it will come down to an ATO test case, so anything can happen. And never discount the power of a political donation in an election year.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey