Articles
For trustees running a Self-Managed Super Fund (SMSF), understanding how to maximise Exempt Current Pension Income (ECPI) can lead to more tax-effective outcomes. ECPI is the portion of income an SMSF earns from assets that support retirement-phase pensions — and that income may be tax-exempt, subject to meeting regulatory requirements. While many factors can influence ECPI, the timing of contributions and the commencement of pensions are often the most impactful and practical levers trustees can evaluate. This article unpacks how these two timing-related elements can affect ECPI outcomes, with brief reference to other considerations that may also play a role. Timing of Contributions When and how contributions are made to an SMSF can significantly affect the calculation of ECPI. Generally, contributions enter the fund in the accumulation phase, where earnings are taxed at 15%. If these contributions sit in accumulation phase for most of the year before being converted into a pension, they may reduce the proportion of fund income eligible for ECPI. Alternatively, converting contributions to pension phase earlier could result in a greater share of income being exempt from tax. Points trustees may consider: Contributions made just before year-end may have little or no impact on ECPI unless swiftly allocated to retirement phase as they do not have a great impact on accumulation percentage over the whole year. Once converted to pension they boost the ECPI percentage. Early-year contributions may offer more flexibility for pension planning as well as increase the ECPI percentage if converted to pension immediately. When considering the timing of contributions, trustees should also look beyond ECPI considerations and consider the return on investment inside versus outside of the fund. This often means that if funds are available, contributing them early in the year can lead to a better investment outcome with a lower tax rate, regardless of ECPI (depending on the tax rate of the individual outside of the fund, as well as the return on investment within the fund). Timing of Pension Commencements The date a pension begins directly affects when the SMSF starts generating ECPI. Only from the commencement date does the pension phase apply, which means delayed pension commencements could result in missed tax exemptions for income earned earlier in the year. Potential considerations: Starting a pension earlier in the year may increase the ECPI proportion. A mid-year pension commencement could split the year into separate ECPI calculation periods, depending on whether the fund is using the segregated or proportionate method for calculating ECPI. At Smith Thornton, we will always use the appropriate method to ensure the best tax outcome for our clients’ funds. Documenting the pension commencement correctly is essential to support any claim for ECPI. Other ECPI Issues While timing is often the most tangible variable trustees can manage, it is important to be aware of other factors that can impact ECPI: Asset Allocation Strategic asset allocation, while staying within compliance and risk tolerance, can influence the overall tax efficiency of a fund’s income in retirement phase. Since ECPI is based on income generated by assets supporting retirement-phase income streams, the mix of assets (such as shares, property, or cash) affects the amount of exempt income. For funds using the proportionate method, higher income-generating assets in the retirement-phase portion can increase the tax-exempt benefit. Conversely, if lower-yield assets support pension interests, the ECPI benefit may be reduced. Record-Keeping Strong documentation supports compliance, audit readiness, and accurate ECPI claims. Smith Thornton will always ensure that all records are kept correctly and are available if our clients have any questions about the appropriate record keeping requirements. Likewise, it is also very important for the trustee to maintain good record keeping. ECPI Calculation Methods The choice between the segregated and proportionate methods, as mentioned above, can impact the final exempt amount. Each of these aspects plays a supporting role, and understanding how they interact with timing decisions assists with effective SMSF management. In Summary This article highlights the importance of forward planning and strategy for SMSFs. Smith Thornton encourages our clients to contact us early if considering changes to their SMSF so that the appropriate planning and timing can be implemented. We note that these are general insights only and should not be considered personal financial advice. Clients should always seek our guidance before implementing changes, particularly when tax outcomes and member balances are involved. If required, we can introduce clients to our partners, Knights Financial Advisors, who are licenced financial advisors and can provide financial advice.
This article provides a firsthand explanation of how the live sheep export ban impacts sheep farmers and the wider community. Chrissie Smith and her husband are sheep farmers based in Kojonup and we share this opinion piece that she prepared with her permission. Yesterday, during a discussion over a Facebook post, I was asked by a friend of a friend if I could clarify the thought process around the live sheep export ban from a sheep farmer's perspective, and if farmers were over dramatising the situation. A very honest question, and one I was very happy to answer. These are mine and my husband's words and sentiments.... There is a lot to explain, and it isn't as simple as just numbers. Maybe make yourself a cup of tea. Western Australia's "sheepbelt" has a very different climate from that of our Eastern State counterparts. They also have much better slaughter facilities and can process a much higher number of sheep than we can here in the West. Our sheep production year runs from November to November. We start preparing our ewes for mating in November, rams go into the mob in February, we drop our lambs late June & July, and we grow out the lambs through those other months, ready for the market in November. Our green feed season generally runs from May to November. Outside of those months, we rely on dry feed and supplementary feeding. We (my husband and I) opt to sell our lambs straight from mum, where possible, as it is the most profitable. Due to WA having long dry summers, we do not get the same green feed window that they do in the Eastern States. A lot of farms over there have irrigation and lucerne and perennial based pastures, which WA is not suited to. They also receive a lot more summer rain. Therefore, it is way more difficult for us to grow out our lambs in a shorter period of time. Hence, we get an influx of sheep ready to be slaughtered all at a similar time. We don't have the facilities to handle large numbers, and if we don't get the kill space with the abattoirs, we risk being stuck with stock that is ready for slaughter but no market. For example, in the springtime flush, NSW, VIC & SA will kill approximately 510,000, and WA kills 93,000 per week. You have to understand that the WA processing companies are desperate to get rid of live sheep export. The reason being, is that if Live Export disappears, they have no competition, because there are more sheep than can be processed, which causes a massive over supply, and therefore a direct price reduction for the farmer. This happened in the spring of 2023 when Live Export came to a standstill on the government's announcement. The WA sheep farmer was receiving as little as $35 p/h for mutton and $110 p/h for lambs. This is where the live sheep export comes into play. This offers us another market to sell our sheep, and they will offer us a good price for what we call our stores. These are lambs and older sheep and wethers (mutton) who haven't grown out as well as we would like, often due to our seasonal conditions, and for farmers who don't have the capabilities to hold on to the sheep for a longer period of time, mainly due to how much it costs to feed them, and the issue of soil erosion because of being overstocked in the dry conditions. In the last few years, we have been getting between $5.20 and $7.10 per kg dressed (which means after they have been slaughtered). So for our 365 days of work put in to produce a lamb, we receive $5.20 to $7.10 per kg, we also have to pay to get our sheep delivered to the abattoirs They process the lamb in one day and then deliver to the grocery store, who packs and sells to their customer for $45 per kg. Does this seem fair to the farmer? If we need to hold on to our sheep for a longer period, it will cost us between $50 - $60 per sheep to continue to feed, and there is no guaranteed price at the end of that, so with a falling market, the farmer can lose a lot of money. So, with no additional market for the extra sheep (removing live exports), it becomes a very big risk to the sheep farmer, and their business starts to become unviable. This is where the snowball effect starts to take place. The sheep farmer loses faith. They've lost their only other market to sell their sheep through, they reduce the number of sheep they are producing, which is what is already happening in preparation for the ban. Many farmers opted not to put their rams out with the ewes this season, for fear of being stuck with sheep they can not sell in the future. Now I won't lie, for us, this has helped the lamb per kg price recover. At $5.20 per kg, there is no money in producing a lamb, so for every price rise above that is a huge bonus for us. However, because of the reduction in numbers, there is no need for shearing contractors, no need for transport companies to move our sheep from farm to abattoirs or the port, people leave the farming communities, our schools suffer, our medical facilities suffer, and our small businesses suffer. For the regional communities, it becomes death by association. I saw recently that Wagin two years ago had eight shearing teams; they are now down to three teams. That is approximately 50 employees, plus their partners and their children who have left the Wagin community in the past 12 months. Another example is three local contractors around our area marked 100,000 less lambs in 2024 compared to 2023. Again, it's about economics; they take a massive hit in revenue, their business profit is reduced, they can't afford employees, and again, more people leave our communities. The Labor government, Albo and his constituents, made this decision without any consultation. They chose to take the side of Sydney Green Representatives and members of PETA to buy their votes in the last election. If they can ban an industry in the blink of an eye, which industry is next? If Beef goes, Northern WA and the NT are stuffed. Then it will be pork, chicken, eggs... My question to everyone is...go to your fridge, and pull out everything in there that is produced by a farmer, and let me know what you have left. Then, rethink how important farmers are for our country. Farmers are caring and nurturing people, but imagine if they coordinated together to stop providing all produce for 14 days, with nothing leaving the farm gate - what would happen? Lamb, beef, pork, chicken, eggs, milk, butter, yoghurt, ice cream, cheese, cereals, rice, sugar, fruit, vegetables, beer, wine, your cup of tea you just made...and the list goes on. The impact on farmers and our rural communities is not being over dramatised. I could go on forever about this, and to be honest, if you have read this far, I really appreciate it. Hopefully, this gives you some insight. I really do thank you for asking a very honest question, and hopefully, you can see this as a very honest answer.
Being an employer of choice as a small business owner is a key component of long-term success. Small businesses are presented with unique challenges when it comes to competing with larger organisations for top talent, but with a strategic approach, challenges can become opportunities. By including employee attraction and retention strategies in a strategic plan, small businesses can build a loyal, motivated workforce and position themselves for sustainable growth. What is Strategic Planning for Small Businesses? Strategic planning is the process of defining the key goals and direction of a business and the actions required for success. This will involve setting long-term and short-term goals, identifying potential risks/issues that need to be resolved, and mapping out measurable actions and responsibilities. A key pillar of a small business strategic plan should focus on people because attracting and keeping the right staff is critical for business success and growth. Some other key benefits of linking employee-related goals to the strategic plan include: It will ensure that talent management remains a focus, which is essential when employees are one of the most important assets of a business. Decisions regarding employing new staff and managing existing staff will become intentional and structured and form a cohesive approach to building the best team. With good planning and communication, employees can work towards achieving business goals and become aligned with the mission and vision of the business. Employee retention is more cost-effective than constantly recruiting and training new hires. A strong employer brand that’s incorporated into your strategic plan helps ensure long-term stability, minimising turnover costs and creating a loyal, experienced workforce. Planning to become an Employer of Choice Below are some examples of how business owners can use actionable steps to attract and retain talent. It is also interesting to see how some of these examples also promote business growth. Training and development Investing in staff development can align with nurturing employees’ own personal growth and ambition, as well as helping business owners achieve long-term success. Actions might include: Identify areas where the team needs development to help the business grow. (e.g. leadership skills, cross-functional skills, technical skills, professional certifications, soft skills). Create a staff development and training calendar that aligns with those needs. Create a mentorship program which will not only encourage knowledge sharing but will also build relationships. Develop a clear career pathway for each role within the business. This motivates and gives employees a long-term focus. Workplace culture Employees place great importance on feeling happy and supported at work. Creating a workplace culture that promotes this is a key factor in retaining staff. Actionable steps aimed at improving workplace culture might include: Develop and promote a brand that reflects the values and culture of the business. This will naturally help attract the right staff as job applicants tend to research the business prior to applying to determine whether the business is a good fit for them. Identify and engage in training and staff development options aimed at improving workplace culture. Create and enact a plan on how to monitor staff engagement and satisfaction. Recruitment Small businesses often have limited resources, but allocating some of those resources to talent management can have a lasting impact on a business’s ability to grow. Create a recruitment plan that budgets for: Attractive compensation packages - ensure pay is aligned with industry standards based on location and sector. Offering flexible benefits or non-monetary rewards (such as extra leave or remote work options) can make a huge difference. Employee referral programs - encourage current employees to refer friends or colleagues by offering incentives. Employee referrals are often a more cost-effective recruitment strategy for small businesses, and they tend to bring in candidates who are a good cultural fit. Sufficient human resources involvement – high-quality human resources assistance throughout both the recruitment process and day-to-day operations is essential. It helps with talent management and guiding behaviours that promote a good workplace culture. Work-life balance Incorporating work-life balance into the business strategy is crucial for small businesses looking to become an employer of choice. Having a focus on work-life balance is an investment in employee well-being, which directly impacts retention and productivity. Some actions that are aimed at achieving a good work-life balance include: Reviewing and updating business procedures and infrastructure to enable an offering of remote work options, flexible hours, or a hybrid model to employees. Establish guidelines promoting healthy work habits, such as encouraging employees to take their vacation days and limiting work outside regular hours. Identify and implement communication tools that will promote regular conversation between management and staff. Early identification of burnout or work overload is key (e.g. employee surveys, one-on-one check-ins, and team meetings). How to Stay on Track As with any business strategy, it’s essential to measure the effectiveness of employer of choice initiatives and make adjustments as needed. This can be done via surveys, focus groups and performance reviews. It is also essential that the overall strategic plan of the business be reviewed regularly to ensure that actions are being addressed and also that the plan remains relevant as the business grows. If you need help developing the strategic plan for your business, please contact us at Smith Thornton.
Aims to accelerate the growth of your agtech innovative startup by giving you expert guidance, deep industry insights, critical tools, and strategic connections. Are you an agtech startup? A farmer who has developed new technology? A researcher looking to commercialise your innovation? Or a business looking to apply your technology in the agricultural sector? Now in its ninth year, HARVEST has supported over 80 businesses. The program is valued at over $10,000 and is FREE for successful applicants. What stage should my business be to apply? - From early stage startups, to small to medium enterprises. Applications close 5 May 2025. Click here to view full funding guidelines on the provider's website.
With another financial year end approaching, we are turning our attention to tax planning season. We have listed below some things that may have changed from prior years, as well as some general strategies to consider. Tax cuts from 1 July 2024 With tax cuts applying from 1 July 2024 this may present an opportunity to review and plan for upcoming decisions regarding trust distributions, payment of dividends and strategies such as contributing to superannuation. The changes that apply from 1 July 2024 are: The bottom tax rate decreases from 19% to 16% for income in the range of $18,201 to $45,000. The 32.5% tax rate decreases to 30% for income in the range of $45,000 to $135,000 The threshold above which the 37% tax rate applies increases from $120,000 to $135,000 The threshold above which the top 45% tax rate applies increases from $180,000 to $190,000. *Note that the above rates do not include the Medicare levy of 2%. Maximise Super Contributions From 1 July 2024, the general concessional contributions cap is $30,000 for all individuals regardless of age (previously $27,500). Many people will also have unused contribution caps from prior years so this can provide a good opportunity for a good tax outcome whilst boosting your superannuation. $20,000 Instant Asset Write-Off As part of the 2024–25 federal budget the government announced it will extend the $20,000 instant asset write-off limit for a further 12 months until 30 June 2025. Please note that this measure is not yet law. Under the measure, small businesses with an aggregated turnover of less than $10 million will be able to: deduct the cost of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2025 deduct the cost of additions for assets costing less than $20,000 (if an immediate deduction for an asset under the simplified depreciation rules in a prior income year where the amount is less than $20,000). The proposed $20,000 threshold under the measures applies on a per asset basis, so small businesses can instantly write off multiple assets. Review Bad Debts Now is a great time for reviewing the debtor's list for your business and determining which of those won’t be able to be recovered, as writing off the unrecovered income as a bad debt prior to the end of the financial year will provide a tax deduction for the 2025 financial year. Please note that the debt must be genuinely bad, and not merely doubtful, and the decision to write off the debt must be made in writing before the end of the financial year to claim the deduction. We are currently scheduling tax planning and meetings for the upcoming months, so if you want to discuss strategies and review your affairs, please contact our team.
Offers scholarships for research and travel in the agricultural industry. Eligibility Typically between 28-45 years of age. Please note that exceptional candidates outside this age range will be considered A citizen or permanent resident of Australia Engaged in farming, horticulture, fishing or associated industries Intending to remain involved in food and fibre industries in Australia Scholarship Benefits 15-weeks of purposeful learning and unique access to our approachable, global agricultural network Connections with the global alumni – over 500 scholars in Australia and 2,000 worldwide See leading and innovative businesses and identify new best practices Select a research topic that will be of use to you, your business, community and industry Value $40,000 bursary, subject to guidelines set out on this website to cover costs associated with the study and reporting $3,000 of the bursary will be withheld as an assurance on the submission of an approved report In addition to the longstanding scholarship investors, the Future Drought Fund (FDF) are investing in at least five scholarships that are specifically available to study drought resilience and support innovation. These scholarships will support applicants to build drought resilience expertise, adapt innovative technology and practices from overseas and share these learnings to advance Australian agriculture. Click here to view full funding guidelines on the provider's website.
Buying a small business can offer a range of exciting opportunities for business owners. However, the acquisition process can be somewhat daunting for some buyers and sellers, involving meetings and discussions with terms, words, concepts and processes that may not be familiar. It can be high-pressure and time-critical and can often culminate in the buyer and seller becoming overwhelmed and frustrated. Under these circumstances, it is recommended that advisors (lawyer, accounting, business advisor) are engaged to ensure that information is understood and proper processes are followed. Advisors will, of course, add a cost to the process; however, they will ensure that the acquisition is approached thoughtfully with a clear strategy in place. Outlined below are key considerations and practical steps to help potential business owners navigate the process of purchasing a small business successfully. Clarify Your Goals Before looking for a business to purchase, determine the key business criteria and establish business ownership goals. Perhaps consider the following: What rate of return is required? Should the business be under management or managed by a business owner? How many hours does the business owner want to work each week? Is there a preferred industry or an industry that should be avoided? Is stable cash flow preferred, or is growth potential preferred instead? It will be essential to keep these criteria in mind and refer back to them each time acquisition opportunities arise. This will ensure that the business opportunities that are pursued tick the key boxes. Review Key Financials When a suitable business is found, the next step will be to review the financial information that is available from the business broker. This will provide an initial indication of whether the business is financially stable and whether the asking price is fair. At least three years of profit and loss statements should be provided to check whether the business is consistently profitable, margins, types of expenses, and revenue generated yearly. If profits are up and down or following a declining trend, the acquisition might be risky. The drivers behind profit variation need to be understood. The seller will often provide adjusted profit and loss statements to the buyer. These remove certain income and expenses to adjust for those specific to the seller, unusual or non-recurring. These adjustments should be understood, and any queries should be clarified. It is also important to understand whether it is the shares in the business or just some of the business assets being acquired. Most small business acquisitions involve buying just some of the business assets, such as plant and equipment, goodwill, IP, client lists, etc. However, occasionally, the shares or the company itself are acquired. In this situation, the buyer will acquire all the company's assets and liabilities and take on all past, current, and future liabilities. If this is the case, the balance sheet should be requested and reviewed, and thorough due diligence should be performed before settlement. Understand the Asking Price It is important to understand whether the asking price for the business is reasonable. A common valuation method for small businesses involves using a multiple of the business’s earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is essentially the adjusted profit. It is highly advisable to get an accountant or business advisor to assist you with this task. Engage a Lawyer Once the initial review of the asking price and financials has been performed, the next task is usually to sign an offer and acceptance contract. It is very important that a lawyer assists with this if the buyer is not confident in their ability to understand the terms and conditions of the contract. Some key conditions that are typically included in the contract by the buyer are to make the offer subject to securing finance and subject to due diligence. These terms are aimed at ensuring that if the buyer cannot secure finance or has concerns following due diligence, the contract ceases, and their deposit is recovered. Securing Finance Approaching a finance broker or bank with a sense of urgency (or getting pre-approval) is advisable, as securing finance can take some time. The bank will typically require cash flow forecasts for the business and a business plan from the buyer and these can take some time to prepare. An accountant or business advisor will usually assist with this process and can liaise with the bank if required. Once finance is secured it is also important that the buyer understands the terms of the finance offered. This will likely be discussed with the accountant when cash flow forecasts are prepared, however, if not, the buyer needs to understand key terms such as interest rates, term of loan, the type of loan facility offered, repayments, and the risk involved in securing finance against personal assets. Perform Due Diligence Due diligence involves requesting and reviewing information about the business to ensure no hidden issues could become a problem for the buyer after settlement. For a very small business, this process can be less involved. Key areas that due diligence will cover include: Legal and compliance checks. Contract and lease reviews. Thorough financial review. Review of employee and management contracts and discussions with the seller around roles, responsibilities, key staff and their resistance to change. Inventory and equipment review, including review of equipment condition and whether the price in the contract represents market value. Legal and Regulatory Considerations Once finance has been secured and due diligence has been finalised, the next step will be completing the settlement. A lawyer or settlement agent will usually assist with this process. Prior to settlement, some key legal and regulatory considerations need to be addressed to ensure a smooth settlement and changeover of business ownership. These might include: Choosing a business structure. Applying for an ABN or ACN (if necessary). Organising the transfer of business name. Registering for GST and PAYG. Applying for a TFN (if necessary). Setting up a business bank account. Writing to customers to explain the change of ownership and new bank account details. Contacting suppliers to organise new accounts. Purchasing a small business can be an exciting and rewarding experience. Still, it requires careful planning, thorough research, and an understanding of the business acquisition process, along with knowledge of the financial and operational aspects of the business. The information above is by no means exhaustive; however, it provides potential business owners with some key issues to consider. Ideally, advisors will be engaged throughout the business acquisition process by both the seller and buyer to ensure that each party is well-informed and that correct decisions are made. This approach also helps minimise risk, stress and delays, which are great outcomes for both parties. If you need help navigating the business acquisition process, please contact Smith Thornton , and we will be happy to help.
Farmers know better than anyone that preparing a forecast is not always as simple as cutting and pasting from last year. Profits and net cash flow generated from farming operations can change significantly year on year due to the influences of a multitude of variables. Some variables are unpredictable, such as weather, commodity prices, conflict and government policies. However, farm owners can estimate several income and expense drivers with reasonable accuracy based on their invaluable experience on farm over many decades. With the assistance of an advisor competent in preparing detailed cash flow forecasts, farmers can then use their knowledge to forecast expected profit and cash flow for the year (or years) ahead. At Smith Thornton, we often assist our farming clients with preparing their annual farm forecast. For some farmers, a quarterly review and update is preferred or required, depending on their financial circumstances, the size of their farming operations, or whether they are experiencing a period of change. In preparing the forecast, it is important to review and discuss key farming inputs and assumptions, future plans, financing, capital expenditure, changes to operations, and even succession. The more information discussed and clearly understood, the more robust the forecasting will be. Key inputs and assumptions that should be considered include: Livestock schedules: Destocking and restocking are occurring across many farming operations off the back of poor pricing and drought conditions. It is therefore important to forecast livestock numbers, including natural increases, birth rates, death rates, sales and purchases. Operational changes such as running a new breed or holding stock longer/shorter than usual also need to be given careful consideration. Commodity pricing: Whilst we can’t predict commodity pricing with 100% accuracy, we can apply prices that are reflective of industry forecasts. We can also apply conservative prices to test worst case scenarios. Crop rotations: Crop rotations are common and are adopted to improve soil nutrients and yields. This means crop types, hectares and expected yields need to be reviewed yearly. Fertiliser and chemicals: Fertiliser and chemical types, quantities and pricing need to be reviewed on an annual basis to ensure that the cost is reflective of cropping and livestock plans. If the farm operates with an overdraft facility and cash is tight, fertiliser payment is often deferred and paid once crop sales are made. It is important to consider the timing of payments to accurately forecast a cash balance. Seed and seeding: Consider whether seed is available on farm or whether it needs to be purchased. Consider crop rotations, what type of seed will be required, and what type and how much seed is required for pasture. Seeds will also need to be sown by owners, staff, or a contractor. The costs associated with these vary, so consider which is most appropriate for the year ahead. Stock expenses: Lice treatments, vaccinations, tags, drenching and vet expenses are significant costs for livestock farmers. They are also dependent on the breed and livestock numbers on farm, so can change year on year depending on the farming operations. Shearing and crutching: Every sheep farmer will understand the large expense involved in shearing and crutching a herd. It is, therefore, imperative that the timing of shearing and crutching throughout the season is considered when preparing a farm forecast, as this will have a significant impact on the monthly cash balance. Destocking and restocking of sheep will also impact this expense, along with the breed of sheep on farm. Harvesting: Harvest will occur at a similar time each year, although it can vary depending on weather experienced throughout the season and leading up to harvest. The key to forecasting harvest costs is to consider harvest conditions, fuel, contractor availability, receival and storage fees, and the condition of equipment required for harvest. Repairs and maintenance: Repairs year on year can vary wildly and unexpectedly. We can’t forecast unexpected expensive equipment failure, but we can budget for a certain level of repairs, knowing that equipment breaks occasionally. We can also consider the condition of farm equipment, whether major maintenance should be planned, along with the costs associated with regular servicing of equipment/vehicles and property maintenance. Financing: Most farms have debt, whether it be through long term loans, equipment finance or an overdraft facility. Understanding the terms of these debt facilities and the impact that they have on cash flow is important. Plant & equipment: Equipment gets old, farms expand, and operations change. If plant and equipment need to be replaced or purchased, this needs to be planned for, and financing needs should be considered. Needs will need to be prioritised if cash flow is an issue. Living expenses: Farm owners also need to live! Monthly drawings, personal debts, schooling expenses, holidays, personal insurances and income tax should all be considered when preparing a farm forecast. Preparing a farm forecast is a time-consuming exercise and requires careful thought and consideration. Albeit a tedious task, it does provide peace of mind, knowing what to expect when it comes to cash flow and then having time to change some decisions or talk to the bank if necessary. The information passed around when preparing a farm forecast is also invaluable when the next generation becomes involved in these discussions. It gives the next generation a good insight into the financial considerations of operating a farm, which is a part of the business that they are often not involved in. If you need help preparing your farm forecast, please contact us at Smith Thornton and we will be happy to assist.
Whether you are in business with family members, fellow professionals or a third party, it is important to protect and nurture your co-owner relationships to ensure your business can thrive
Assists primary producers to take advantage of digital agribusiness solutions to boost productivity, improve safety and drive more sustainable farming practices. The On Farm Connectivity Program Round 2 is now open for rebate applications from Approved Suppliers and Primary Producers. Rebates of up to 50% are available for eligible equipment worth up to $30,000 (GST exclusive). Applications close 5pm AEST on 30 April or until funding is exhausted, whichever occurs first. Broadened eligibility criteria under Round 2 of the program and a larger number of Approved Suppliers means more Primary Producers can benefit from the program. The objectives of the program are: Extend digital connectivity and take advantage of advanced farming technology Enhance a primary producers’ capacity to implement digital agribusiness solutions through improved connectivity Capitalise on the agricultural sector’s potential for increased productivity and growth Support access to new communications equipment by offsetting some of the cost. The intended outcomes of the program are: Increased investment in equipment to support operations of the agricultural sector Increased efficiency, competitiveness, productivity and profitability of the agricultural sector Improved safety on farm Increased use of advanced farming technology Improved knowledge of advanced farming technology and digital literacy. Eligible Primary Producers can only access the program (and rebate) through an Approved Supplier. Download a list of Approved Supplier here. Primary Producer eligibility An Eligible Primary Producer must: be a registered business and have an ABN that has been active for the previous 12 months at the time of applying have an annual average pre-tax income from primary production of between $40,000 and $4 million. Annual average gross income is calculated as the average of the previous 3 full financial years' income for each ABN not be a hobby farmer operate an eligible primary production activity that is defined as those listed in the Australian and New Zealand Standard Industrial Classification (ANZSIC) 2006 (revision 2.0) codes under Division A, Agricultural Forestry and Fishing, Subdivisions 01, 02 and 03 agree to the department contacting you for a case study about your connectivity solution for the On Farm Connectivity Program up to 2 years after the Program has closed. You can download eligible ANZSIC codes in Appendix D of the On Farm Connectivity Program Round 2 - Grant Opportunity Guidelines here. As part of the application process, the Primary Producer will be required to sign a declaration to confirm their eligibility. How much is available? The Australian Government is providing $18 million in 2024–25 under Round 2 of the Program. Rebates of up to 50% of the cost of eligible equipment are available, with a minimum rebate of $1,000 (GST exclusive) and a maximum of $30,000 (GST exclusive) on offer. How much is the rebate? Under Round 2 of the Program, the rebate amount will be up to 50% of the cost of eligible equipment. the minimum grant (rebate) amount is $1,000 (GST exclusive) the maximum grant (rebate) amount is $30,000 (GST exclusive) There is no limit to the amount an eligible Primary Producer may spend, however, the rebate cannot exceed $30,000 (GST exclusive). Primary Producers can purchase eligible equipment from multiple Approved Suppliers, to a total combined value of $30,000 (GST exclusive). What products are eligible? There are 5 broad categories of eligible connectivity solutions and associated eligible equipment: Low Power Wide Area Networks (LPWAN) Connectivity Equipment Environmental monitoring Farm management Remote automation and control You can find the list of eligible equipment categories and sub-categories at the List of Eligible Equipment . Important notice: Any supplementary products offered by the Approved Supplier are not eligible for the Program and must be purchased outside of the Program. What's the process? Once a Primary Producer accepts a quote for the eligible equipment, the Approved Supplier will submit an application for a rebate. If the application is successful, the Primary Producer pays for the equipment at a reduced price. Once the equipment is installed/shipped, the supplier can claim the reduced price back as a rebate. Further information is outlined below: Step 1 - Support: Primary Producer may engage with the Regional Tech Hub to discuss their connectivity needs and get personalised advice. Step 2 - Choose: Primary Producer engages with and selects a connectivity solution from an Approved Supplier. Step 3 - Quote: Primary Producer receives, then accepts quotes from an Approved Supplier. Step 4 - Application submission: Approved Supplier submits rebate application. Step 5 - Application assessment: Business Grants Hub assesses application (estimated 2-6 week turnaround). Step 6 - Rebate outcome: Approved Supplier and Primary Producer advised. Step 7 - Invoice: Primary Producer receives invoice at discounted price of up to 50% off from Eligible Equipment Supplier. Step 8 - Payment: Primary Producer pays invoice. Step 9 - Equipment installed / shipped: Approved Supplier ships product. If required, an appointment is arranged to install the connectivity solution and/or train the Primary Producer in how to use the connectivity solution. Step 10 - Rebate claim: Approved Supplier is required to submit rebate claims to the Business Grants Hub for payment within a 120 day timeframe, or by 31 May 2025, whichever is sooner. Smith Thornton subscribes to a grant search provider and can help you prepare your grant application. If you have any questions our Business Services Advisor Jenna van Nierop will be happy to assist. You can email her at jennav@smiththornton.com.au or call her on 9842 5155.
