C. 2.5
Tax concession
Tax rebates, exemptions or deductions are tools that reduce a landholder’ s tax burden if certain activities are conducted on-ground. The main benefit of tax concessions is that they can be delivered through the current tax system, therefore saving on administration costs. The main disadvantage to tax concessions is that they are not as useful to producers with low incomes and therefore low tax contributions, and so the strength of the incentive can be reduced. Further, it is not possible to directly target key properties with a tax concession. This tool is only open to direct use by State and Australian Governments, and consequently the primary role of LDC would be in promoting the use of current tax incentives to landholders and their financial advisers. LDC could also identify problems with current tax incentives( including whether they encourage poor NRM) and possible new tax incentives and communicate these recommendations to the government responsible. Landholders who are participating in an incentive program should be notified as to the potential tax implications of receiving incentives as this can change their opportunity costs of participation.
Apx Table C. 11 Strengths and weaknesses of tax concession incentives
Strengths
� Removes a known barrier to improved land management
� Could engage landholders who have been difficult to engage with before
Challenges
� NQDT do not have the authority to conduct a tax related incentive
� How to ensure landholders conduct their on-ground actions
C. 2.6
Low interest loans
A low interest loan provides funding for approved projects at low interest rates for repayment. Loan repayments / debt servicing has been raised as a barrier to adoption of improved land management by BBB landholders and therefore could be an incentive that engages with landholders who have not engaged in other styles of incentives in the past. The added advantage of a low interest loan is that it could be used to fund large scale engineering works to manage for erosion. This style of incentive is not without its challenges. A low interest loan still places the cost of up front and ongoing land management change on the landholder.
There are already examples of low interest loans to the Queensland agricultural community. At present the Queensland Government through the Queensland Rural and Industry Development Authority( QRIDA) has a sustainability loan which can fund up to $ 1.3 million to rural landholders with a loan term of up to 20 years at low interest rates fixed for 1, 3 or 5 years. Sustainability loans are available to meet long term sustainability on properties for operators: who are full time primary producers; who have been operating for at least 2 years; have sound prospects for commercial viability; demonstrate financial need; and provide an adequate management plan.
As a signatory to the Natural Capital Declaration, the National Australia Bank( NAB) is working to embed an understanding of natural capital into its business. Through partnering with the Clean Energy Finance Corporation, the NAB has been offering business clients a 0.7 % discount for renewable energy and energy efficient assets. 88 % of loans in this area have gone to rural clients. The NAB is working with CSIRO to understand the link between natural capital and financial
86 | Landholders driving change: Exploring new incentives