The Australian government is considering placing a limit on generous tax breaks offered to investors in plantation forests amid protests that they are distorting the market and discriminating against small landowners.
Under proposals drawn up by Assistant Treasurer Peter Dutton, a cap would be applied on the tax-deductibility of investment amounts per hectare.
Currently investors in the forestry sector receive a 100% first-year tax deduction on their investment.
The schemes have come under increasing attack from farmers who argue that they drive up land and water prices, and are creating a new class of absentee landowner.
Some coalition members of parliament are also calling for the review to be widened to include other agribusiness schemes that offer big tax deductions to investors, including avocados, olive oil and pearls.
However, the issue has split the coalition, and Forestry Minister Eric Abetz has come out in support of the tax schemes.
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