KEY players in the Senate are set to jump all over controversial Managed Investment Schemes and the Government incentives paid to them following the $4 billion collapse this week of another MIS group, Great Southern.
The failure of West Australian-based Great Southern Limited means more than 40,000 investors will be owed money by the scheme.
But it also ignites the long-running debate about the tax incentives given to plantation schemes which rural opponents argue only drive up land prices, take land out of food production and significantly decrease run-off in the Murray Darling Basin.
A new inquiry by the Senate Select Committee on agricultural and related industries, chaired by Liberal Senator Bill Heffernan, has this week been given the nod.
Meanwhile Greens leader Bob Brown has called on the Government to reveal just how many millions of taxpayers' dollars have been poured into these schemes, and Independent Senator, Nick Xenophon, will introduce a Private Members' Bill to have the incentives scrapped altogether.
Senator Heffernan said his committee would look at the recent failure of Timbercorp, and now Great Southern, and will investigate the broader impacts of the schemes on food production, food affordability and environmental sustainability.
Senator Xenophon said the tax benefits provided by the federal government to MIS, worth billions of dollars, have created "unsustainable distortions in the water market, putting extraordinary pressure on the already stressed Murray-Darling river system".
But he said their failure was a chance for the Government to "re-gain control of a significant amount of water".
"The previous Federal Government helped cause this mess through ill-conceived tax breaks and the current government allowed it to continue," Senator Xenophon said.
"Now it is time for the Federal Government to clean up the mess in the interests of farming communities and the environment."
He said the Federal Government must now ensure the assets and water licences owned by failed schemes don’t become the subject of a fire sale.
"These MIS control tens of thousands of hectares of crops and many billions of litres of water.
"Many Murray-Darling communities will suffer if these crops are abandoned overnight or if another corporation is allowed to buy up the water licenses in a fire sale."
Senator Brown estimates the total effective subsidy to Managed Investment Schemes could be as high as $4.7 billion over the last decade, but is unclear about what has specifically gone to "get-rich-quick" plantation schemes.
"The tax breaks for carbon sink forests should be urgently reviewed in light of the Managed Investment Scheme debacle," he said.
National Association of Forest Industries boss, Allan Hansard, said the tax rules for MIS were important to the ongoing expansion of the plantation forestry industry.
"MIS provides the investors with the tax deductibility at the start of the project, when costs are greatest, rather than waiting until the forest is harvested," Mr Hansard said.
"Contrary to misconceptions, MIS does not provide a ‘tax break’ - it merely changes the time the tax deductibility is provided to investors."
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