At this time every year when the end of the financial year is fast approaching my mail box is crammed on a daily basis with offers for all sorts of tax saving investments. Because the Government have tended in the past to give significant concessions to people engaged in primary production the bulk of these wonderful investment opportunities usually involve something that grows.

Over the years we have had pawlonia (a Queensland hardwood that looked remarkably like balsa wood to me), gum trees (very good for pulp milling but it helps if there is a pulp mill nearby), pistachios (which taste fine but they seem to me to be very low yielding), aloe vera (which is good for bluebottle stings but has a restricted market in the beauty industry), ostriches (which have a funny attitude towards widowhood), olives (which are making inroads into the markets created by Greece Italy and Spain but need time) , crayfish (which funnily enough need millions of litres of water to flourish) and even emus (who share the celibate habits of ostriches when they have lost their mate).

I do not suggest that all or even any of these primary production enterprises are necessarily bad investments, although history has not looked kindly on them in the past.

If the offering of an investment opportunity depends for its validity on the tax savings involved then I try to put myself and my clients at a distance measured in several bargepoles.

All business enterprises involve the risk of failure, especially business that demands the kindly intervention of the weather gods, and that means all primary production. For this reason alone I am particularly wary of primary production. It amazes me how many hopefuls are growing grapes for wine production as a new business venture and forget that they are involved as primary producers. There are many steps between planting a grape and drinking a bottle of Grange.

Beware the lure of a tax break, especially if this “benefit” is needed to make the investment pass breakeven point.