HORSHAM'S average taxable income effectively went backwards in the 2014/15 financial year, with zero per cent growth before inflation.
New figures from the Australian Taxation Office show Horsham’s incomes stalled while consumer prices increased by 2.3 per cent.
A majority of postcodes in the Wimmera with public taxation data saw flat or declining average taxable incomes.
Balmoral was one of the best performing areas around Horsham, at eight per cent, while Natimuk and Birchip saw declines of 13 and 16 per cent respectively.
Victorian Farmers Federation president and Murra Warra farmer David Jochinke said there was an important lesson to be learned.
“Businesses in this region are dependent on agriculture, so it’s important that we support not just farmers but the whole community during times of drought,” he said.
“Seasonal variation in agriculture is a big issue.”
Mr Jochinke said he suspected a few farmers were using offsets to carry over losses and reduce their tax bill, leading to the appearance of lower incomes.
Watts Price Accountants director Brian Watts said flat or declining incomes were linked to farmers expecting a poor season.
“When we surveyed our farming community, and they are a fair barometer of the financial health of the Wimmera, 2013/14 was the strongest in five years.
“We were coming off a high, basically. When we moved into 2014/15 it was not a good one. It was dry.”
Mr Watts said it was obvious to farmers in mid to late 2014 that they would not enjoy another break in conditions.
“Farmers and consumers were still spending in the supermarkets but not on discretionary items, which would have had a dampening effect on the Horsham economy,” he said.
“If businesses are suffering, they are less likely to be putting up salaries and wages.”
Mr Watts said when the farmers and smaller town areas were doing it tough, residents were less likely to shop in Horsham.
“New vehicles and farm machinery purchases were put on hold but we’re now seeing farmers out there spending,” he said.
Member for Mallee Andrew Broad said it was clear the drought had contributed to the taxable income results.
“There s was a drought. It was as bad as it gets for some areas,” he said.
“People would be making losses, fairly substantial losses and that’s reflected in people’s bank balances and their tax returns.
“Thanks goodness last year’s harvest was better.”