Last night’s Federal Budget focused significantly on the environment, including carbon, biodiversity and broader landscape restoration, strengthening exports, maintaining biosecurity, developing regional infrastructure, and supporting the prosperity of regional Australia.
In the area of carbon, biodiversity, and sustainability, the ag sector will benefit from several commitments:
- From 1 July, proceeds from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates generated from on-farm activities can be treated as primary production income for tax purposes.
- $100m commitment for the Environment Restoration Fund to support community-driven action to protect and restore the environment over 3 years from 2022-23.
- Under the $52.5m Digital Environmental Assessments Program, regulatory burdens of environmental assessment processes will be reduced.
- Alongside Australia’s Long Term Emissions Reduction Plan, $247.1m has been committed over 5 years from 2021-22 across several carbon initiatives including the development of a Biodiversity Stewardship Trading Platform. This will support farmers to undertake biodiversity activities ahead of a voluntary biodiversity stewardship market. A further $148.6m will be invested in affordable and reliable power including the development of community microgrid projects in regional and rural Australia.
- $83m funding for up to 5 years from 2022-23 targeted at accelerating plastics recycling technology and capabilities will support the development of Australia’s circular waste economy.
- Additional $1 billion over 9 years from 2021-22 to strengthen Australia’s stewardship and leadership in the protection of the Great Barrier Reef, with $579.9m specifically focused on water quality improvement and working with land managers to reduce nutrient and pesticide run-off and landscape remediation.
- Further $139.9m over 3 years from 2021-22 to continue to invest in a sustainable Murray-Darling Basin by improving river health, enhancing environmental water outcomes, and stimulating economic activity in Basin communities.
- $139.6m over 4 years from 2022-23 to progress Environment Protection and Biodiversity Conservation (EPBC) Act reforms.
A $267.1m trade modernisation package will improve the sector’s competitiveness in international markets. Agricultural exporters will benefit from the $80m provided to small and medium export businesses to re-establish their presence in overseas markets.
The Budget focuses on protecting Australian agriculture from biosecurity risks like lumpy skin disease and improving on-farm biosecurity, such as reducing the impact of pests and weeds. $135.6m has been committed over 5 years, namely $61.6m over 4 years from 2022-23 for funding to improve biosecurity across Northern Australia, and $20.1m to support the adoption of livestock traceability reforms, accessible through 3-year grant programs.
Drought and flood resilience
The government is taking practical action to improve farmer resilience. An additional $84.5m over 4 years from 2022-23, met with the $100m per year expenditure under the Future Drought Fund itself, is targeted towards improving drought readiness and resilience of Australian farmers and communities. To support farmers’ recovery from the 2022 Floods in New South Wales and Queensland, the On-farm Emergency Water Infrastructure Rebate Scheme will be extended to 30 June 2023.
Regional Australia is a significant focus of this Budget. The big-ticket item is a $5.4 billion guarantee to construct the much-anticipated Hells Gate Dam in the Upper Burdekin Catchment in North Queensland, set to become the largest in Queensland and opening up 60,000 hectares of irrigation across the region. Further investments will also be made into Paradise Dam, Dungowan Dam, Darwin Region Water Supply Infrastructure and Emu Swamp Dam. The agriculture sector will benefit from the $2 billion Regional Accelerator Program which will improve skills, education, exports, and supply chains in key agricultural regions. An additional $811.8m is being committed to improving mobile phone coverage in the bush and a further $27.4m has been committed over the next 2-3 years to promote agricultural shows and large agricultural trade events.
Forestry and Fisheries
These sectors will receive $114.6m over 5 years from 2021-22, to the industries to respond to emerging challenges such as securing wood supply and improving long-term sustainability of fisheries via a temporary partial waver of Australian Fisheries Management Authority Levies.
- Additional $328.3m over 5 years from 2021-22 to further support the Modern Manufacturing Strategy and National Manufacturing Priorities to address critical supply chain vulnerabilities.
- The government will amend Australia’s foreign investment framework to reduce the regulatory burden faced by investors and support Australia’s economic recovery from the COVID-19 pandemic which will directly benefit the Agribusiness sector.
Meat industry welcomes budget support
The Australian Meat Industry Council welcomed last night’s Federal Budget, which delivered on several areas for the meat supply chain as it continues to recover from the events over the past two years.
The budget has provided funding commitments to some key issues for the meat supply chain in the areas of apprenticeships and training, small business, manufacturing and supply, traceability and biosecurity, trade and logistics. In addition, the budget invests over $600 million in Australian agriculture as part of the Morrison-Joyce Government’s plan to build a stronger future.
Investing in the workforce
AMIC welcomed the government’s spending boost on the new National Skills Agreement and a generous apprenticeships incentive program to support our industry with continuing workforce shortage issues. This includes:
- $2.8 billion over 5 years to upskill apprentices under a new incentive system
- $3.7 billion increase under the new National Skills Agreement
- Expanding access to trade support loans
“The Australian meat industry is managing an ongoing national shortage of workers, 5000 people at any one time, which is significantly impacting our meat supply chain,” said AMIC CEO Patrick Hutchinson.
“Our industry welcomes the significant funding for national skills training and apprenticeship programs that are structured to support and achieve a workforce that is skilled, stable and permanent.”
In addition to red meat processors, AMIC represents 1400 small-medium businesses including independent local butchers, wholesalers, and SME manufacturers (smallgoods and meat manufacturers).
AMIC supports the budget commitments made for small businesses which includes:
- Small businesses with annual turnover less than $50 million will have a 20 percent tax deduction boost for employee training by registered providers
- $1 billion technology investment boost to support small businesses to go digital, with a $120 tax deduction per $100 spent on investments up to $100k per year
“Within the meat supply chain, small business and SMEs make up a substantial part of operators. Independent butchers alone represent 20 percent of total meat sales in Australia,” said Mr Hutchinson.
“These initiatives will help streamline this section of the supply chain at a time when the fragility of supply chains has been brought to the public attention such as the Omicron food supply impact in January 2022.”
AMIC welcomed the additional $1 billion investment to the current $1.5 billion Modern Manufacturing Strategy; which includes an additional $750 million into the Modern Manufacturing Initiative; and $200 million to strengthen supply chain resilience under the Regional Accelerator Program – which prioritises investment in critical areas including the food and agribusiness sectors.
“Increased investment in the Manufacturing Strategy shows recognition of the critical role that meat processing plays in ensuring food security and underpinning agricultural manufacturing,” said Mr Hutchinson.
“We look forward to the details on the investment in supply chain resilience and what this means for our industry.”
Traceability and biosecurity
AMIC welcomed the Morrison government’s commitment to traceability and biosecurity with a $100m boost which is much needed.
“Traceability and biosecurity is fundamental to underpinning the Australian meat supply chain from producers through to processors, manufacturers, retailers and exporters,” said Mr Hutchinson.
“Every dollar of investment by the government in these areas delivers multiple direct and indirect benefits to the Australian agriculture and manufacturing industries.
“We also welcome sustainability investment in rewarding stewardship to our suppliers, being Australian beef, sheep and goat farmers.”
AMIC welcomed $261.7 million in funding towards the whole-of-government Simplified Trade System reform agenda, making Australian exports more globally competitive and trading easier for close to 200,000 Australian businesses.
“As Australia’s biggest agriculture exporter, the meat industry continues to support the work undertaken by DFAT and the funding that is made available to issues such as the implementation of the Australia-UK FTA as well as modernising our export industry via the Simplified Trade System reform agenda,” said Mr Hutchinson.
“At a time when demand for our exports is ever increasing, we need to ensure our supply chain runs smoothly,” said Mr Hutchinson.
“The totality of the budget investments for port, rail and road infrastructure will go towards ensuring this, so long as every one of us working across our supply chain are pulling in the same direction.
“Issues like recent waterfront disputes risk investments like this not being realised to the detriment of Australia.
“Any investment in improving infrastructure will always help Australia’s biggest agricultural exporter.”
AMIC’s pre-budget submission – export areas
While AMIC remains supportive regarding sections of this budget, as per the AMIC pre-budget submission, it says there were missed opportunities to further support Australia’s biggest agriculture exporter, these included:
- $300m for the extension of the International Freight Assistance Mechanism (IFAM) to mid-2023, to provide exporters with some level of certainty on airfreight, until international border restrictions are removed and a new normal is established
- $70m over four years for the continuation of the initiative under Busting Congestion package to freeze increases in the Australian Government export inspection and certification fees and charges
- $60m (and commensurate Average Staffing Level increases) over four years to double the Australian Government technical market access negotiation capacity for Australian food exports.