Federal budget: Investment incentives, biosecurity support fall short

Beef Central, 10/05/2023

AUSTRALIA’S agricultural sector biosecurity, worker and market access was boosted by $1.5 million of new spending in the Federal Budget tabled in parliament last night.

But farmers, travellers and importers will pay more to underpin Australia’s first ongoing sustainable biosecurity funding model, sketched out by Minister of Agriculture Murray Watt in a media statement last night.

A proposed increase in agricultural levies, “set at a rate equivalent to 10 per cent of the 2020-21 industry-led agricultural levies” from July 2024, is expected to raise $153 million over three years. This was criticised by National leader David Littleproud as amounting to a food tax on Australian families.

Under the proposed biosecurity funding model, the government expects larger importers to contribute $350 million to biosecurity costs next year, from an increase in fees and cost-recovery charges. Import items valued at $1000 or less will attract a new biosecurity levy, aiming to raise $81 million over three years.

Mr Watt said the model will result in more than $1 billion of additional funding for biosecurity, including $845 million to support biosecurity operations across the country, protecting the nation’s valuable agricultural industries.

Federal Minister for Agriculture Murray Watt: model will result in more than $1 billion in biosecurity funding.

“For the first time, an Australian Government is locking in higher, ongoing and more predictable biosecurity funding, from year to year – drawing a line under years of stop gap, temporary funding from Coalition Governments, that placed our agriculture sector at risk.”

Mr Watt said to address risks from travellers and parcels, funding from an increase to the Passenger Movement Charge will contribute to the cost of biosecurity, and cost recovery will be expanded to include the biosecurity clearance of parcels and non-letter mail. The charge will increase by $10 from mid-next year and apply to all passengers departing the country.

“Importers will contribute more fairly through their clearance costs with increased fees and charges expected to take their total contribution to biosecurity costs to almost $350 million next year,” Mr Watt said.

“The Albanese Government will also explore options to introduce a broader biosecurity import levy that is consistent with international trade law obligations,” he said.

“We will also introduce a modest new biosecurity protection levy on agriculture, fisheries and forestry producers – creating a new system that will be more predictable, equitable, transparent and accountable than ever before,” he said.

“We are locking in higher and more certain biosecurity funding, along with a fair system to pay for it that shares the cost equitably between taxpayers, importers, parcel senders, international travellers and producers.”

Key agriculture, forestry and fisheries measures in the Federal Budget include:

  • $145.2 million upgrade to digital biosecurity services through a Simplified Targeting and Enhanced Processing System. This is a program of work to bring our cargo management systems into the modern digital age, reducing costs and delays for industry and government. This will free up biosecurity workers for other jobs and reduce congestion at the border.
  • $40.6 million to continue the Indigenous Ranger Biosecurity Program in Northern Australia – a key part of frontline biosecurity monitoring, detection and response in our north.
  • $302.1 million over five years to support climate-smart agriculture through the Natural Heritage Trust – helping farmers transition to a low emissions future and strengthen agricultural sustainability.
  • $38.3 million for ABARES to improve the collection, analysis and sharing of data on the impact of climate change and low emission technology on agriculture, to assist policy making and farmers’ decision making.
  • $127 million to the Department of Agriculture, Fisheries and Forestry – a one-off payment in 2022-23 to ensure the viability of the Department, addressing a decade of chronic mismanagement, underfunding and budgetary incompetence by the former Coalition Government.
  • $5 million to develop a renewed Australian Animal Welfare Strategy – to deliver on the Government’s election commitment to update and enhance a national approach to animal welfare.

Mr Watt said funding continues for the roll out of key forestry initiatives including grants to improve innovation, a national institute of forest products innovation and plantation establishment grants. The government is also committed to continuing the rollout of country of origin seafood labelling throughout the next 12 months.

Farmers dealt ‘bittersweet hand’ on biosecurity – NFF

However, the National Farmers Federation said farmers hoping to see an increase in biosecurity funding have been dealt a “bittersweet hand”, as they face a bill equivalent to 10 percent of their industry-led agricultural levies – levies which already fund many biosecurity activities and organisations. The increase will be imposed on products from 1 July 2024, after a period of industry consultation.

“The move to have farmers foot the bill is a bitter pill to swallow.

“We’re already significant financial contributors,” NFF president Fiona Simson said.

“What’s more, we bear the cost of managing historical pest and disease incursions and face the enormous threats posed by pests and diseases on our doorstep.

“After years of consultation and discussion, we’d hoped to see a scheme such as a broad-based container levy – that forced risk creators to underwrite the system,” Ms Simson said.

“It’s extremely disappointing to have to continue waiting for a meaningful contribution from risk creators.”

NSW Farmers president Xavier Martin said at first glance, the $1 billion in extra funding to strengthen biosecurity measures sounds great

“However, it’s farmers that are being told to pay for it with a new ‘biosecurity protection levy’.

“Biosecurity is a significant threat on many levels, not just for agriculture, but for the Australian economy in general,” he said.

“It’s risk creators, the people exposing our country to deadly diseases and pests, that should be bearing the brunt of the cost, not farmers who are growing our food and fibre.

“Sure, importers will be paying slightly more but quite frankly, it’s not enough.”

Tax on farmers will hit families – Littleproud

Mr Littleproud responded tonight that the Labor government’s budget will introduce a new food tax on Australian families, in the middle of a cost-of-living crisis.

He  said the new tax on farmers to pay for the biosecurity risk of international importers was senseless and would be passed onto consumers, which meant even higher grocery bills for all Australians.

“It is unfathomable the Labor government would ask farmers to pay for the biosecurity costs of importers from other countries,” Mr Littleproud said.

Investment incentives fall short

Meanwhile, farm business incentives in last night’s Federal Budget have been welcomed, but fall short, according to the National Farmers Federation and NSW Farmers.

The Federal Government will temporarily increase the IAWO for small businesses from $1,000 to $20,000 from 1 July 2023 until 30 June 2024.

The Australian Tax office said the measure is not yet law.

But the ATO said small businesses, with aggregated turnover of less than $10 million, will be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use between 1 July 2023 and 30 June 2024. The $20,000 threshold will apply on a per asset basis, so small businesses can instantly write off multiple assets, the ATO said.

Assets valued at $20,000 or more, that cannot be immediately deducted, can continue to be placed into the small business simplified depreciation pool and depreciated at 15 percent in the first income year and 30pc each income year after that, the ATO said.

The NFF also welcomed support for small businesses to invest in electrification and energy efficiency through the Small Business Energy Initiative. This means farmers will save on energy bills with an extra 20pc deducted on eligible depreciating items like energy efficient fridges, heat pumps and batteries, but it fails to include renewable energy generation like solar panels.

However, NFF president Fiona Simson said the SBEI deduction combined with the Instant Asset Write-Off extension, capped at $20,000 per asset is “a lopsided compromise.”

“Farmers are looking at ways to bring down the increasing energy burden and the incentive will help spur this along.

“But it’s disappointing the two incentives fall far short of the previous uncapped Instant Asset Write-Off which gave farm businesses far more reach to increase productivity.”

The NFF has also pointed to road funding, tax incentives and measures to address worker shortages as areas where the Federal Budget falls short.

“Right along the supply chain, the businesses which grow, process and transport our food and fibre are under immense pressure.

“Whether it’s workforce shortages, damaged roads, or the cost of capital upgrades – there are issues that need urgent attention if we want to achieve price relief for consumers,” Ms Simson said.

“Sadly, (the) budget fails to act on these in any meaningful way.”

NSW Farmers also concerned about inadequate road expenditure

The NSW Farmers Association also welcomed deductions of an additional 20 per cent of the cost of depreciating assets that support more efficient use of energy, but is concerned about inadequate spending on improving regional roads and infrastructure and the new capping of the Instant Asset Write-Off to assets valued up to $20,000.

NSW Farmers president Xavier Martin said the association is pleased; however, to see Australia performing well despite the global challenges and remaining competitive amongst the uncertainty facing many parts of the world.

“Let’s not forget the role Agriculture and rural Australians  have played in contributing to this,” Mr Martin said.

“On the upside, the budget has allowed for moves to improve apprenticeship support services and drive-up apprenticeship completion rates. Worker shortages is a real problem across our sector, so it’s a step in the right direction.”

Other welcomed announcements include the investment in rural health with a boost to the amount paid to rural doctors bulk billing.

“Overall, the farming community will likely feel like they’ve been forgotten in this  budget.
“It’s a pity as this was a golden opportunity for the Albanese Government to show a commitment to improving cost of living pressures, not just for people in the city, but also for those of us in the regions,” Mr Martin concluded.


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