Agriculture, and beef in particular, has generally fared poorly in the Federal Budget issued by the lame duck Gillard Government overnight.

The National Farmers Federation said the Budget had brought little change for Australian farmers – and the little change that had occurred was simply a re-diversion of funds from one Government-funded project to another.

While NFF expressed relief that agriculture had been spared from major cuts in the budget, it was disappointed that the Government was simply moving funds around within agriculture and other portfolios, rather than committing additional funds to new projects.

“The biggest news for agriculture was the announcement of $99.4 million in farm household support under the new drought policy assistance package,” NFF president Duncan Fraser said.

“But these funds were already committed to the Government’s Caring for our Country project, the Federal environmental management program which provides funding support for farmers and land managers to engage in natural resource management, helping to protect our valuable resources in the best interests of the Australian public.

“What the Government did last night was to rob Peter to pay Paul. The Budget papers show that there will be a redirection of $141.5m of Caring for our Country funds over five years to fund the household support package and other initiatives.”

“In addition, while agriculture has been spared major cuts under the Budget, cuts in other areas may have a flow on effect to our farmers. For instance, the Government is cutting $3.9 billion from the assistance it provides to industries affected by the carbon tax – including agricultural processors. Essentially, this means that those processors, who will now feel the full brunt of the carbon tax, will have little choice but to pass the full cost on to farmers.”

Additionally, the Government had also made changes to the PAYG system, which meant that farm businesses that operate as trusts and sole traders will now have to report PAYG monthly, not quarterly. This will be a major regulatory burden on farmers at a time when the Government has committed to reducing red tape.

“We’re pleased, however, to see the Government recognising the importance of infrastructure, through the announcement of a $24 billion investment in road and rail, including freight corridors,” Mr Fraser said.

While these are not agriculture specific, it is positive to note that two thirds of these infrastructure projects would be in rural and regional areas, providing a flow-on benefit to agriculture.

“Overall though, tonight’s Budget is a disappointing one for Australian agricultural. The Government is not taking a long-term, strategic view and investing in the future of this important sector – rather it is simply moving money around within the existing tight agricultural budget.”

“For example there was no recognition of our calls for an increase in the total Government spend on agricultural research and development to ensure future growth, innovation and productivity on farm.”

“The Government needed to do two things: firstly, provide the foundation that allows agriculture to continue to grow in the face of major challenges, and secondly, demonstrate a commitment to the long-term future of the sector. Unfortunately they have done neither,” Mr Fraser said.

Nationals Leader, Warren Truss, said last night’s budget offered nothing for regional Australia and again illustrated Labor’s disinterest in regional Australia.

“Two billion dollars has been slashed from the dedicated Regional Infrastructure Fund, which Labor said would help redress the imbalance between city and country,” he said. “Labor made the funding contingent on mining tax revenue, but the mining tax has collapsed and Labor is now ditching its commitment to the regions.”

“The $2 billion regional communities Labor promised for local development works was always based on phantom funding, and now with the government’s botched mining tax failing to raise any significant funds, the Fund has been exposed for a cruel hoax,” he said.

“The Gillard government, in 2013-14, is projected to raise $80 billion more in revenue than at the end of the Howard government, but spending will be $120 billion more.”

Major lender, National Australia Bank said while agribusiness had emerged as a net beneficiary of the budget, with the diesel fuel tax rebate remaining intact, despite earlier speculation that it might be cut, the overall gains were rather modest.

“More generally, the Government has recognised the adverse impacts of the recent drought on farmers’ finances and their families, prompting them to announce a package of measures to support and assist farmers experiencing acute levels of debt, and setting up a fund under National Drought Program Reform to support farming families in times of hardships, NAB chief economist Alan Oster said.

“What a difference a year makes. Gone is the political rhetoric on the importance of gaining international credibility by getting a budget surplus, no matter what,” Mr Oster said.

“Rather, the focus is very much on a fairly timid initial approach that doesn’t see a balanced budget till 2015/16 or a surplus till 2016/17,” he said.

“In short, this is a budget that is more in line with a ‘soft economy’ – even if the Government doesn’t describe it as such.”

The budget effectively took nothing to the economy in the near-term (compared to detraction from growth of nearly 1.5pc this year).

“From a structural viewpoint nearly all of the heavy-hitting is from the revenue side and most is done in the out years. That said, the budget is helping to repair some structural problems via:

• scrapping last year’s welfare increases (last year’s so called spreading the benefits of the mining boom – around $2.5b over the estimates) and the baby bonus
• increasing the Medicare levy to help fund national disability reform (the largest saving at $11.5bn over the estimates)
• tightening offshore tax arrangements including Offshore Banking Units (a hefty $4.2b over the estimates) and acknowledging the lower carbon price ($3.4bn over the estimates).
• measures to reduce funding costs of schooling (out of universities etc at $2.6b) and measures to introduce PAYG systems for large tax payers.

“NAB’s real activity forecasts are very similar to Treasury’s – albeit we are a touch weaker in 2012/13 and we also have unemployment a touch higher,” Mr Oster said.

“Of more concern, we are significantly lower for nominal GDP – which is important because this was the main cause of revenue under prediction in recent years. We are also slightly weaker for the global outlook.”

The real risks to the budget probably revolved around how much of the package would see the light of day, post September’s Federal election, Mr Oster said.

“Overall, a budget for a softer economy, but one that is very political in nature – as probably was inevitable in present circumstances,” he said.

• Read NAB's comprehensive summary on the Federal Budget here.