The National Farmers’ Federation says last night’s Federal Budget delivers modest gains for the farm sector through specific initiatives that will assist cash flow on farm, lower business taxes, boost bilateral trade agreement outcomes and recognise challenging seasonal conditions facing the farm sector.
NFF president Brent Finlay said the agriculture portfolio largely held its ground, with funding of around $2 billion, despite an expected decrease in the Government’s tax receipts of some $14 billion.
“This recognises that the agriculture sector is a source of economic strength, linked to growing appetites for safe, clean and sustainable Aussie produce in key Asian markets,” Mr Finlay said.
“The measures announced tonight on trade, tax breaks and small business measures will be welcome news for Australian farmers.”
Central to the budget announcement for the agriculture sector are specific measures that will allow farmers to accelerate depreciation for spending on water, fodder and fencing which will encourage investment and improve cash flow on farm.
- The Government will allow all primary producers to immediately deduct capital expenditure on fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills.
It will also allow primary producers to depreciate over three years all capital expenditure on fodder storage assets such as silos and tanks used to store grain and other animal feed.
These changes will be for income years commencing on or after 1 July 2016. Currently, the effective life for fences is up to 30 years, water facilities is three years and fodder storage assets is up to 50 years.
The measure, which the Government estimates will come at a cost to revenue of $70 million, is designed to “improve resilience for those primary producers who face drought, assist with cash flow and reduce red tape by removing the need for primary producers to track expenditure over time”.
It will also form part of the Government’s White Paper on Agricultural Competitiveness.
Other key announcements include:
- $25 million to help Australian producers access the benefits of free trade agreements, an initiative called for by the NFF.
Small business tax cuts which will assist more than 110,000 farm businesses that have less than $2 million in cash receipts.
$83 million for pre-announced drought funding for rural communities and pest and weed control.
- $101.3 million in pre-announced funding over four years from 2015‑16 to improve cattle supply chains in the north, with a particular focus on road infrastructure. This funding will seek to improve the productivity and resilience of cattle supply chains in northern Australia, drawing on the CSIRO’s state‑of‑the‑art logistics modelling, as well as input from livestock transport and beef industry experts, to identify deregulation opportunities and investment priorities. The funding will also provide incentives for private sector investment to improve the road network and transport logistics in the area.
“We hope that tonight’s budget is a preview of policies and significant funding commitments for tangible initiatives to support agricultural competitiveness and growth,” Mr Finlay said.
Mr Finlay said the budget release now had farmers all over Australia eagerly anticipating the release of the Agricultural Competitiveness White Paper.
“All eyes will now be on the Agricultural Competitiveness White Paper and the Northern Australia White Paper. Together, these policies will be the measure of this Government’s commitment to, and vision for, the success of the agriculture sector.”
Source: National Farmers Federation