A stronger than expected economic recovery – driven by growth in the mining and agricultural sectors – has resulted in a 2022 Federal Budget providing cost-of-living assistance and further support for Australia’s fiscal bounce-back from the COVID-19 pandemic.
“This budget once again demonstrates the importance of the agricultural industry to Australia’s economy. Revenue derived from agriculture and mining is being distributed across the economy to help the hip pocket of all Australians,” said Australian Dairy Farmers president Rick Gladigau.
“Dairy farmers will be pleased to see initiatives addressing the increasing cost of farming, including flood recovery and further support to grow our regions. However, in reality the extent of expenditure for primary industries is small relative to economic contribution.”
Key budget announcements that support the dairy sector include:
- The fuel excise and excise-equivalent customs duty rate that applies to petrol and diesel will be halved for 6 months, which will create savings for every dairy business as of today.
- Over $2 billion in support measures for flood affected primary producers, small businesses, not-for-profit organisations and councils will help the 190 dairy farms that have been negatively impacted by the NSW and QLD floods.
- $6.9 billion investment in nationally significant, transformational water infrastructure projects to assist in developing regional communities and an additional $137.4 million towards infrastructure and compliance initiatives for the Murray-Darling Basin, which will address water security, a high priority for dairy farmers.
- $2 billion to establish the Regional Accelerator Program (RAP) to drive transformative economic growth and productivity in regional areas, potentially supporting some of Australia’s dairy industry’s regions to enhance their supply chain competitiveness.
- Over $1.2 billion to expand mobile coverage, connectivity, resilience and affordability in regional Australia which will assist in stimulating adoption of digital technologies.
- $250 million to extend the Modern Manufacturing Initiative to support businesses in priority sectors – including agriculture – to deliver high impact projects such as domestic manufacture of fertiliser and other inputs.
- $148.6 million to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia such as replication of the Nowra bio-digestor plant in other dairy regions.
“Some of these and other initiatives in the Budget support delivery of the ADF’s Federal Election policy statement,” Mr Gladigau said.
“In particular, the investment in R&D is welcome. Concessional tax treatment for corporate taxpayers who commercialise their eligible patents linked to agvet chemical products, and $505.2 million to support university research projects from proof of concept to commercialisation will in time bring benefit to the farm gate.”
However, the areas of regional development, biosecurity and maintenance of a skilled workforce require more investment to reduce the risk to dairy production and capitalise on the opportunity before the sector.
“For example, dealing with the threat of lumpy skin disease far exceeds the $61.6 million over 4 years provided to address that and other biosecurity risks.”
Craig Hough, ADF Director, Policy and Strategy, also noted the inflationary risk that this budget presents.
“With the economy at near full employment and being one of the strongest economies in the OECD, some of the stimulus initiatives are difficult to justify. Most of the cost-of-living initiatives are temporary and targeted, and there is a commitment to reduce the budget deficit going forward, but there will need to be care that we don’t fuel inflation and undermine the very intent of the Budget itself,” Mr Hough said.
For further information, contact:Â
Susan McNair
Currie
Tel: 0439 389 202