13 May 2015
Colin Bettles
The Land
AGRICULTURAL stakeholders remain in limbo as the federal government pledges to continue its refinement of the Agricultural Competitiveness White Paper, post-budget.
The White Paper was an election pledge made by the Coalition from opposition to provide a detailed policy road map for the agricultural sector’s future in making it one the nation’s five economic pillars.
A green paper was released last October, after taking over 700 stakeholder submissions in a process being managed by Prime Minister Tony Abbott’s office.
The finalised document was due to be released late last year following formal cabinet approval, but has yet to be released.
Pre-budget speculation suggested the government’s 2015 budget would contain a $1.7 billion funding envelope for the Agricultural White Paper and Northern Development White Paper, which are expected to overlap in key sections.
However, the budget failed to deliver individual spending allocations detailing specific elements of both papers, despite Mr Abbott announcing $100 million for beef routes in northern Australia last Friday, linked to northern development.
Mr Abbott described the $100m announcement as a “down payment”, similar to other measures that would soon be unveiled in both papers. The budget papers said the Agricultural White Paper would be released in 2015.
Asked whether the two White Papers were subject to an ad hoc development process, Federal Treasurer Joe Hockey said, “no; not at all”.
Mr Hockey said the government made funding allocations for the papers in this year’s budget but needed more time to consult further about specific policy items with farmers and the agriculture sector.
‘Delivering for farmers’
However, the Treasurer said he was “really proud” of a key budget initiative delivered in this year’s budget to give farmers $70m in accelerated depreciation claims for infrastructure, starting July 1 next year.
The $70m extends to fencing, water facilities and fodder storage and was unveiled in a joint statement with Federal Agriculture Minister Barnaby Joyce.
Mr Hockey said the fencing depreciation initiative was “a big productivity supporter” which would assist productive farming, environmental management and pest control.
“So that’s one step (and) there are more to come,” he said of the Agricultural White Paper.
Mr Hockey also said the PM’s announcement on northern cattle routes was “hugely important given the massive growth in cattle exports and good prices”.
In reference to the Northern Australia Development White Paper – which has carriage with Trade Minister Andrew Robb and will lay out extensive future plans for agricultural development, especially water infrastructure – Mr Hockey also said, “there’s more to come there”.
Mr Hockey also highlighted the government’s budget announcement of a $5 billion concessional loan facility to boost co-investment in Northern Australia between the Commonwealth, states and private enterprise.
He said the new $5b Northern Australia Infrastructure Facility was “the first step in the opening up in one of Australia’s long term growth opportunities”.
It’s understood the loan facility will be open for applications and project proposals from July 1 this year but the government loans won’t start flowing until the following year.
“An extraordinary area of untapped promise is Australia’s North,” Mr Hockey said.
“This is an exciting frontier for economic development that is filled with abundant resources and talented people.
“Its tropical climate is shared with two thirds of the world’s population, and of course it’s closer to our key trading markets than any other part of our country.
“But the North needs new infrastructure to get things moving.
“We need to build in order to grow.
“We will partner with the private sector and governments of Western Australia, the Northern Territory and Queensland, to provide large concessional loans for the construction of ports, pipelines, electricity and water infrastructure that will open our Northern frontier for business.”
Farm fuel credits safe
As with previous budgets, pre-emptive speculation about changes to the Fuel Tax Credits Scheme (FTCS) to remove farmers’ eligibility proved to be unfounded.
This year, in again targeting mining’s eligibility, Australian Conservation Foundation (ACF) proposed capping the FTCS at $20,000 per individual claim saying it would save the federal budget
$15 billion over the forward estimates.
However, farm groups rallied with the mining sector to form an alliance strongly opposing the ACF’s suggestion, reminding government the rebate is provided for off road fuel use in primary production.
Mr Hockey said this year’s budget was “as much for the miners of the Pilbara, as it is for the farmers in the Mallee”
He said farmers are “the most resilient of all Australians and they are also our best environmentalists”.
“They have to deal with the varied conditions of a big land, fierce global trade and ever increasing competition,” he said.
“At the moment, we have parts of our country that remain in drought.
“As such, we are committing over $300m to help them get through these tough times.
“Equally important, as part of our economic plan, we need to start preparing for the droughts beyond today.
“Over the next few weeks, after further discussion with farmers, we will be releasing more details about our plans to strengthen agricultural production across Australia.”
Drought preparedness a key priority
Mr Joyce said drought preparedness was a key priority identified as part of the Agricultural White Paper process and the accelerated depreciation measures would create an incentive for farmers to undertake on-farm preparedness activities and increase productivity.
He said the depreciation measures announced in today’s budget came in addition to the $333m drought support package announced on the weekend.
He said the 2015 federal budget delivered more than $400m in targeted support for farmers and communities impacted by drought.
Mr Joyce said the new measures also build upon existing Commonwealth support to farmers experiencing hardship, such the Farm Household Allowance, which is currently flowing to over 4800 farmers or their partners.
“Over the past two years the Commonwealth has provided around $190m to support drought-stricken farmers and approved $270m in concessional loans to 531 farm businesses,” he said.
Mr Joyce said this year’s budget sets out strong foundations for future investment in Australia’s $52b agriculture sector.
He said through this year’s budget, the government was maintaining core funding for key functions, like biosecurity and research and development, while supporting farmers dealing with prolonged and unprecedented drought conditions.
“We’ve achieved this in a responsible way by reducing red tape, reprioritised our investment to bring profits back to the farmgate and preserved funding for what’s important, like disease response preparedness,” he said.
“The benefit of a responsible Budget is the flexibility it creates to make responsible investments in the future.
“We’ve been listening to farmers, their advisers and their communities through the Agricultural Competitiveness White Paper process and the Water Infrastructure Taskforce about what is needed to build a stronger industry.
“They tell us a productive agriculture sector needs investment in key areas – ensuring a fair go for farmers; support in hard times; access to markets; good biosecurity; infrastructure; and access to leading edge research and development.
“On May 9, the Prime Minister and I brought forward immediate drought support measures because of the real and critical need in some parts of rural Australia.
“We have also delivered on our commitment to research and development through the recent announcement of the first round of successful projects in the $100m Rural R&D for Profit initiative and we’ve improved access to markets through three new free trade agreements with three of our top five agricultural trading partners.
“Work is well advanced to deliver significant investment in this crucial sector through the forthcoming Agricultural Competitiveness White Paper, Northern Australia White Paper and the Water Infrastructure Taskforce.”
2015 federal budget – $400m for farmers and communities impacted by drought
• $35 million for shovel-ready, local infrastructure and employment projects. Funding will be targeted at projects that offer the greatest potential to stimulate local spending, use local resources and provide lasting benefit to the community
• $25.8 million for programmes to manage pest animals and weeds in drought-affected areas. This measure will provide work for rural contractors while assisting landowners to deal with the impact of feral animals on livestock and pasture
• $20 million to expand existing social and community support programmes. This additional funding will improve access to mental health support and counselling services for drought-affected families and communities
• $1.8 million to fund additional rural financial counsellors in drought-affected areas
• $250 million in 2015–16 to continue access to existing drought specific concessional loans schemes
• $70 million to enable primary producers to claim more favourable accelerated depreciation for water facilities, fodder assets and fencing, allowing farmers to more effectively store and use water and fodder to better manage periods of drought and fully deduct the cost of fencing in the year it is purchased.
Courtesy of The Land
