12 May 2015
The federal government has provided key insights into its upcoming white papers on agricultural competitiveness and Northern Australia by unveiling a string of initiatives centred around a landmark plan to get more private sector investment into the nation’s north.
A new $5 billion Northern Australia Infrastructure facility will see an unpredented partnership between the private sector and the 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 the government says will open northern Australia.
“An extraordinary area of untapped promise is in Australia’s north. This is an
exciting frontier for economic development that is filled with abundant resources and talented people,” Treasurer Joe Hockey told parliament last night.
The budget provides $8.5m to Treasury over five years to engage expert advice on the appropriate eligibility criteria and governance for the proposed new infrastructure facility and for the financial, commercial and legal advice required.
Separately there is $2.1m to establish a taskforce to work on plans to reduce home, contents and strata insurance premiums in northern Australia, which is prone to multi-million damage bills caused by cyclones.
This could see the government providing support to a reinsurance pool or a mutual insurer that provides cyclone-specific cover.
Despite its abundant water resources, a lack of key infrastructure and a significant population base has long been an obstacle to the development of northern Australia.
However some companies such as the Chia Group run by the now US-based Australian entrepreneur John Foss have succeeded in developing significant and profitable businesses. There are also a number of new projects on the drawing board for commodities such as sugar.
Recognising that disease has also been an historical obstacle to development of the north, the budget provides $15.3 million over four years to invest in research into exotic disease threats to Australia and the region.
$6.8 million will be allocated to the National Health and Medical Research Council to support research into tropical diseases and $8.5m will be provided over four years to establish an Australian Tropical Medicine Commercialisation grants programs to support Australian medical researchers to commercialise therapeutics and diagnostics in tropical medicine to attract foreign investment.
Both initiatives will form part of the upcoming northern Australia white paper.
“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,” said Agriculture minister Barnaby Joyce.
“They tell us a productive agricultural 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.”
Over the past week the government has announced a range of measures to support the $52 billion agriculture sector, including a $333 million drought support package announced by the prime minister.
Last week it announced $101.3m over four years to improve cattle supply chains in the north with a focus on road infrastructure.
Now the budget provides $70m to give farmers an automatic tax deduction for new investment in water facilities, and a three year depreciation allowance for capital expenditure on fodder storage assets
In addition all farmers will be able to fully deduct the cost of new fencing from their tax bill, an initiative that will help to improve profitability and environmental management of the land.
The budget also provides $35m for shovel ready local infrastructure projects and $25.8 million for programs to manage pest animals and weeds in drought affected areas, providing valuable work for rural contractors.
Courtesy of The Australian