Budget 2021 - What's in it for Ag

By: Anthony Wingard

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A collective plea for a reprieve to agricultural labour shortages has been answered following Treasurer Josh Frydenberg’s handing down of the 2021-2022 federal budget last night.

Budget 2021 - What's in it for Ag
Treasurer Josh Frydenberg is hoping the 2021-22 budget will bring new green shoots to the Australian economy

The ongoing labour crisis within the sector has been a constant limitation over the past year, in large part due to travel implications from the COVID-19 pandemic.

To address this, the Commonwealth 2021-22 budget will focus on building a sustainable workforce through attracting, retaining and upskilling workers.

The government has allocated $29.8 million to further modernise the agriculture sector’s practices and image to ‘reflect the dynamic, innovative and resilient industry it is today’. This package will be rolled out through two key programs – AgAttract and AgFair.

The allocation includes $10.1 million to improve employment opportunities for young people in the agricultural sector, with a minimum of $2 million allocated in each of the next five years.

However, the budget does not state any funding or initiatives to allow backpackers and seasonal workers to return to Australia for harvesting seasons.

National Farmers' Federation president Fiona Simson welcomed the investment, saying they were "sound initiatives".

"Agriculture’s growth is constrained by a skilled and low-skilled workforce deficit, a problem that has been exasperated by COVID border restrictions," she says.

However, the NFF continues to call for a dedicated agriculture visa solution and an apprenticeship-style qualification.

"This Budget is recognition of the crucial role a strong and profitable farm sector plays in Australia’s overall economic prosperity" Simson says.

Simson also applauded an investment in regional infrastructure spending and rural mental health, but bemoaned what she identified as only $153 million in funding to improve regional communications, with $68 million quarantined from existing funding for northern Australia. 

"This falls short of securing the future of the Mobile Blackspots Program beyond this year, as called for by the NFF," Simson says.

"The NFF implores the Government not to become complacent in its funding for regional communications." 

Full Expensing

The government’s decision to extend its temorary full expensing program featured prominently in the budget last night and will likely be well received by agricultural and industry dealers.

The scheme allows for business with less than $5 billion worth of income to deduct the full cost of any new assets right away, rather than spreading it out over many years across depreciation.

The extended program was set to end in June 2022 however it has been extended by one year until June 2023 - with the government estimating the move will cost it $17.9 billion over four years.

Already, the program has proved popular with farmers, with NAB financing for agricultural equipment growing by 130 per cent between 2019 and 2020 with tractors and irrigation equipment the most popular purchases.

Natural change

Up to $370.9 million has been allocated to biosecurity measures across Australia in a bid to safeguard the country from exotic pests and diseases.

That figure includes $84 million which has been allocated to frontline measures to help aid and manage the risks from entering Australia while another $80.9 million will be used to modernise Australia’s biosecurity system to strengthen and quicken the screening process.

Simson has welcomed the additional funding, whcih also includes $29 million for a strengthened and more coordinated approach to feral animal control.

She also praised additional investment  into trade, sayng that farmers had been calling for a long-term trade strategy that consolidated and diversified agriculture’s export market base.

"Tonight, we’ve seen $213 million for trade including the enhanced representation and promotion of Australia’s interests through the WTO and the establishment of a new international agriculture envoy program to protect agriculture’s export interests," she says.

The government has also allocated $15 million to promote Australia’s interests and reputation in international standard setting bodies.

Given as much as 70 per cent of Australia’s agricultural production is exported, the budget says, "Australia’s trade and export sector will benefit these people directly, but all Australians will benefit, especially those in rural and regional areas."

Elsewhere, the popular International Freight Airstream Mechanism has not been extended, for what would be a fourth time, with the scheme due to finish at the end of September 2021.

The $112.8 million extension has proven important throughout the pandemic given it has allowed agricultural exports to be flown abroad to almost 70 international destinations as Australia, and the world, aims to repair the global supply chain.

Program Support

As part of the National Soil Strategy, the budget will deliver $196.9 million in new funding to implement associated measures to manage, value and improve soil across the next two decades.

The strategy has outlined three key goals – prioritising soil health, empower soil innovation stewards and strengthen soil knowledge and capabilities with actions to meet these goals ensuring "that soil continues to contribute to agricultural productivity, environmental sustainability and economic growth."

Elsewhere in the budget, drought relief for farmers also saw investment with an additional $60 million allocated toward the Farm Business Resilience Program which will help the building of the business skills and risk management capabilities of farmers with the program capable of reaching up to 17,000 farmers.

Eight new adoption and innovation hubs will be made around Australia to research and develop increased drought acumen for farmers and regional areas of the country through a further $38.5 million in the Drought Resilience Research and Adoption Program.

Investment in the program has now reached $117.3 million until 2023-24.

A further $25 million has been allocated to extend the emergency water infrastructure debate scheme on farmers, which will now run until June 2022.

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