What does the new federal budget mean for your agribusiness?
Following the global economic impact of Covid-19 and other such factors that have contributed to a striking rise in price across essential goods, including food and petrol, the budget had a heavy focus on addressing the increasing costs of living. This included measures such as a one-off $420 cost of living tax offset, and a 50 percent reduction in the fuel excise for 6 months.
There were also several new initiatives relevant to agriculture and exporting, notable relating to three key points:
Carbon, biodiversity, and sustainability
- Extending the ‘patent box’ regime to cover certain low emissions technologies and activities in the agricultural sectors, with benefits such as a concessional income tax rate of 17%
- Proceeds from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates credited to on-farm activities will be treated as primary production income for tax purposes
- A commitment of $100 million over the next 3 years to the Environment Restoration Fund to support community-driven action to protect and restore the environment
- $52.5 million Digital Environment Assessments Program to reduce the regulatory
Exports
- Adding $100 million to expand the Export Market Development Grants (EMDG) program
- Enhancing the Simplified Trade System with a further $267.1m, including $127.4 million to the Digital Services to “take farmers to markets” and $80 million for small and medium export businesses to re-establish their presence in overseas markets.
Infrastructure packages
- $2 billion Region Accelerator Program to improve skills, education, exports, and supply chains in key agricultural regions
- $811.8 million to improving mobile phone coverage in the bush
- $27.4 million over the next 2-3 years to prompt agricultural shows and trade events
However, according to the Australian Export Council, “absent are fundamental and strategic investments that might have helped secure Australia’s longer-term competitiveness.”
Furthermore, the Budget acknowledges that world GDP growth is likely to be lower, that global inflation will be higher, and that supply chains will remain constrained. So, it’s likely that the global economic landscape will continue to be tough for Australian exporters.
