What is in it for Farmers in the Australian Federal Budget?
After a period that has been difficult for farmers in Australia, there were several pieces of good news in the 2021 Australian Federal Budget. This is a much needed break for regional Australia.
The positives for farmers in the Australian Federal Budget include investment in a soil strategy, improvements in aged care in rural areas, and strengthening of national biosecurity measures. The Government’s aim is to help Australian farmers to recover and increase the value of the industry to more than $100 billion by 2030.
Taking a closer look at the effects of the Australian Federal Budget on farmers shows us how this will happen.
- Overall, the 2021 Australian Federal Budget is positive for farmers.
- The Instant Asset Tax Write-Off has been extended.
- $200 million has been pledged to a National Soil Strategy.
- $25.2 million has been pledged to attract workers to the industry.
- Funding for the Regional Connectivity Program will provide improved broadband and mobile provision in rural communities.
Instant Asset Write-Off extended
In the 2021 Federal Budget the Australian Government extended the Instant Asset Tax Write-Off scheme. This allows almost all businesses in the country to write off assets up to $150,000 by claiming an immediate deduction for assets purchased after March 12 2020.
In addition, temporary full expensing for Australian farmers has been extended. This allows farmers to fully depreciate an eligible asset in a single tax year. The scheme was due to end at the end of June 2022 but has been extended to June 30, 2022.
Focus on soil
The National Soil Strategy is a further one of the positive features of the 2021 Australian Federal Budget for farmers. Treasurer Josh Frydenberg has promised investment of $200 million over four years to implement the strategy.
A two-year pilot is part of the strategy. This will involve farmers being offered a rebate in return for sharing results of soil testing.
In a further nod to the Government’s focus on helping farmers to reduce their environmental impact, $59.6 million has been pledged to trail low-emission feed supplements. In addition, $32 million will go towards the federal government’s Agriculture Stewardship program. This acknowledges farmers who have invested in processes that promote biodiversity.
The funding includes an amount that will be put towards developing a platform which brings together people buying and selling biodiversity implementation services.
Farm owners and workers
The bad news when it comes to workers in the agriculture industry is that this year’s budget does not include funding to help overseas workers come to the country. However, there is plenty of good news too.
The government has provided $25.2 million over four years to create jobs and attract workers to the industry, including school leavers. Other funding includes $4.6 million over four years to assist businesses in planning for workers and $1.6 million over two years to adapt the Take Up a Job program which helps people relocate to work including opportunities in the agricultural sector. This will help to develop the agricultural workforce.
Waiving of debts in respect of Farm Household Allowance
For famers who overestimated their earnings as a farming business when claiming for help from the Farm Household Allowance, there is really good news. Business debts accrued as a result of any underestimation are being waived.
This is a weight off the shoulders of any farmers who would otherwise be subject to this debt.
Funding for the Regional Connectivity Program
Another major one of the farming related features of the Australian Federal Budget is the $85 million committed to the Regional Connectivity Program. This program aims to deliver improved broadband and mobile access to 80 regional and remote locations across the country.
The program is also expected to deliver in excess of $15 billion for road, rail, and community infrastructure projects over 10 years.
As well as this connectivity funding, the budget delivers:
- $370 million to help protect Australia from pests. This is especially important given the fact that traces of foot and mouth disease and African swine fever have recently been found in parcels of illegally imported pork. Focussing on biodiversity threats is vital for the government as imported pests and diseases could cost billions of dollars.
- $600 million to create a resilience agency as suggested by the Royal Commission following the 2019-20 bushfires. Given the impact that bushfires and drought have had on farming and overall agriculture in Australia this is welcome news for farmers.
- $65 million for GPs in remote and rural areas. This investment is particularly important for the improvement of aged care in rural communities.
Limited help to address trade concerns
One obvious omission from the budget is a long-term strategy for dealing with sanctions imposed by China. It’s estimated that the sanctions will cost the agriculture industry $40 billion over the next ten years due to the impact on agricultural exports. However, $15 million will be spent in the next four years to promote the trade interests of Australia overall.
The government has given a reason for choosing not to specifically address the China issue. It stated that many of the goods affected have been diverted to other export markets and the overall economic recovery of Australia has not been significantly impacted.
A further blow for exporters is that the International Freight Assistance Mechanism (IFAM) is not being extended beyond September this year. The scheme, which has already had $780 million committed to it, helped exporters who use airfreight for perishable products to access overseas markets during COVID-19 restrictions.
The Australian Federal Budget may not have delivered on everything farmers, and the wider agriculture industry, wanted. However, overall, it is a positive, forward-thinking budget for the industry.