This article was written by Rhys Casey, James Funder and Julian Ilett.
In a boost for the agricultural sector, the recent Australian Federal Budget contained a number of key initiatives, including:
- $8.4 billion in funding for the Brisbane to Melbourne Inland Rail project;
- $1.1 billion in continued financial support for the National Landcare Program;
- $8.3 million in funding to support the livestock export industry;
- tax concessions enabling small agricultural businesses to instantly write-off assets up to $20,000;
- establishment of the Regional Investment Corporation to administer concessional loans to eligible farmers for refinancing purposes; and
- stricter compliance measures for food importers.
Inland rail project
The Government has committed an additional $8.4 billion over the next 7 years to the Australian Rail Track Corporation for the development of the rail freight network between Brisbane and Melbourne. The 1,700 kilometre rail line is estimated to cost approximately $10 billion and is expected to be completed by 2024-25. This budget initiative, coupled with previous budget spending, means the project will be almost entirely Government funded.
The freight-exclusive project is intended to improve supply chains for farmers along the eastern seaboard, reducing transport costs for regional producers and increasing efficiency.
Landcare funding commitment
Funding towards the National Landcare Programme (NLP) will continue, with a $1.1 billion commitment over the next 7 years. Included in this is a one-time $100 million capital injection to be directed towards:
- new Indigenous Protected Areas under the Indigenous Protected Areas Network ($15 million); and
- continued support for various landcare-related community groups and grants programs ($85 million).
The NLP is intended to drive efficient natural resource management and environmental sustainability initiatives, as well as promote positive Indigenous outcomes.
Livestock Exports Global Assurance Program
The Government has allocated $8.3 million over the next 4 years to establish an assessment and certification framework referred to as the Livestock Exports Global Assurance Program. The Program is designed to assist livestock exporters to meet regulatory obligations under the Exporter Supply Chain Assurance System.
The 2015-16 Budget measure allowing an instant tax deduction for eligible asset purchases under $20,000 will continue for a further 12 months. Eligible assets must be used or installed for use by 30 June 2018 to qualify for the deduction.
The concession will be available to small agricultural businesses with an annual aggregated turnover of less than $10 million. This will allow eligible farmers to immediately write-off assets such machinery and equipment up to $20,000.
Establishment of the Regional Investment Corporation and funding of concessional loans
The Government intends to establish the Regional Investment Corporation (RIC) as a Corporate Commonwealth Entity with a $28.5 million allocation of funds over the next 4 years. The RIC will be tasked with administering $4 billion in concessional loans (already budgeted) during the 4-year period, part of which will be allocated to the Farm Business Concessional Loan Scheme.
The Farm Business Concessional Loan Scheme allows recipients of the Farm Household Allowance who have already received their full entitlement to access additional funds through a concessional loan. The loans are to be used for debt refinancing purposes only, and must not exceed:
- 50% of their current debt position; or
- $1 million.
The establishment of the RIC is intended to streamline the delivery of these concessional loans as well as improve the consistency and efficiency of the loan approval process.
Strengthening Australia's food safety system
The Government will introduce policy reforms to Australia's food safety regime, placing stricter compliance requirements on importers from 2017-18. Documentary evidence will be required to establish that imported food is sourced safely in accordance with internationally recognised food safety measures. The policy will also provide for additional powers for Australian officials to monitor and manage food safety risks.