03 May 2016

Australian Federal Budget 2016-17: Agribusiness

The Government has announced a number of important measures affecting businesses in the agricultural sector. The key measure is to establish a loan facility to enable State and Territory governments to fund water infrastructure. The Government has also made some minor changes to tariff and excise arrangements for agricultural produce.

National Water Infrastructure Loan Facility

The Government will provide $2 billion in concessional loan funding (over a 10 year period from 1 July 2016) to establish a new National Water Infrastructure Loan Facility. States and Territories will be able to access loans to support major water infrastructure projects such as dams, pipelines and managed aquifer recharge projects. The loans will be accessible with an interest-only period up to 5 years from the beginning of the loan term, with borrowers having a further 10 years to repay the principal and any additional interest.

The Government expects this measure to be revenue-neutral, with interest revenue offsetting the cost to Government of providing the loans.

Agricultural Production Levies

The Government has announced several changes to agricultural levies and export charges to take effect from 1 July 2016. The key changes are:

  • Fodder – a new mandatory levy of $0.50 will be payable on all hay and straw prepared for export;
  • Deer – there will no longer be a levy on domestic production and sale of deer velvet, customs charges on export of deer velvet or customs charges on exports of live deer;
  • Forestry – the Emergency Plant Pest Response levy for private plantation logs will be $0.105 per cubic metre to fund the Government’s emergency response to giant pine scale; and
  • Citrus – the citrus levy will increase by $1.50 per tonne (a $1.23 increase in the statutory levy and export charge for R&D, and a $0.27 increase in the Plant Health Australia levy).

Excise Refunds for Distillers

As part of the Ten Year Enterprise Tax Plan, the Government will extend the brewery excise refund scheme to distillers of low strength fermented beverages such as non-traditional ciders (but not alcopops) from 1 July 2017.

Export and Regional Wine Support Package

The Government will provide $50 million to the Australian Grape and Wine Authority over four years for an Export and Regional Wine Support Package. This package will fund various initiatives which will promote Australian wine and Australian wine tourism both internationally and within Australia.

For a full analysis of this year's Budget measures, please see Australian Federal Budget 2016-17.

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