2022 Federal Budget: What it means for Regional & Agribusiness

Regional infrastructure was a big theme in the 2022 Federal Budget – along with water and a carbon credit tax break.

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Highlights

The Budget allocates an additional $135.6m over 5 years to support the NFF’s ambition for a $100b industry by 2030. Key measures include: 

$61.6m for biosecurity infrastructure 

• $20.1m for on-farm biosecurity 

• $20m for pest and weed reduction 

• $15.4m for agricultural shows and field days 

• $12m for trade events 

• $6.6m for the AgMove program 

The National Water Grid will receive $6.9b, of which around $1b is in the budget and forward estimates period, for a range of water projects. This includes Hells Gate Dam, Paradise Dam improvement, Dungowan Dam and pipeline, Darwin water infrastructure and Emu Swamp Dam and pipeline. 

The Government will provide $114.6m over 5 years for forestry and fishing sustainability, including $86.2m for new plantations. 

Murray-Darling basin will receive an additional $139.9m to improve environmental outcomes and economic development, to be met from existing departmental resources. 

There is an additional 85.4m for drought readiness, to be met from the Drought Future Fund. 

While the Budget has halved fuel excise for the next six months (a cut of 22c/l), its impact for agriculture is likely to be limited by the fact that agricultural machinery was already eligible for the fuel tax credit. There will be however be a benefit for vehicles used on road, such as trucks and utes. 

Four regional areas are set to receive $7.1b over 11 years in a major investment into the Energy Security and Regional Development Plan, which will focus on improving infrastructure and developing supply chains. The regions are the Northern Territory, North and Central Queensland, the Pilbara and the Hunter. Some of the funding is existing and some beyond the forward estimates. The Budget provides around $1.4b over the course of the Budget and forward estimates period. 

Key focus areas for each region are as follows: 

• Northern Territory: manufacturing, onshore processing of critical minerals and renewable energy infrastructure. 

• North and Central Queensland: water infrastructure and supply chain improvements to support agriculture. 

• Pilbara: mining, mineral processing, manufacturing, hydrogen and renewable energy. 

• Hunter: transport infrastructure to improve supply chains and diversify the economy, facilitate the development of new industries. 

A new Regional Accelerator Program (RAP) will be established, providing $2b over 5 years for economic growth and productivity in regional areas. It will provide “dedicated funding for regional businesses and communities to access programs targeted to local priorities in infrastructure, manufacturing and industry development, skills and training, research and development, and education”. 

The Budget provides $1.3b over 6 years for improved regional mobile services and internet. $1.12b is allocated over the Budget and forward estimates period. 

What did the business want?

The National Farmers Federation (NFF) has set a target for Australian agriculture to be a $100 billion industry by 2030 – a vision shared by industry and Government. The NFF Pre-Budget Submission recommendations can be summarised under the five pillars of the NFF’s 2030 Roadmap: 

1. Customers and Value Chains – specific measures include: establishment of an Infrastructure Fund focused on productivity improvements within the supply chain; 20 Regional Development Precincts across Australia, including funding for investment in priority precinct infrastructure; the waiver of export certification fees, and the continuation of the International Freight Assistance Mechanism until international borders are fully reopened; establishing the Office for the Perishable Agricultural Goods Advocate. 

2. Growing Sustainably – specific measures include: continuation of pilot and expansion of programs such as the carbon and biodiversity and enhanced remnant vegetation programs, including contribution to the development of natural capital markets; and support complementary measures in the Murray Darling Basin Plan. 

3. Unlocking Innovation – specific measures include: establishing a Regional, Rural and Remote Telecommunications Fund to resource ongoing mobile network expansion; the Mobile Blackspots Program; the establishment of the Australian Local Power Agency and the associated Local Power Fund. 

4. Capable People and Vibrant Communities – specific measures include: a centrally managed Seasonal Worker Fund; initiatives which promote education and training for the agriculture sector; mental health awareness and early intervention programs in rural, regional and remote areas. 

5. Capital and Risk Management – specific measures include: retention in perpetuity of the fuel tax excise rebate for off-road use; further round of the Emergency Water Infrastructure Scheme; review and reform of the tax system and drought measures, with respect to definitions of a primary producer to incentivise sound on-farm risk management. 

GrainGrowers noted the Australian grains sector was in a prime position to drive continued economic growth in the COVID-19 recovery. GrainGrowers sought initiatives in four key areas in their pre-budget submission: 

1. Trade and Market Access & Quality – activities that accelerate market development; increase focus on the elimination of commercially meaningful non-tariff barriers; and an Australia-India Agreement that improves market access. 

2. Freight, Infrastructure and Telecommunications – improvements to Australia’s logistics system; removing bottlenecks along grain freight routes and key ports; more funding for local road upgrades and maintenance; improving telecommunications infrastructure and access to both broadband and voice services. 

3. Farm Business and Economics – Government review of the Farm Management Deposit. 

4. Innovation, Farm Inputs & Biosecurity – more opportunities for domestic manufacturing of fertiliser, chemical, fuel, spare parts, etc; improving price transparency in fertiliser markets; AgVisa to be accessible for all of commodities; Government support for initiatives like GrainGrowers Grains Employer of Choice Program; and a National Biosecurity Strategy. 

5. Sustainability, Climate Change & Natural Resource Management – more education, awareness programs & tools to measure and integrate carbon, biodiversity, soil and environment health data; a new Regional Investment Corporation (RIC) loan to assist farmers undertake emissions reduction activities; research and technologies to reduce grains related emissions and support pathways to carbon neutrality (net zero) or better which are economically and socially feasible for the grains sector. 

Read more in our Federal Budget 2022-23 – what does it mean for Regional and Agribusiness report