Support but solutions lacking in budget week

Support but solutions lacking in budget week


Opinion
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Neither the government nor opposition addressed the reduction in spending across the agriculture portfolio.

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Travis Tobin, Queensland Farmers' Federation CEO

Travis Tobin, Queensland Farmers' Federation CEO

Last week's federal budget (Tuesday) and budget reply (Thursday) were effectively campaign launches for the government and opposition. It was therefore unsurprising that key announcements and debate centred on tax cuts and health, education and infrastructure spending.

For the first time in 12 years a 'back in black' budget was announced, expected to deliver a $7.1 billion surplus in 2019-20. Over the next four years, $45b of surpluses were forecast. Voters could be forgiven for being a bit sceptical about these numbers - both sides have projected surpluses over the forward estimates based on optimistic assumptions of commodity prices, domestic growth and international economic conditions for over a decade now - but this time it looks like the government has turned the tide.

For agriculture, the big numbers were around support commitments in response to severe climate events - $6.3b for drought; $3.3b for floods; $3.9b to establish an Emergency Response Fund; and $100 million a year out of the Future Drought Fund. Some of the money earmarked for road, rail and water infrastructure under a record $100b infrastructure investment over 10 years will also benefit our sector.

Funding commitments targeted more specifically at the sector's competitiveness, prosperity and growth were much smaller - $29.4m to enhance export markets; $160m for a fifth and sixth round of the Mobile Black Spot Program (MBSP); $60m to improve Sky Muster; $30m to recognise and incentivise farm biodiversity; $8.7m for the dairy industry code of conduct; ongoing funding for the ACCC Agriculture Unit; and increasing the instant asset write-off threshold from $25,000 to $30,000 and opening it to businesses with turnover up to $50m (currently $10m).

The opposition committed to some of these measures including: drought and flood recovery funding; infrastructure; the MSBP and better reliability for the NBN; tax breaks for new equipment over $20,000; and made verbal references to beef roads, fairer prices for dairy farmers and the Murray-Darling Basin Plan. Other relevant commitments were $1b for TAFE and revitalising the Carbon Farming Initiative, details of which are unclear at this stage.

What hasn't been raised or addressed by either side is the reduction in spending across the portfolio. In 2019-20, the total budget for the agriculture department and the portfolio agencies (i.e. statutory authority RDCs, APVMA, MDBA) will be the lowest since 2015-16. The cuts are being made to the administered funds received by the agriculture department, which is down 14.5 per cent from last year and 19.3pc from its peak in 2017-18. This is important because the administered funding is effectively the 'discretionary spending'.

When you consider that the international competitiveness, profitability and even viability of many farm businesses across Queensland is being challenged (by pressures including the unsustainable cost of enabling inputs such as energy and water), and agriculture's global responsibility to sustainably feed and clothe about 10 billion people by 2050, the decline in 'discretionary spending' is critical as it is the bucket of money that largely funds government initiatives and programs that can enhance the sector's competitiveness, prosperity and growth.

In an election year, it is somewhat understandable that agriculture is not showered with money by the government or opposition as the sector does not deliver most of the votes. However, given the domestic and global challenges the sector faces, divestment is not acceptable either.

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