2021 Federal Budget: What It Means For Farmers & Regional Australians
Regional Australians will be breathing a sigh of relief after Treasurer Josh Frydenberg promised a minimum spend of at least $630 million to improve aged care in rural and remote areas and funnelled $200 million into a national soil strategy. Frydenberg has also committed $370 million to strengthen the nation’s biosecurity measures, however, local farmers and livestock exporters hoping for assistance to recruit overseas or expand into overseas markets will be disappointed.
By extending tax incentives, spending big on soil management and biosecurity measures, the federal government hopes Australian farmers will recover from years of environmental hardship and drought, and boost the industries value to over $100 billion by 2030.
Regional health is also receiving a much-needed boost with aged care and rural GP’s receiving a bump in funding. There are also some major, and much-needed infrastructure spending to improve rural roads and telecommunications. Keep reading below for insight into the key budget announcements for rural Australians and Farmers from the 2021-22 Federal Budget.
Instant Asset Tax Write-Off
The federal government has decided to extend its extremely popular tax incentive that allows almost all Australian businesses to write off assets almost instantly. Last October, the government expanded the instant asset write off incentive by lifting the value of eligible assets from $30,000 to $150,000. It meant businesses could claim an immediate deduction for an asset purchased between March 12 and December 31, 2020, with an additional six months to first use or install that asset.
As part of the 2020 federal budget, the government also introduced temporary full expensing, which has allowed Australian farmers to fully depreciate an eligible asset in a single tax year from October 2020 to June 2022. The program had been expected to end next year but it will now be extended until June 30, 2023. Read our blog about how Australian farmers can take advantage of instant asset write-offs for more information.
One of our most important and undervalued resources, Soil is a large focus of the government's agriculture spend. Frydenberg has shovelled almost $200 million over four years to implement the National Soil Strategy, which includes a two-year pilot to provide rebates for farmers who share the results of soil testing. This pilot program is also expected to be used to purchase privately-held soil data, so If you’ve been tracking your farm’s soil health over the years you may be in luck. For further information about the soil strategy contact the soil strategy secretariat or call 61 2 6272 3933.
The Government has a clear focus on helping Australian farmers reduce their environmental impact with $59.6 million invested to trial low-emissions feed supplements for livestock, and a National Soil Carbon Innovation Challenge is expected to help lower emissions through soil management.
Farmers who’ve invested in regenerative agricultural practices have been acknowledged with an additional $32 million will go to the federal government’s Agriculture Stewardship program to promote on-farm biodiversity. This funding includes plans to develop a trading platform that links buyers and sellers of biodiversity implementation services and an enhancing remnant vegetation pilot, that could even see Australian farmers paid to leave native vegetation on farms.
Farm Owners & Workers
Unfortunately for growers, there is no new funding in this year's budget to assist overseas workers to come to Australia. The budget does however include a $25.2 million dollar commitment over four years to help attract Australians to modern agriculture job opportunities. This includes seed funding for an industry lead initiative to attract school leavers into the agriculture industry.
$4.6 million of additional funding has also been allocated over four years to help agricultural businesses plan for new ways of working, and another $1.6 million over two years to
There is also an allocation of $4.6 million over four years to help agricultural businesses plan for workers, and $1.6 million over two years to improve the Take Up a Job program which helps those on jobseeker relocate for employment.
The National Farmers' Federation estimates the cost of international trade disruptions, particularly the sanctions imposed by China, will cost the agriculture industry close to $40 billion over the next decade. Unfortunately, there has been no long term strategy set out by this year’s budget. Instead, there will be $15 million spent over the next four years to promote Australia’s trade interests.
The reasoning behind the lack of long term strategic action is outlined in the budget that "while the ongoing trade restrictions from China have had significant impacts on specific firms and regions, many goods targeted by the restrictions have so far been successfully redirected to other export markets, with limited impacts on Australia's overall economic recovery".
The International Freight Assistance Mechanism (IFAM) has not been extended beyond September this year, which will disappoint exporters who’ve been benefiting from the program. $780 million has been committed to IFAM so far, which was developed so exporters reliant on airfreight for perishable produce could access overseas markets when COVID-19 restrictions limited flights out of Australia.
Farm Household Allowance Debts Waived
The business debts accrued when farmers receiving the allowance underestimated their earnings have been waived in line with a recommendation from the 2018 FHA review. The allowance was received by more than 5,000 Australian farmers experiencing financial hardship.
A Better Connected Regional Australia
The 2021 budget has committed $85 million to the Regional Connectivity Program that is set to deliver more broadband and mobile services to more than 80 locations across regional Australia. This project will also deliver more than $15 billion over 10 years for road, rail and community infrastructure projects throughout Australia.
Along with the above announcements, the government has also allocated $370 million to protect Australia from pests and disease, $600 million for a new resilience agency promised after the Royal Commission into the 2019-20 bushfires, and $65 million for rural and remote GPs.
Make sure you check out Ag Superstore’s great range of farming and agriculture products and take advantage of the instant asset write-offs being offered in this year’s federal budget. As always if you’d like any advice on anything agriculture or farming-related give the team at Ag Superstore a call on 1300 326 453