There were both opportunities and shortfalls delivered in the Labor government’s federal budget for agribusinesses. Following the Coalition’s March 2022 budget announcements, there are changes that primary producers need to be aware of.
Of particular significance are the initiatives that WERE NOT mentioned, which reflects Treasurer Chalmer’s proposed focus on tightening the purse strings through these tougher economic times.
For example, neither the taxation of carbon abatement projects nor the Patent Box Scheme featured in this budget. These schemes would have seen carbon abatement projects treated as Primary Production income and increased innovation in the agriculture sector. Their absence dampens expectations for increased government investment in sustainability and innovation for the ag sector.
The government also announced it would not proceed with the measure to allow taxpayers to self-assess the effective life of intangible depreciating assets, which was originally announced as part of the 2021-22 budget. This will largely affect ag-tech businesses whose assets are mostly digital.
Several key water infrastructure projects have also been shelved, including the pulling of funding for the Hells Gate dam in North Queensland.
On the bright side – there are some measures that provide opportunities to primary producers:
In the wake of foot-and-mouth and lumpy skin disease, the Government will bolster Australia’s biosecurity system with a boost of $134.1 million. This includes $46.7 million to strengthen contact tracing of livestock from paddock to plate across Australia.
The government is aiming to support small to medium businesses to fund energy-efficient equipment upgrades. This could provide opportunity for small to medium primary producers looking to increase energy efficiency and will include planning, equipment and facility upgrades with the goal to reduce emissions or improve management of power demand.
Technology and digital connectivity
The introduction of the National Reconstruction Fund will provide $15 billion in investment into key sovereign manufacturing projects. There will also be a chance for Australian farmers and agribusinesses to improve their digital connectivity through the $2.4 billion investment into NBN and a further $1.2 billion to provide a better connection for regional and rural businesses.
If you’d like to discuss what this budget might mean for your business, contact us today. We can help you get where you want to be.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.