NATIONAL Farmers Federation (NFF) president Fiona Simson says the Coalition government’s delivery of $8.4 billion in the 2017-18 federal budget will help build and complete the long-anticipated inland rail line from Brisbane to Melbourne.
“This is a very good budget for agriculture and a very good budget for rural and regional Australia,” she said while also welcoming the announcement of new funding of $28.5 million over four years, revealed in this year’s budget, to secure the Regional Investment Corporation (RIC).
“It’s a budget focussed on growth in particular through infrastructure investment and the headline item for the NFF of course is the inland rail.
“The $8.4b allocated by the government towards a $10b project will basically get this project built.
“It’s very exciting for farmers - after literally decades of talk - that this project is not only going to get started but it’s also going to be finished.
“We’ve been looking for this commitment from the government for some time now and they’ve given us that commitment and now they’re delivering on it.
“We also believe it will be a public private partnership that will seek to attract the remaining investment needed to finish this project and that will also be good news for many people.”
Ms Simson said she hadn’t yet looked at the finer details of how the ARTC would deliver public and private funding to build the inland rail, by borrowing funds to create equity, but planned to investigate it further.
But she said the rail link “certainly” offers growth opportunities for rural and regional towns and will help farmers cut freight costs.
“We welcome the inland rail as we contemplate manufacturing and value adding hubs, the growth in rail traffic that will occur through some of the regional centres that will have access to the rail line, as well as the efficiencies for farmers and agribusinesses in being able to transport their freight on the line,” she said.
“At the moment freight can be up to 50 per cent of a farmers’ costs per tonne so inefficient freight and inefficient infrastructure is a huge cost to farmers - but this will offer opportunities not just in how we send our produce to market but where we send our produce and will also help to take a lot of freight off the roads.”
Australian Logistics Council managing director Michael Kilgariff also welcomed the $8.4b funding commitment but stressed the rail line needed to be built right through to the ports at both ends of the line.
“The transformative potential of the inland rail project has been talked about for decades, with incremental progress being made over the past several years, including a positive assessment of the business case by Infrastructure Australia,” he said.
“The $8.4b commitment announced in the Treasurer’s speech tonight will finally allow its construction.
“At long last, we can stop merely talking about this project’s potential and instead begin to witness it.
“Establishing a safe, reliable port-to-port rail link for freight between Melbourne and Brisbane is the only way we can simultaneously meet Australia’s burgeoning freight task, alleviate congestion on existing freight networks, create regional jobs and boost growth.
“To fully unleash the benefits of this project, the line must run to the ports of Melbourne and Brisbane, and comprise efficient rail linkages to the ports of Botany, Kembla and Newcastle in NSW.
“We must also support the development of intermodal freight hubs at appropriate intervals along the route.”
NFF give overall budget a B+ rating
Ms Simson also welcomed the government’s extension of the $20,000 immediate asset write-off provisions for small businesses for another year – which were due to sunset on July 1 - despite asking they be extended in perpetuity.
“One year is better than nothing and it will give us an opportunity to lobby again for it next year,” she said.
“The good news is that the write-off has also been extended from companies with a turnover of less than $2m to ones with turnover off less than $10m.
“We really think this will fit a lot of our farm businesses much better.
“The NFF has put the case strongly for continuation of accelerated depreciation, with a community campaign generating hundreds of messages to the Treasurer.
“Accelerated depreciation is helping our farmers invest for the future and we’re thrilled the government has sided with industry on this for another year."
Ms Simson said budget funding to establish the RIC in 2018 for streamlining drought support loans to farmers and to manage water infrastructure loans was also welcomed.
“It’s important that farmers receive support in tough times as expediently as possible and if the funding is being held up in different bureaucratic processes it doesn’t help anyone,” she said.
“We certainly welcome the RIC and while the announcement has been a long time in coming it’s a good outcome.
“Farmers hate red tape and bureaucracy and at times the processes can take so long people wonder if any help is ever actually going to be delivered but this will help and is going to be a much better system.”
The RIC will comprise a CEO and three part-time board members which Ms Simson said would need an understanding of rural and regional Australia and how farmers and agribusiness operated.
She said they would also need commercial, finance skills and potentially legal skills.
“Someone who has been in agribusiness or is currently involved in agribusiness could combine all of those skills,” she said of potential future appointments.
The RIC was announced by Federal Agriculture and Water Resources Minister Barnaby Joyce as a core agricultural policy commitment in last year’s election campaign and he says it will deliver $2b in farm business concessional loans from 2018-19 and the $2b National Water Infrastructure Loan Facility.
Mr Joyce said the government had made an unprecedented level of funding available for loans to support farm businesses, delivering more than $660m in concessional loans to over 1200 farm businesses.
“But we want to ensure that they can access that support as quickly, easily and consistently as possible,” he said.
“The RIC will allow us to deliver loans directly to farmers in need, with a streamlined and nationally consistent application process.
“It will also give us the flexibility to act swiftly to respond when hardships like drought or an industry crisis hit.
“The RIC will also help fast-track the construction of dams and priority water infrastructure projects needed to stimulate investment, economic growth and increased agricultural productivity in rural and regional communities.”
Mr Joyce said the government would introduce legislation this year to establish the RIC as a separate entity within the agriculture portfolio and would also engage with the agricultural sector to discuss the new loan settings, prior to the RIC opening its doors in 2018.
But Ms Simson said digital connectivity would remain a concern for NFF members and marked the government’s 2017-18 budget down, for allowing uncertainty to cloud the Mobile Blackspot Program’s future.
Ms Simson said reliable telecommunications was one of the biggest challenges before the farm sector and regional Australia as a whole.
“The NFF implores the government to ensure the roll-out of the Blackspot Program continues to be prioritised,” she said.
“Tonight’s budget has earned a solid B+ grade for its deliverables to the agriculture sector.
“We will no doubt reap the rewards of this budget’s investments for generations to come.”
Regional Communications Minister Fiona Nash said the Coalition’s Mobile Black Spot Program continued to “roll out” with over 140 new base stations already live and almost 250 due to be live by June 30 this year.
She said the budget allocated $155.9m towards the program over the forward estimates, for a total program spend of $220m from 2015-16 to 2019-20.
“Similarly, the regional NBN roll out, already 75 per cent completed or under construction, continues in 2017-18 with the Sky Muster II satellite now live and the fixed wireless rollout due to be completed by the end of 2018,” she said.
Landcare funding welcome but nothing new
The NFF said the government’s $1.1b commitment over the next seven years of the National Landcare Program provided a clear commitment to support natural resource management initiatives.
“We look forward to working with the government to design the next program to ensure that sustainable agriculture initiatives are well supported,” Ms Simson said.
Australian Conservation Foundation CEO Kelly O’Shanassy said the government had committed to funding Landcare till 2022-23 – but there was no new funding over the forward estimates above what has already been foreshadowed.
“ACF welcomes the government commitment to the future of Landcare and looks forward to further government prioritisation of Landcare through the federal budget,” she said.
But Ms Simson praised the government’s move in the budget to establish a Regional Growth Fund to support strategic projects in local communities.
“Laying the groundwork through major projects and community infrastructure will help our regions get ahead,” she said.
Senator Nash said under the Regional Growth Fund, $200m in additional funding would increase the government’s commitment to the Building Better Regions Fund to almost $500m, supporting more projects across rural, regional and remote Australia.
She said in addition, a $272m fund would be established to drive major transformational projects of more than $10m, to unlock opportunity and potential in the regions.
Long term strategic focus needed
Regional Australia Institute CEO Jack Archer said overall, the Coalition was putting its money where its mouth is in terms of delivering budget funding for major investments in rail and another fund devoted to regional transition.
“It’s particularly refreshing to see regional infrastructure and investment being seen by the government as part of the solution to congestion and high growth rates in Sydney and Melbourne, instead of just the usual toll roads focus,” he said.
“A policy to bind it all together and confirm the long term goals and connections between projects is urgent now.
“With the Regional Growth Fund added to City Deals, Jobs and Investment Packages and the Building Better Regions Fund and regional initiatives in other portfolios we need to make sure this all adds up to long term change for the better in regions.”
Funding for LGAP implementation welcomed
The Australian Livestock Exporters' Council (ALEC) welcomed confirmation in the budget of $8.3m over four years to support the future implementation of the Livestock Global Assurance Program (LGAP).
LGAP is a proposed global conformity assessment program for livestock exports that protects the welfare of animals, fosters continual improvement and the attainment of best practice.
The first-tranche in Commonwealth funding support for LGAP follows an election commitment made by the Coalition last year.
ALEC CEO Simon Westaway (said the funds from the Department of Agriculture and Water Resources would help progress the implementation process.
“The Australian livestock export industry, which delivers $2b in annual exports, welcomes the Australian Government’s commitment towards LGAP, which we believe can further strengthen and drive improvements across global supply chains,” he said.
“Australian livestock exporters are committed to delivering and demonstrating enhanced compliance with Exporter Supply Chain Assurance System standards as well as driving animal welfare improvements across global livestock supply chains.
“Our industry continues to back our world leading approach to animal welfare outcomes in the international livestock trade.
“This funding allocation confirms the Australian government shares that vision and commitment to improved animal welfare outcomes and a more resilient livestock export trade.”
Acting Australian Food and Grocery Council CEO Dr Geoffrey Annison said the government’s investment in infrastructure would be a “significant boost” in stimulating growth and confidence in food and grocery and agribusiness sectors.
“For the food and grocery and agri-food sectors which are spread across the length and breadth of the continent, this massive boost in infrastructure planning and delivery is essential for developing supply chain solutions that create world leading, efficient channels to market,” he said.
“The government’s ongoing commitment to regulatory reform through the through the $300m National Partnership on Regulatory Reform is another important element to improve business conditions by reducing unnecessary restrictions on competition.
“Getting costs down to improve competitiveness is urgent, and regulatory costs and energy costs are two areas where we simply have to break free on the shackles we impose upon ourselves.”