Federal budget: Why Australia wins with bush spending wish list

Initiatives to improve waterfront competition and innovation and the reliability of equipment, fuel and fertiliser imports and other farm and industrial inputs are in the interests of all Australians - and a national security issue - says the National Farmers Federation.

NFF calculated $2.5 billion should be invested over four years to iron out choke points in the rail and road network and make Australia a much more attractive destination for overseas freighters, which often by-passed our "sub standard", congested ports.

Such an infrastructure fund could also bankroll a holistic strategy for more reliable fuel supply, storage and usage options, including the introduction of green hydrogen horsepower.

The peak farm lobby body believed there was already "a bucket of money" set aside by the Coalition Government for infrastructure and capacity building as part of the concessions extracted by The Nationals for agreeing to Prime Minister Scott Morrison's net zero carbon emissions target.

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NFF trade general manager and chief economist, Ash Salardini, said agriculture and the broader economy's international competitiveness was at risk.

Australia needed supply chains defined by innovation, productivity and value creation, not conflict and value appropriation.

Regional and rural communities were growing rapidly and deserved a fair go via investment in infrastructure and capacity to ensure these places were great places to live and work.

NFF also wants Treasury to allocate $1.5b to establish 20 regional development precincts around Australia to entice investment and capacity in critical infrastructure as part of an economic and social growth strategy for regions.

While Mr Morrison has signalled the past three years of unshackled spending must now be followed by budget repair and deficit reduction priorities, a Coalition Government spokesman confirmed this year's federal budget featured more major infrastructure commitments to support regional towns and communities and drive the growth of industries which generated wealth.

While the Coalition "always invested heavily in our regions", the 2022 budget was set to give the bush an even better deal than previous years, including big ticket spending on freight routes in Queensland, Northern Territory and Western Australia.

In general, road improvements and road safety initiatives would be supported by water infrastructure investment such as this week's $500 million commitment to Central Queensland's Urranah Dam.

Analysts at accounting services firm Bentleys have done the sums and noted last year's newly created $110b 10-year rolling pipeline for infrastructure spending saw only about $15.2b committed in the previous budget, which definitely left room for that figure to be matched or exceeded in 2022-23.

However, given current shortages of labour, skills and materials, the coming financial year may not be a choice time for expensive new government infrastructure projects, therefore more judicious, steady funding may take priority to continue existing initiatives.

On the agribusiness front, Bentleys expected a budget focus on at least some of the farm sector's concerns about supply chain resilience, boosting international trade opportunities and labour shortages.

Big commodity prices and volumes expected in almost every agricultural export sector, particularly crops, were strong arguments for building more effective export pathways as part of the government's four-year, $867b commitment to agribusiness support made last year.

After Canberra confirmed in October that current tax incentives to invest in plant and equipment would continue until June, 2023, the farm machinery industry does not expect any more sweeteners to enhance with the popular instant asset write-off scheme.

Tractor and Machinery Association of Australia executive director, Gary Northover, said good seasons and prices had already kept demand for new equipment running red hot, but the tax deduction incentives often encouraged farmers to make bigger or more purchases than first intended, or plan ahead for more strategic investments.

Businesses with an aggregated turnover of up to $5b are eligible to depreciate new business vehicles and equipment.

Meanwhile, COVID-19 and daily warnings about the state of the crisis in hospitals, aged care facilities and the mental health and disability sectors have brought health care to the front of likely "election budget" priority list, according to Bentleys.

The financial services firm is betting on another rise in spending on the National Disability Insurance Scheme, mental health and suicide prevention which had already jumped from $94b last financial year to $121b for 2021-22.

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