Jan Davis: Budget proves a mixed bag

I’m sure many of you sat on Tuesday night and watched a Treasurer deliver the federal Budget speech – just like I did. You may have remained tuned for the highlights and deep analysis – just like I did. And you probably wondered why you hadn’t picked up all these stats and nuances from your 30-minute observation of the Treasurer on his feet – just like I did.

It happens every year. “I didn’t hear him say that,” you muse.

But the budget speech is just the tip of a very deep iceberg about which we mere mortals remain as ignorant as the captain of the Titanic. The details are buried in the reams of papers that make up the appropriation bills and supporting materials.

A range of experts, boffins and media commentators are given the chance to plough through these papers ahead of the Treasurer’s budget day speech. They are literally locked in a room for hours with nothing other than these piles of papers and notepaper, pens and bottled water. Mobile phones are confiscated, so there can be no leaks from within the lock up. Then, as the TV cameras zoom in on the Treasurer, the doors are opened and there is a stampede to prepare press releases and other media commentary.

So don’t feel too badly: that’s how those people know all those details that we thought we’d missed.

There wasn’t much commentary from the experts on budget night about agriculture, so we had to drill down into the detail of the Budget documents the next day to glean the impact.
In the TFGA’s view, it was the proverbial curate’s egg for our farmers: good in parts.

Agriculture depends on sound, up-to-date, progressive research and development to remain competitive. This has been reinforced by much expert advice over recent times, through government reports such as the Productivity Commission, the Asian Century report and the National Food Plan. Yet some important rural important research and development programs will be significantly affected by funding cuts.

CSIRO will lose $146.8 million and more than 500 jobs over four years. Funding for the Co-operative Research Centres program will be cut by $80 million (20 per cent of the overall program budget) over the same period. Sources inside the program say around 30 groups have spent hundreds of thousands of dollars bidding to set up new CRCs; and now the next funding round has been entirely scrapped. The Rural Industries Research and Development Corporation also had its funding cut.

These cuts are bad news for Tasmania, where we have had a long history of engagement with these organisations, particularly for forestry and fisheries.

While we welcome the announcement of a further $100 million for R & D over the period of the forward estimates, this doesn’t really replace what has been lost. Furthermore, we don’t know how it is it be allocated, what the priorities are, or even if any of these funds will flow through to Tasmania.

One of the most disappointing decisions is the reduction of $483 million in funding for Landcare nationally over the next five years; but there are no details yet about what it will mean for Tasmania. There is an allocation of $2 billion in total to natural resources programs, including $1 billion for the new National Landcare Program, formed by merging the old Landcare program and Caring For Our Country, and $525 million over four years for a new Green Army.

However, it is unlikely that these investments will deliver the on-ground outcomes that the Landcare program has delivered over many years. Farmers and Landcare groups contribute $4 to $5 for every dollar that has come from the government. That’s a win/win outcome in anyone’s language. As best we can tell, these new programs will be driven from government rather than from on-ground; and that means that leveraging opportunities will be limited if not lost.

There were cuts in funding for state governments to provide quarantine services. Yet an extra $20 million will be provided to quarantine authorities to tackle pests and diseases.

Another budget loser is the ethanol and biodiesel industry, which will have ramifications for our private forestry industry. Grants to encourage ethanol and biodiesel production will cease immediately, and excise on ethanol will be gradually lifted from zero to 12.5 per cent. This removes the attraction of these potential alternative markets.

However, despite the exhortations of the Commission of Audit, the Tasmanian freight equalisation scheme remains intact; and the diesel fuel rebate also survived unscathed.

Nationally, agriculture will also share in the benefits of the big infrastructure program, including improved highways and better port access.

TFGA will be working to make sure the benefits of these and other new programs flow through to Tasmanian farmers. That said, we still face the same real issues: freight costs, the cost of regulation and the disappearing vision of level playing fields in our markets.

In summary, then, this was a very confusing budget. There were lots of mixed messages, with no clear vision or narrative. We can only hope that the bigger picture becomes clearer over time.
TFGA chief executive Jan Davis