The Australian Federal Budget, handed down last night (8 May 2012) by Treasurer Wayne Swan has been described by the Treasurer as a “battlers’- budget.” The Budget allocates some extra funding for families and low income earners and forecasts a surplus of AU$2.5 billion by the end of June 2013.

However, commentators and industry leaders are encouraging scepticism or disappointment with its numberous policy reversals and lacking of any real policy initiatives. There is little in the budget to encourage any part of the food industry.

The Gillard Government continues to emphasise the importance of returning the Budget to a surplus although the Federal Opposition is claiming the previous Budget similarly promised a return to surplus that had not been achieved.

Key measures that were announced and will concern food companies are as follows:

Company tax cut scrapped

The Government will now not be proceeding with its previously announced promise to lower the company tax rate from 30 per cent to 29 per cent from 2013.

Company tax cuts had been heralded in a government announcement on 10 May 2011 for the 2011–12 Federal Budget. Draft legislation to implement this measure was released on 14 March 2012. Yet these have now dropped off the Government agenda.

The government is proceeding with its new mining tax and carbon price scheme as revenue-raisers.

New AU$29.8 innovation centre to boost Australian manufacturing 

The 2012/13 Budget includes funding for the creation of a new AU$29.8 million Manufacturing Technology Innovation Centre which the government says “will bring our brightest researchers and manufacturers together to drive innovation through new and improved industrial products and processes.”

This Centre will be an industry-led initiative that the government hopes will “create sectoral collaborations involving major manufacturers, small and medium enterprises (SMEs), public research agencies, including CSIRO, and universities.”

The government says that the Centre will also work “to facilitate access by manufacturing SMEs to appropriate facilities with the aim of reducing risks associated with product development.”

Funding to “build a sustainable biosecurity system”

The 2012/13 Budget includes AU$379.9 million over seven years for the construction and operation of a new Australian Government owned and operated post entry quarantine facility for high risk plant and animal imports.

This funding will deliver a state-of-the-art facility consolidating existing animal and plant services to a single integrated site near Melbourne.

On top of wider biosecurity investments, a separate $95.9 million over seven years is included in the Budget to fund existing eradication programs for nationally significant pests and diseases.

DAFF priorities for 2012/13

According to the Government’s Department of Agriculture, Fisheries and Forestry, financial priorities for 2012-13 will include:

–        Continuing to reform national drought programs from crisis-management to preparedness;

–        Delivering the National Food Plan – Australia’s first strategic look at the long-term sustainability of food production;

–        The continuous improvement of animal welfare domestically and overseas including completing the implementation of the new regulatory framework for Australian livestock exported for slaughter;

–        Working closely with other agencies to maintain and increase access to global markets for Australia’s agriculture, fish, forest and food products.

AFGC disappointed with Federal Budget

The Australian Food and Grocery Council (AFGC) has expressed disappointment with this year’s Federal Budget, describing it as insufficient to improve national policy settings for food and grocery manufacturers in Australia.

The AFGC spokesperson said that despite Prime Minister Julia Gillard’s announcement last week that Australia could play a key role in global food security, there was little in the Budget to enable industry to become more competitive or a “global leader in food production”.

AFGC Acting Chief Executive Dr Geoffrey Annison said, “Overall, this Budget was more business-as-usual rather than a bold new plan for industry to become more competitive domestically and globally and continue to invest, innovate and create jobs.

“It’s also disappointing that there was no new funding for the long-anticipated National Food Plan, despite the imminent release of a Green Paper on this important blueprint,” he said.

FSANZ budget decreased

Dr Annison said the AFGC was also concerned that the Federal Government decreased the Food Standards Australia and New Zealand (FSANZ) budget at the same time as the organisation is expected to undertake a substantially increased workload associated with the proposed draft Health Claims regulations.

Dr Annison said, “Having a poorly resourced regulator is not in the best interest of food and grocery manufacturers – or for Australian consumers.

“We would urge Federal Government to continue to work closely with industry on reforms to ensure we have a thriving, prosperous and robust food and grocery industry that will contribute many benefits to Australia’s economy including job opportunities, especially in rural and regional areas,” Dr Annison said.