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Budget ‘08 unlocks capacity for economic growth: NFF

13 May 2008

TONIGHT’S Federal Budget addresses major challenges Australian agriculture must overcome to provide food for Australians and the world – a changing climate, chronic skills shortages, inefficient transport and communications networks, and water reform – according to the National Farmers’ Federation (NFF).

"This Budget combines essential spending on building capacity across key areas that hamper economic growth – where Australia desperately needs to be more astute and efficient – with savings at the margins,” NFF President David Crombie said.

"It balances concerns that $31 billion in tax cuts may further fuel inflation against spending cuts while, importantly, also targeting investment to boost our climate change adaptation and drought mitigation response, developing and building our trade skills base, overhauling our rundown infrastructure and ensuring water-use efficiency reform is holistic and practical.

Climate Change & Drought Preparedness

"The $130 million under ‘Australia’s Farming Future’ begins the shift towards the NFF’s call to better prepare our agricultural productive base for less water, increased climate variability and the possibility of longer periods of drought. It’s about long-term management, preparedness and planning.

"We have long advocated a ‘generational shift’ in dealing with drought – especially in the face of climate change. While the Government must continue to address the ‘here and now’ of drought through Exceptional Circumstances as the first priority, equally, we must cast an eye to the future.

"Australia needs to better prepare for droughts to reduce their impact. That demands a new cooperative partnership between government and farmers to invest and work together to better drought-proof Australia and, ultimately, shift the policy focus from ‘drought relief’ to ‘drought management and preparedness’.

"Even when the current drought breaks, which it will, others will come. It is smarter to invest in more climate- and drought-resistant practices today and, over time, reduce the need for drought relief, while ensuring that Australian farmers emerge the other side of the current drought able to meet mounting domestic and international food security issues.

Education & Training

"We are concerned about the potential restrictiveness of the $11 billion ‘Education Investment Fund’ and its incapacity to deliver flexible training for regional students. The NFF will address this issue with the Government to ensure rural and regional Australia gets a fair deal.

"However, we are relieved the Government has abandoned plans to scrap the $47.7 million ‘Apprenticeship Incentives for Agriculture and Horticulture’. The scheme puts farm apprentices on more equal footing with other trades already receiving benefits.

"The NFF has been at great pains, when lobbying the Government to reconsider axing the initiative, to highlight that when farmers emerge from drought they will need a higher skilled workforce than ever before – in fact, almost 80,000 extra highly-skilled employees will be needed – and, therefore, we must be able to compete for the skills pool alongside other trades without disadvantage.

"Further, the Government’s bid to curb inflationary pressures through investment in capacity building requires skills-based education to be a core feature, especially to regenerate the farm sector, which underpins 12% of GDP. Therefore, rural and regional Australia must not be short-changed under the ‘Education Investment Fund’.

"Meanwhile, it appears that some outcomes that were delivered by the $24 million ‘FarmBis’ programme can now be achieved under the training component of the new ‘Australia’s Farming Future’ programme. While the details are unclear from tonight’s Budget papers, we will assess the changes and their overall impact for farmers.

Infrastructure

"Tonight’s announcement of the $20 billion ‘Building Australia Fund’ is a positive move towards addressing critical transport and communications infrastructure. Too often Australia’s farmers face antiquated and grossly inefficient national and regional infrastructure in these areas, undermining the farm sector’s strong record of productivity growth (averaging 3.8% per year for the past 20 years).

"Regarding transport, this must be more than just another big spending announcement. With Australia’s freight task set to double by 2020 – and triple along the eastern seaboard – it underscores the need for Government and industry to work in-tandem to strategically overhaul and integrate freight infrastructure... across road, rail, air and sea systems.

"Inland transport systems and, specifically, the adoption and creation of ‘freight hubs’, must be a priority, and our shipping port capacity needs to be boosted to meet bourgeoning global demand. We must break away from the current fragmented approach where road and rail infrastructure decisions are made independent of one another – all modes are vital and must be viewed holistically.

Water

"The Government’s $13 billion ‘Water for the Future Plan’ essentially revamps the ‘National Plan for Water Security’ and adds the Rudd Government’s urban water election commitments, The Living Murray and the Australian Government Water Fund.

"The new Plan allocates $3.1 billion for the purchase of water – importantly, from ‘willing sellers’ – and $5.8 billion for sustainable rural water use and infrastructure. The NFF supports the new Plan. However, we continue to engage with the Government on its acceleration of water buy-back – already committing $400 million – while we are yet to see any detail about the on-farm infrastructure modernisation and water-saving improvements that will allow farmers, or groups of farmers, to improve efficiencies and off-set the impact of water buy-back.

"A holistic approach, underpinned by a transparent water market, is paramount if the Plan is to work and appropriately balance environmental needs with practical food production."

[ENDS]

Media Enquiries: Brett Heffernan on (02) 6273 3855 or 0408 448 250.

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