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Farm stimulus to spark economic jump-start

3 February 2009

WITH the Australian Government releasing its $42 billion economic stimulus package mark II, capital works investment in regional Australia is vital to ensure farm production can continue to keep the national economy afloat.

Today’s announcement mirrors the National Farmers’ Federation’s (NFF’s) imperatives for sustaining Australia through the global economic meltdown and creating jobs by putting Australia ‘front-and-centre’ in overcoming the world food crisis and, in the process, generating lasting economic prosperity.

“If the Australian farm sector is to remain Australia’s economic anchor through the turbulent times ahead, the Government must ensure regional Australia looms large in its stimulus thinking,” NFF President David Crombie said.

“The Government’s $950 tax-free bonus for all drought-affected farmers – reaching some 21,500 farmers in need – will be a much-needed fillip to families and regional economies.

“Likewise, the regional infrastructure package – including regional schools’ share in the $14.7 billion maintenance and upgrade works (at $200,000 for each school), $500 million for regional development projects, $150 million to repair regional roads, and $90 million for black spot roads – will see a major revamp of country services and shore-up jobs in local communities.

“Further, the $2.7 billion tax break for small businesses – amounting to a tax deduction on tangible depreciating assets over $1,000 for all farms with a turnover of less that $2 million per year, will be greatly appreciated by those small family-owned farms.

“As for those farms with annual turnovers over $2 million, the tax deduction kicks-in at purchases over $10,000. This may be the incentive to tip the balance in favour of farmers continuing to invest in new equipment, which can help to keep the economy ticking over.

“Obviously, the Government needed to act to spur spending and shore-up various sectors across the economy. But, equally, the Government is rightfully mindful of capital works projects to fill jobs now and, at the same time, generate long-term efficiency and productivity gains.

“In this crisis, major infrastructure development can be a panacea for our immediate needs but also address the strategic imperative for economic growth.

“When you throw in the worsening world food crisis – as the global population grows by 100 million people a year and there is less land and water for food production – it’s is a compelling case for the Federal Government to continue to invest in Australia’s agricultural capacity.

“In other words, if you have the money to inject into the economy, make sure you invest in projects that will make a difference. That means making sure regional Australia is front-and-centre for those projects.

“Right now, agricultural production is the only thing keeping the Australian economy out of the red. Australia’s most recent national account figures show agriculture (recording 14.9% growth) has been keeping the Australian economy from slipping into negative territory.

“On top of that, over the last few months our farmers have employed an additional 19,000 people... taking our total direct employee figures to 315,000 Australians – and we have the capacity to employ more.

“It is not widely known just how important agriculture is to the Australian economy. It’s only in the midst of an economic crisis that people appreciate our farm sector actually underpins 12% of GDP, 1.6 million Australian jobs throughout the economy and 20% of our national exports.

“Today’s package, and its imperatives, complement the capacity building plan we laid out in our 2009 Federal Budget Submission.

“Our fervent call has been for the Government to respond positively to the challenges of today with a plan for the future, and that the vital role Australian agriculture plays as the driver of national prosperity is recognised and given the jump-start needed to keep the economy moving.”

[ENDS]

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

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