Budget 2022: What’s in it for agriculture and farm businesses

At the latest Federal Budget handed down on Tuesday, March 29, Federal Treasurer, Josh Frydenberg, has announced a raft of support for the agriculture and rural sectors which includes improving telecommunications in regional areas, boosting Australia’s biosecurity measures and encouraging regional modern manufacturing, among others.

It also includes more support for businesses and individuals, such as lowered fuel excise and employment incentives to help reduce the costs of living and running a business.

Here are some of the key Budget measures aimed at the regional and agriculture sectors, as well as at businesses and individuals in the aforementioned sectors.

The Government is investing $2 billion to accelerate growth in regional areas.

Under this program, the Government has identified 12 key focus areas where the money will be channeled to, which include supply chain resilience, education infrastructure (in regional Australia), modern manufacturing, export market development and more.

Telecommunications and internet connectivity in rural Australia has been a hot topic for a long while, with farmers and rural Australians still getting the short end of the stick when it comes to being connected to the world. 

The COVID-19 pandemic shone a light on the importance of connectivity when it forced conventional face-to-face practices such as health consultations and education online.

Hence, the Government has committed a further $1.3 billion to regional Australia telecommunications to help rural Australians not just be better connected to other parts of the country but also the world.

Of the funds, $811.8 million is committed to improving mobile coverage on regional roads and adjacent premises and tourist hotspots. $480 million will go towards improving existing wireless and satellite services, in partnership with NBN Co.

Australia’s agricultural produce are some of the best in the world and the Government is aiming to make the trading process much easier and efficient to allow Australian agricultural businesses to compete internationally.

Therefore, the Government is investing $267.1 million into a Simplified Trade System to streamline trade processes and reduce the cost and time of exporting.

This includes a further $127.4 m to the Digital Services to Take Farmers to Markets initiative, that aims to further transform the delivery of government agricultural export systems and services to agricultural exporters, farmers and producers.

Australia has perhaps one of the tightest biosecurity systems in the world, and the Government is committed to further protect Australia from threats of diseases to its flora and fauna by investing $91.6 million to various initiatives to boost biosecurity measures.

Out of that, $61.6 million is going towards Northern Australia’s frontline biosecurity, including to safeguard our northern border against lumpy skin disease and other emerging vector-borne animal diseases.

A $20 million grant program will be delivered through interested states and territories to improve on-farm biosecurity and enhance pest and disease traceability.

A further $27.3 million worth of funding will go towards promoting biodiversity stewardship and help farmers build new income streams through the stewardship program.

The Government will also expand its National Stewardship Trading Platform to make trading easier, and improved baseline data on biodiversity will help farmers and buyers trade with confidence.

In addition, from July 1, 2022, farmers will able to treat revenue from the sale of Australian Carbon Credit Units (ACCUs) as primary production income, providing access to income tax averaging arrangements and the Farm Management Deposit scheme. In addition to reducing taxes for farmers, the tax amendment has been designed to help Australia deliver on its net zero emissions target by 2050.

The Government is investing $23.4 million over 4 years to expand its patent box scheme to include agricultural innovations. 

Under the scheme, companies with an eligible Australian patent and earning income from it will get a tax break. Instead of getting taxed up to 30 per cent for large businesses, companies will only be taxed a flat 17 per cent, effective from July 2022. Previously, the scheme only applied to companies and patents in the medical and biotechnology sectors.

The program has been designed to encourage Australian companies to develop and apply their innovations in Australia.

The pandemic has almost wiped out two years’ worth of trade shows and events, which is why the Government decided to put a further $15.4 million to deliver a second round of the oversubscribed Agricultural Show Development Grants Program.

In addition, the Government will also sponsor large agriculture trade events such as Beef Australia through a $12 million investment.

This is not just a measure that will affect the ag sector, but almost every sector and individual in Australia relying on diesel or petrol-powered machinery and equipment.

Due to Russia’s invasion of Ukraine, fuel prices worldwide have soared and motorists have been feeling the pinch.

As a result, the Government is halving the fuel excise for six months. This will see excise on petrol and diesel cut from 44.2 cents per litre to 22.1 cents per litre.

Fuel prices are expected to lower within weeks.

As part of a range of measures introduced in 2020 to boost employment, the Government has been subsidising 50 per cent of eligible apprentice’s wages (for a duration of 12 months for each apprentice), regardless of geographic location, occupation, industry or business size.

The popular measure has been extended and expanded several times and was most recently given an expiry date of June 30, 2022.

In September last year, a separate measure, entitled Completing Apprenticeship Commencements (CAC), was introduced to provide wage subsidies for the second and third years of an apprenticeship albeit at a lower rate (10 per cent in second year and five per cent in third year).

A new measure titled the Australian Apprenticeships Incentive System, introduced in the recent Budget, will commence on July 1, 2022, meaning employers taking on new apprentices on July 1, 2022 or later will be subsidised under this new scheme.

The new system, while much less generous to employers compared to the initial scheme, still continues to subsidise new or recommencing apprentices albeit at a lower rate and has a three tier system based on a Priority Occupations List and geographical location.

Dependent on the occupation or location, employers get a wage subsidy of up to 15 per cent for the first year, and lower subsidies in the following years.

As part of the program, apprentices will also receive support payments and allowances for the duration of their apprenticeships.

Read our full story on the Australian Apprenticeships Incentive System for more details on the scheme.

Business owners with businesses turning over less than $50 million a year will be eligible for a range of new tax offsets to help digitalise their businesses and upskill staff.

Eligible businesses will be able to able to claim a bonus 20 per cent deduction for the cost of expenses and depreciating assets, up to $100,000 of expenditure per year.

Eligible expenditure includes items such as portable payment devices, cyber security systems and subscriptions to cloud-based services.

The boost will apply to expenditure incurred from March 29, 2022, until June 30, 2023.

Small businesses will also be able to claim a bonus 20 per cent deduction for the cost of external training courses delivered to employees in Australia or online, by providers registered in Australia.

This boost will apply to eligible expenditure incurred from Budget night until June 30, 2024.

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