View this email in your browser

2022 Federal Budget Overview
for Irrigated Agriculture

Budget Overview

• Unemployment at 4% - and forecast to go below 4%

• Australia’s triple A credit rating maintained

• Fuel excise to be cut in half for the next 6 months, a saving of 22 cents a litre

• The deficit for 2022-23 is expected to be $78 billion or 3.4 per cent of GDP and over the next 3 years, this will more than halve to 1.6 per cent

• Net debt as a share of the economy will peak at 33.1 per cent at 30 June 2026.

Cost of Living Relief

• A new one-off $420 cost of living tax offset for more than 10 million low-and-middle income earners.

• Individuals already receiving the low and middle income tax offset, to now receive up to $1,500 and couples up to $3,000 from 1 July this year.

• A new one-off $250 Cost of Living Payment, to 6 million pensioners, carers, veterans, job seekers, eligible self-funded retirees and concession card holders.

  • a single pensioner to receive more than $500 in additional support over the next 6 months.

Water

The Government will provide a further $139.9 million over 3 years from 2021‑22 to continue investments in the Murray‑Darling Basin by improving river health, enhancing environmental water outcomes and stimulating economic activity in Basin communities:

• $97.0 million over 2 years from 2022‑23 for community‑driven infrastructure projects to improve river health, promote agricultural productivity, and support adaptation to changing water demands

  (Healthy Rivers – Healthy Communities grant program)

  This program is available in the Murray–Darling Basin to build more vibrant regional economies and communities, improve the health of rivers and wetlands, and enhance environmental outcomes through targeted infrastructure investment. It is available to community groups, the irrigation industry, Basin stakeholders and state governments to make real, lasting impacts in the Basin

• $35.1 million over 3 years from 2021‑22 to better deliver environmental water to high value ecosystems in the Edward‑Wakool region

• $3.2 million over 2 years from 2022‑23 to improve water compliance, through the Office of the Inspector General for Water Compliance field officers network

• $2.1 million in 2022‑23 to deliver the water market reform roadmap to improve governance and integrity of Basin water markets, and market information, in response to the Australian Competition and Consumer Commission’s Murray‑Darling Basin Water Markets inquiry. (cost of this measure to be met from within the existing resources of the Department of Agriculture, Water and the Environment)

• $2.6 million in a 12-month, independent, systematic, technical assessment of infrastructure in the southern Murray–Darling Basin to support decisions about the infrastructure of the future to improve water security for all water users and to help mitigate the impacts of floods and droughts on communities and the environment.

• Extension of the On-farm Emergency Water Infrastructure Rebate Scheme for another year to ensure existing funding allocations are available to support farmers across Australia to build drought resilience. The extended scheme will help farmers install infrastructure like pumps, tanks, dams and bores through a rebate of up to 25% on eligible projects up to the value of $25,000.

For Queensland:

• $483 million towards the future construction of Urannah Dam, pending demonstration of value for money and sufficient public benefit for investment, to unlock more irrigated agriculture and providing water security.

• $80 million towards the future construction of the Bowen Pipeline, subject to completion of the detailed business case, confirmation of total delivery costs and co-funding, and demonstration of value for money and public benefit.

• $12.5 million towards a package of groundwater improvements in the Lower Burdekin.

• $11.5 million towards a package of strategic planning work to help determine the optimal mix of water infrastructure investment in the Burdekin and Central Queensland.

• $8.0 million in additional funding to support construction of Big Rocks Weir.

• $7.7 million to construct new common-user infrastructure at the Port of Bundaberg as part of the Hinkler Regional Deal, building on the Government’s existing $10 million commitment to this project.

Agriculture

The Government to provide a further $135.6 million over 5 years from 2021‑22 to support the agricultural sector’s ambition of a $100 billion industry by 2030 through strengthening biosecurity arrangements and agriculture communities:

• $61.6 million over 4 years from 2022‑23 to improve biosecurity capabilities, infrastructure and risk management activities across Northern Australia including addressing the potential threat of lumpy skin disease

• $20.1 million over 3 years from 2022‑23 to strengthen on‑farm biosecurity by supporting the adoption of livestock traceability reforms

• $20.0 million over 4 years from 2021‑22 to work with states and territories to reduce the impact of pests and weeds on agricultural production, native wildlife, the environment, and the community

• $15.4 million over 2 years from 2022‑23 to extend the Supporting Agriculture Shows and Field Days program and support Agricultural Shows societies to upgrade, repair and maintain facilities that support regional agricultural shows

• $12.0 million over 3 years from 2022‑23 to support large agricultural trade events that promote agribusiness

• $6.6 million over 2 years from 2021‑22 to expand the AgMove program and extend it to 31 December 2022 to support more eligible job seekers who relocate to take up short‑term agricultural work, including harvest work in Australia.

Carbon Abatement and Stewardship

The Government will allow the proceeds from the sale of Australian Carbon Credit Units (ACCUs) and biodiversity certificates generated from on‑farm activities to be treated as primary production income for the purposes of the Farm Management Deposits (FMD) scheme and tax averaging from 1 July 2022. The Government will also change the taxing point of ACCUs for eligible primary producers to the year when they are sold and extend similar treatment to biodiversity certificates issued under the Agriculture Biodiversity Stewardship Market scheme, from 1 July 2022. Eligible primary producers are those who are currently eligible for the FMD scheme and tax averaging.

Currently, proceeds from selling ACCUs are treated as non‑primary production income and are generally ineligible for concessional tax treatment under the FMD scheme or tax averaging. ACCU holders are taxed based on changes in the value of their ACCUs each year, which can result in tax liabilities prior to sale.

These changes will encourage more primary producers in regional and remote areas to undertake additional carbon abatement and biodiversity stewardship activities.

This measure is estimated to decrease receipts by $100.0 million over the forward estimates period.

Energy Projects

$1.3 billion of new investment to maintain energy security, keep downward pressure on energy prices while reducing emissions which includes:

• $300 million to support low emissions LNG and clean hydrogen production at Darwin, with associated carbon capture and storage infrastructure. Darwin is positioned to become one of the world’s leading low-cost clean energy hubs, with good access to onshore and offshore natural gas and greenhouse gas storage resources, including the Beetaloo and Petrel basins and the Barossa and Bayu-Undan fields.

• $247.1 million to support increased private sector investment in low emissions technologies including hydrogen, the continued development of a hydrogen Guarantee of Origin scheme,

• $200 million to increase onshore processing and value-add of iron ore exports, to support low emissions steel production in Indo-Pacific customer countries like Japan and Korea.

• $200 million to enhance Australia’s supply chain security through new low emissions manufacturing facilities (using hydrogen and hydrogen-derivatives like ammonia, as well as carbon capture utilisation and storage) in the Pilbara region.

• $148.6 million to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia.

• $100 million to de-risk private sector investment in firm generation and grid infrastructure to increase system strength and capacity in the Pilbara region.

• $100 million to support pre-Final Investment Decision activities and early works to make the Port of Newcastle ‘hydrogen ready’.

• $50.3 million to accelerate the development of priority gas infrastructure projects consistent with the Future Gas Infrastructure Investment Framework and support investment in carbon capture and storage pipeline infrastructure.

Energy and Emissions Reductions

The Government will provide a further $446.1 million over 5 years from 2021‑22 towards energy security, reliability and affordability for households and businesses and reduce the cost of deploying low emissions technologies, consistent with Australia’s Long Term Emissions Reduction Plan.

• $247.1 million over 5 years from 2021‑22 (and $0.3 million per year ongoing) to support increased private sector investment in low emissions technologies including hydrogen, the continued development of a hydrogen Guarantee of Origin scheme, and the development of a Biodiversity Stewardship Trading Platform to support farmers to undertake biodiversity activities ahead of the introduction of a voluntary biodiversity stewardship market

• $148.6 million over 5 years from 2022‑23 to support more investment in affordable and reliable power, including the development of community microgrid projects in regional and rural Australia

• $50.3 million over 2 years from 2022‑23 to accelerate the development of priority gas infrastructure projects consistent with the Future Gas Infrastructure Investment Framework and support investment in carbon capture and storage pipeline infrastructure.

The Clean Energy Regulator will streamline the process for existing Emissions Reduction Fund (ERF) fixed delivery contract holders seeking to take advantage of higher voluntary private market prices, with no change to the quantum of funding available under the Emissions Reduction Fund or Climate Solutions Fund. The financial implications for this measure are not for publication (nfp) due to commercial sensitivities.

The Government will also release Australian crude oil stocks held in the United States Strategic Petroleum Reserve in response to an International Energy Agency declared collective action and seek to replenish storage of refined product (petrol, diesel and jet fuel) and purchase replacement oil stocks at a later date. The financial implications for this measure are not for publication (nfp) due to commercial sensitivities.

Partial funding for this measure has already been provided for by the Government. This measure builds on the 2021‑22 MYEFO measure titled Energy and Emissions Reduction and Voluntary Biodiversity Stewardship Market and the 2021‑22 Budget measure titled Emissions Reduction and New Investments under the Technology Investment Roadmap.

Small Business - Skills and Training

A small business will receive a $120 tax deduction for every hundred dollars they spend on training employees This will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024.

Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of expenditure incurred on external training courses provided to their employees. External training courses to be provided to employees in Australia or online and delivered by entities registered in Australia.

Every hundred dollars a small business spends on digital technologies like cloud computing, e-Invoicing, cyber security and web design will receive a $120 tax deduction. Investments of up to $100,000 per year will be supported by this measure

• The Government is introducing a technology investment boost to support digital adoption by small businesses. The boost will apply to eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023.

• Small businesses (with aggregated annual turnover of less than $50 million) will be able to deduct an additional 20 per cent of the cost incurred on business expenses and depreciating assets that support their digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud‑based services.

• An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost.

• The boost for eligible expenditure incurred by 30 June 2022 will be claimed in tax returns for the following income year. The boost for eligible expenditure incurred between 1 July 2022 and 30 June 2023 will be included in the income year in which the expenditure is incurred.

Telecommunications

The Government will provide $1.3 billion over 6 years from 2021‑22 to improve regional telecommunications, including through providing greater mobile coverage and targeted solutions to address issues such as mobile congestion, as part of the Government’s response to the 2021 Regional Telecommunications Review:

• $811.8 million over 5 years from 2022‑23 to the Department of Infrastructure, Transport, Regional Development and Communications to expand mobile coverage, connectivity, resilience and affordability in regional Australia, building on existing programs including the Mobile Black Spot Program and the Regional Connectivity Program

• $480.0 million for NBN Co to upgrade its fixed wireless and satellite networks to improve services in regional, remote and peri‑urban Australia

• $1.8 million in 2022‑23 to the Australian Competition and Consumer Commission to conduct a review of mobile tower access fees.

The Government will also provide $4.8 million in 2022‑23 to extend the Mobile Network Hardening Program to fund telecommunications network resilience upgrades in regional Australia.