National Australia Bank (NAB), Media Release, 10 May 2023

NAB’s team of leading economists has broken down the 2023-2024 Federal Budget, looking at what it means for agriculture and regional Australia.

Agriculture

The centrepiece of this year’s Budget for the agricultural sector is $1 billion over the forward estimates (and $268 million annually ongoing) and for a strengthened biosecurity system.

There is an additional $127m for Department of Agriculture, Fisheries and Forestry (DAFF) departmental funding in 2022-23 to cover the gap for increased operational activities.

Most of this funding ($845m over the forward estimates), will be directed on policy, operational and technical funding to enable the department to cover increased biosecurity activity.

The government continues to allocate funds from the Natural Heritage Trust funding special account. In this Budget, existing resourcing is allocated to protect nature, threatened species, the BushBlitz, and Natural resource management ($341.2m over five years), $302.1m for ‘climate smart’ agriculture, the protection of wetlands and catchments ($50m) and world heritage properties ($48m). Note that this is not new money, but money from an existing account that has now been allocated to projects.

The Budget also provides for $38.4m for agricultural sustainability, $5m for animal welfare, $5.6m for an independent assessment of the phase-out of live sheep export and $20m for a National Soil Action Plan.

The instant asset write-off continues on a temporary basis for 2023-24, although in pared-back form. Multiple assets can be claimed, but the maximum amount per asset is $20,000.

The Budget also funds a new National Net Zero Authority, which was welcomed by the National Farmers’ Federation (NFF), although with some concerns around electricity transmission easements.

Infrastructure

While the government has a large infrastructure pipeline (around $120b over a decade), the future of these projects will now be subject to an independent strategic review. While the government has committed to prioritising projects currently under construction and election commitments, it is unclear whether other projects will be amended, delayed or cancelled.

The government will also increase the Heavy Vehicle Road User Charge rate from 27.2 cents per litre in 2023–24 to 32.4c/l in 2025–26. This is expected to raise around $1.1b, which will reduce expenditure on the fuel tax credit. With much agricultural produce moved by road, this change will have implications for transport costs.

Cost of living

Cost of living pressures have been felt acutely across the country, but our data shows regional Australia seeing even higher pressures than capital cities.

Since 2022, cost of living stress has grown more rapidly in regional areas. By Q1 2023, NAB’s cost of living stress index hit 70.0 in regional cities and 70.5 in rural areas – above the 68.2 recorded in capital cities. This gap is likely driven in part by more acute housing shortages felt in high growth regional areas.

The Budget provides a number of cost of living measures nationwide, including:

• up to $500 electricity bill relief;
• an increase of $40 a fortnight to Jobseeker, Austudy and Youth Allowance, as well as increases to the age for the single parenting payment;
• higher childcare subsidies costing the budget around $4.7b; and
• substantial reductions to the price of many PBS medications
• expanded eligibility for the First Home Guarantee and Regional Home Guarantee, allowing non-couple joint applicants and non-first home buyers who have not owned a property in Australia for 10 years to access the scheme.

Regional Australia enjoys a specific boost in GP payments. The government is investing $3.5b to encourage GPs to bulk bill under-16s, concession card holders and pensioners. Regional GPs will receive a higher payment than metropolitan GPs.

The government has also expanded eligibility for the First Home Guarantee and the Regional First Home Buyer Guarantee. From July 1 it will include any two eligible borrowers, such as friends and siblings, beyond married or de facto couples, and be available to non-first home buyers if they haven’t owned a property in Australia in the last 10 years.

NAB’s full 2023-2024 Federal Budget Regional and Agriculture report is available to download here.