Budget blues for industry in the face of a strong Aussie dollar

Australian Food and Grocery Council CEO Gary Dawson said there was little in the Budget to stimulate growth and confidence, and nothing to relieve the ever-increasing regulatory burden on business.

"Food and grocery manufacturers and suppliers have been reporting for some time the negative combined effects of the high Australian dollar, rising input costs and retail price deflation, creating the most challenging trading conditions for decades​.

"However for a trade exposed sector that is critical to the nation's manufacturing base there is nothing in this budget to attack the regulatory burden choking investment and growth​.”

Farmer fury​

The National Farmers Federation said the Budget brought little change for Australian farmers—and the little change there has been is simply a re-diversion of funds from one government-funded project to another. 

“What the government has done is rob Peter to pay Paul. The Budget papers show that there will be a redirection of A$141.5m of Caring for our Country funds over five years to fund the household support package and other initiatives​,” said the NFF president, Duncan Fraser.

While he was pleased agriculture had been spared from major cuts, he was disappointed that the government is “simply moving funds around within agriculture and other portfolios, rather than committing additional funds to new projects​”.

“The biggest news for agriculture is that the treasurer has announced A$99.4m in farm household support under the new drought policy assistance package​.”

“But while agriculture has been spared major cuts under the Budget, cuts in other areas may have a flow-on effect to our farmers. For instance, the government is cutting A$3.9bn from the assistance it provides to industries affected by the carbon tax—including agricultural processors. Essentially, this means that those processors, who will now feel the full brunt of the carbon tax, will have little choice but to pass the full cost of this on to farmers​.”

Brewers relieved​

One positive note came from the liquor industry, with brewing major Foster's delighted that the government had not sought to bolster flagging revenues by increasing alcohol taxes.

"They've recognised that Australians like beer and cider, and drinkers will appreciate that​," spokesman Jeremy Griffith told The Australian.

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