Address to the CropLife post-Budget Breakfast
WEDNESDAY, 10 MAY 2023
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2023-24 BUDGET - PROTECTING AND GROWING THE FUTURE OF AGRICULTURE
Good morning everyone, it’s certainly a pleasure to be back with you again at what is now a regular event on the political calendar.
I’d like to start by acknowledging the Traditional Owners of the lands on which we’re gathering, the Ngunnawal people, and pay my respects to elders past, present and emerging.
And I reiterate the Government’s commitment to the Uluru Statement from the Heart and to recognising our first peoples – our first farmers, fishers and foresters - in our constitution through a Voice to Parliament.
A voice, not a veto, on matters that directly impact them and their lives.
I acknowledge the many MP’s, Senators and industry leaders in attendance and my Department Secretary Andrew Metcalfe as well.
I’d also like to thank Matt and his team at CropLife for the invitation to speak here this morning.
This event has become one of the highlights of Budget week and a chance to focus on the how the Budget will benefit the agriculture, fisheries and forestry industries.
And I’d like to thank Clint who is deputising for Lucy and Kath today and doing a fantastic job.
As Matthew has already said, the agriculture, fisheries and forestry sectors are in good shape, but still face challenges.
When I spoke to you in October, after our first Budget, I outlined my plan to protect and grow these sectors and my priorities in doing so – biosecurity, workforce, sustainability and trade.
It was clear to me that these were the major challenges facing our wider agriculture sector. And those priorities remain.
I’m pleased to say that the Albanese Government’s Budget continues the job of delivering on these priorities.
In particular, on biosecurity and sustainability.
Put simply, after last night’s Budget, a new era in Australian agriculture has begun.
For the very first time in our nation’s history, we will now have a sustainable biosecurity funding model to protect our agricultural industry, our natural environment and our way of life.
Years of biosecurity operations relying on stop gap, temporary funding injections, usually in response to imminent threats, are over.
The Budget handed down by Treasurer Jim Chalmers last night locked in a significant, permanent increase to biosecurity funding into the future.
This is a lasting, Labor legacy that will support our ag sector for years to come.
The Budget also signalled a shift in direction for agricultural sustainability through the Natural Heritage Trust, which will now focus on providing producers with tangible assistance to deal with the impacts of climate change, while also becoming more productive.
BIOSECURITY - WHERE WE’VE BEEN
Before I get into the details I would like to take you back almost 12 months.
I was five weeks into my new job as Australia’s Agriculture Minister when Foot and Mouth Disease was detected in Bali.
And while FMD had been in Indonesia for some months, and endemic in around 70 other countries, the fact that it had spread to a popular, nearby tourist destination startled all Australians.
Because the whole country understood the ramifications for our $90 billion agriculture industry if it got in.
And while the gaze of many has moved on, the Albanese Government acknowledges the threat remains.
Our three-pronged approach – undertaken in partnership with industry - of helping our neighbours overseas, strengthening our protections at home and improving our preparedness should the worst happen, has so far paid dividends.
We have also developed and implemented a range of national biosecurity action plans in partnership with the states.
All in an effort to protect our food and fibre industries, the communities that depend on them and the wealth and jobs they create.
But with biosecurity threats increasing by the day, we cannot afford to be complacent.
And we cannot afford to leave our biosecurity operations hostage to uncertain, unpredictable funding, as they were by our predecessors.
SUSTAINABLE BIOSECURITY FUNDING
There is no doubt our national biosecurity system has served us very well, and our biosecurity status is the envy of the world.
But over the last few years, cracks began to appear in our biosecurity wall.
We saw an increase in pest and disease incursions including White Spot disease, Varroa Mite, Banana Freckle and Khapra Beetle.
The risks keep growing, driven by factors such as climate change, increasing trade and travel, changes in land use, and those who do the wrong thing.
Like the travellers bringing in sausage McMuffins, or the car makers and importers who send us contaminated vehicles.
Or worse still, those who were intercepted bringing in 38 tonnes, or 7 shipping containers, of turtle meat, pig’s heads and other biosecurity risk material.
These growing pressures are why there has been a long-standing and pressing need to ensure a sustainable funding model for Australian biosecurity.
Unfortunately, years of advocacy from groups including the National Farmers Federation, Cattle Australia, NSW Farmers Federation, GrainGrowers, Australian Pork Limited and Grain Producers Australia, and the recommendations of the Craik Review among others were ignored by our predecessors.
If you look at the budget information document provided to you on your table, you’ll see at figure 1 that the future biosecurity funding budget we inherited was not keeping pace with increasing threats and costs.
In fact, as the temporary funding injections ran out and the funding cliffs approached, biosecurity funding was actually on track to fall – putting our agriculture sector at risk.
That’s exactly why the Albanese Government made an election commitment to deliver sustainable biosecurity funding, and today I am proud to deliver on that commitment.
For the first time, this Budget includes ongoing, long-term funding for biosecurity, and a fairer way to share the cost of the biosecurity system.
I want to thank the departmental officials and those in my office who have worked hard on this for months, as well as the many people who participated in the consultation process we kicked off last year.
In this Budget, we have announced new funding of more than $1 billion over four years from 2023-24, and over $267 million per year ongoing from 2027-28, to fulfil our election commitment to deliver long-term sustainable funding that will go directly to strengthening the biosecurity system.
Of this amount, the government will provide an additional $845 million over four years from 2023-24 with $255 million ongoing from 2027-28 to maintain biosecurity policy, operational and technical functions on a sustainable basis.
As you will see on figure 1 of that document, we are increasing the amount of permanently dedicated taxpayer funding for biosecurity and reducing the need to rely on top-up measures year on year to keep operations running, as has happened in the past.
There will always be a place for surge funding if a serious biosecurity outbreak were to occur.
But higher and more predictable base funding will enable longer-term planning to help keep our agriculture and environment safer from the introduction of pests, diseases and weeds.
The Albanese Government has listened to the sector’s calls for sustainable biosecurity funding and with this Budget, we have delivered.
The new funding is permanent AND locked in.
PAYING FOR BIOSECURITY – A SHARED RESPONSIBILITY
We are also locking in a fairer system to pay for biosecurity.
It won’t surprise you to know that the consultation process around a new funding model found that, while everyone agreed we should spend more on biosecurity, a lot of people thought someone else should pay for it.
But as we all know, biosecurity is a shared responsibility.
And we have come to the view that funding biosecurity is also a shared responsibility - between taxpayers, those who create risk and those who receive significant benefits from the biosecurity system.
This view did attract support in our consultation process.
In submissions to a consultation paper on sustainable funding in December last year, the following organisations backed a mixed funding model.
The Cattle Council of Australia (as it was known at the time) said “Biosecurity is a shared responsibility and for our biosecurity measures to be most effective, all parties must contribute.”
The National Farmers’ Federation said “Biosecurity is a shared responsibility and as such all biosecurity beneficiaries, including the community, the economy-at-large, the agricultural sector and the environment should invest in biosecurity activities.”
The Australian Food and Grocery Council said “All Australians including producers, industry, and individuals benefit from the biosecurity system. Hence biosecurity is a shared responsibility which requires a mixed funding model.”
And last week’s report for the Invasive Species Council found that “from an economic perspective, the funding hierarchy for biosecurity requires funding be first sought from risk creators, then beneficiaries and finally, government."
After great consideration, we decided a mixed funding model was the fairest approach and that’s why the cost of our sustainable biosecurity funding measures will be shared, with taxpayers, importers, international travellers and producers all contributing.
On the budget document in front of you, figure 2a shows who would have paid what, if we had not increased funding overall, and had not shared the cost more fairly.
Out of the projected $536 million for 2024-25 overall, taxpayers would have borne around $203 million, importers around $318 million and Australia Post customers around $15 million.
Figure 2b shows that now, with increased, sustainable funding in place, the taxpayer share will rise by about 75%, to $350.9 million in 2024-25.
A substantial increase in public funding, recognising that we all benefit from the public good that a strong biosecurity system delivers.
Over the months of consultation regarding a new funding model, producer groups and others have loudly called for risk creators like importers to bear an increased share of biosecurity costs.
We have listened to those calls and importers will contribute more, recognising the biosecurity risk created when containers, animals and machines are brought into our country.
That’s fair, especially when you consider that while costs in providing biosecurity services at our borders have continued to rise, charges on importers have not been properly reviewed since 2015.
We began the job of fixing import cost recovery last year, introducing the Biosecurity (hitchhiker) cost regime.
And now, so from 1 July 2023, we will move towards proper cost recovery of biosecurity services provided to importers, with higher, fairer biosecurity fees and charges.
So, for example, a Full Import Declaration for imported goods arriving by air will increase by $5 from $38 to $43 per declaration, while the commercial vessel arrival charge will increase by $300 from $1,054 to $1,354.
We will continue to review these fees and charges annually to ensure regulatory costs are properly recovered into the future.
Figure 2b shows that in 2024-25, importers’ share of our biosecurity operational funding will increase by $45 million to $363.6 million.
In recognition of the rising number of parcels and online shopping arriving in our country, and the biosecurity risks that come with them, we will also introduce a new 40 cent charge on low value imported cargo from 1 July 2024.
This will aim to recover the associated biosecurity clearance costs, raising around $81 million from 2024-25 to 2026-27, and around $27 million per year ongoing from 2027-28.
Despite some calls to do so, we have not introduced an import or container levy in this Budget, as we need to closely examine the trade law implications of doing so.
However, we will continue to work with all industries to make sure that our charging models are fit-for-purpose and, as part of this, look for other appropriate options.
The arrival of people from overseas is also a significant biosecurity risk and has been one of our main focuses in keeping out FMD and African Swine Fever.
The Passenger Movement Charge was established with the intent, among other things, to support biosecurity efforts.
We will increase the current charge from $60 to $70 from July 1, 2024, the first such increase since 2017 and the money raised which reaches - $180 million in 2026-27 -will support our biosecurity improvements.
Finally, to help meet the costs of sustainably funding our biosecurity system, the government has decided to introduce a modest Biosecurity Protection Levy on all domestic agricultural, fishery and forestry producers.
This new BPL will collect an amount equivalent to ten per cent of agricultural levies currently paid.
I genuinely believe this is a modest ask of producers, who are some of the principal beneficiaries of a strong biosecurity system.
In return for the protections received, producers will contribute around 6 per cent of overall biosecurity spending.
I recognise that our producers do make a contribution towards biosecurity – through their on-farm costs, membership fees for Animal Health Australia and Plant Health Australia and levies in the event of an outbreak.
But they are not alone in doing so - taxpayers, importers, travellers and others all contribute now too.
And surely it is in producers’ interests to make a modest contribution towards a better system, that protects their livelihoods from devastation.
It is all hands to the wheel to protect our nation’s biosecurity system – a shared responsibility.
What the new Biosecurity Protection Levy means, in practical terms, for a domestic apple producer, is less than one fifth of a cent per kilogram.
Or for a grass-fed cattle producer it will be an extra 50 cents per head.
For a cotton producer an extra 22 cents per bale, an extra 3 cents per chick for egg producers and for honey producers an additional half cent per kg.
For a forester it will be an extra 1 cent per cubic metre of log and less than a cent per kilo of farmed prawns.
For those producers with commodities not subject to statutory levies, arrangements will be negotiated on a commodity-specific basis.
As you will see at figure 2(b) what that means overall is that in return for a new, sustainable biosecurity funding system:
- Importers will contribute 48% ($363m up from $318m),
- Taxpayers will contribute 44%, including money raised from the increased passenger movement charge ($350m up from $202m)
- Domestic producers will contribute just 6% of the total spending ($48m)
This is a chance to make real change in support of a stronger biosecurity system that protects us from the significant and lasting costs of an outbreak.
And we will be consulting to ensure implementation arrangements are as cost effective as possible.
Today is the start of this process, not the end.
We want industry’s input on the best way to make this work.
In the coming months we will consult widely on the best way to implement these changes, so that your voice is heard.
OTHER BIOSECURITY MEASURES
So you might be asking, what do we get for all this additional revenue?
For starters, it was important to me that we could justify every existing or increased dollar and assure people they would get value for money.
So going forward, funding for biosecurity will be delivered with more transparency and public accountability than ever before.
I will be setting up robust, accountable and transparent governance around biosecurity funding and outcomes.
We will report annually to show where biosecurity funding is coming from and how it is being spent.
But we also want to see real improvement for those extra dollars.
Because the government also recognises the importance of investing in lifting the capability of the biosecurity system.
That is why, as part of our sustainable biosecurity funding measure, beyond lifting operational funding we have also provided $145 million over three years from 2023-24 to deliver new, modern digital systems, integrated with business systems, to improve the effectiveness and efficiency of biosecurity clearance in cargo pathways.
This will bring our cargo management systems into the modern digital age, reducing costs and delays for industry and government.
This will free up biosecurity workers to conduct more inspections and reduce congestion at the border.
We are also restoring an enduring partnership with Indigenous Rangers who are essential partners in protecting our country from biosecurity threats.
This budget includes $40.6 million and $12 million a year ongoing beyond 2027 to continue the Indigenous Ranger Biosecurity Program in Northern Australia and to save it from ending, as would have occurred under the budget we inherited from our predecessors.
This program is a key part of frontline biosecurity monitoring, detection and response in our north.
But it’s not just biosecurity that is noteworthy in this budget for the ag sector.
Since taking on this role, I’ve said the Albanese Government wants to partner with our agriculture, fisheries and forestry sectors, to build a more sustainable future, to protect against the impacts of climate change and to grow by reaffirming our trusted position in the global trade market.
To assist in reaching this aim and further our current effort, the 2023-24 Budget has allocated $302 million over five years to a Climate-Smart Agriculture package under the next five-year phase of the Natural Heritage Trust (NHT).
We have allocated funding to the next five-year phase of the NHT to drive meaningful on-ground projects.
These projects will trial, demonstrate and implement climate-smart agriculture practices and deliver regional landscape priority projects focused on effective natural resource management.
When I’m out in the regions, speaking with farmers about these issues, they proudly tell me what they are already doing to become more sustainable.
And they by and large tell me that they want to do more to adapt to climate change.
But many also tell me they are not quite sure what to do, or who to trust, in seeking advice.
That’s why the next round of the NHT will provide $40 million to establish a network of Sustainable Agriculture Facilitators to support farmers with access to trusted advice on climate-smart agriculture practices, and carbon and biodiversity markets to inform critical investment decisions for their future sustainability.
We will also support farmers to improve soil health with $20 million for soil investments, including on-farm soil sample collection and soil monitoring, and to continue the National Soil Community of Practice.
A further $35.7 million will ensure regional delivery partners and peak land care organisations maintain capacity and are primed to deliver sustainable agriculture initiatives efficiently and at scale.
Another thing needed to help producers adapt to climate change is reliable data.
Reliable data on agricultural production and an understanding of what is going on in international markets with prices and policies, as well as the implications of our own climate on agricultural production, has been critical to enabling agribusiness’ to make sound decisions.
This is why we have invested $38 million in ABARES to expand and continue the work they do in helping prepare farmers and the broader industry for the future.
Investment into ABARES will increase our capacity to understand the risks and opportunities of adopting new technologies and help identify emerging issues for the sector in the global transition to a lower emissions future.
But my priority of course is to not just protect the industry from short- and long-term threats, but to also grow the industry toward its $100 billion goal.
Central to this is of course trade.
That’s why we’ve been working hard to open new markets and push existing agreements into force.
As announced by Prime Minister Albanese during his visit to London last week, the Australia-United Kingdom free trade agreement will enter into force on the 31st of May.
Australian farmers will enjoy improved market access for a range of goods, including immediate elimination of tariffs for short and medium grain rice, wine, honey, nuts and olive oil.
Duty-free transitional quotas for beef, sheep meat, sugar and dairy will provide immediate benefits for farming communities.
Within 10 years, tariffs on all agricultural goods will be completely eliminated.
Deepening our agricultural trade linkages with India is also high priority for our government.
The interim trade agreement with India, which entered into force in December, eliminated Indian tariffs on more than 85% of Australian exports.
This includes immediate elimination of tariffs for key exports such as barley, oats, wool, sheepmeat and fresh rock lobsters.
Australian farmers and fishers also benefit from decreased tariffs for avocados, macadamia nuts, seafood and berries.
Negotiations are also ongoing to secure a new FTA with the EU.
We are pushing hard to gain strong access to what would be a very lucrative market for Australian producers.
Of course, our government has also agreed to a path forward with China on opening up the barley trade, while pushing to remove trade barriers that remain across a number of other commodities.
We continue to argue that stabilising trade is in the interests of both Australia and China.
This will open up new trade opportunities for our farmers.
Overall, the value of our exports are set to reach a record of $75 billion in 2022-23 and the Albanese Government wants that to grow even more.
Animal welfare is important to not only our industry but to the wider public. Increasingly, it will underpin our access to international markets.
Our commitment to being leaders in this area has seen us allocate $3 million funding for the development of a renewed Australian Animal Welfare Strategy and $5.6 million for the panel advising government on implementing of our commitment to phase out live sheep exports.
The framework developed under the new animal welfare strategy will show our commitment to animal welfare to Australians and trading partners – maximising our trade opportunities.
Just finally I wanted to address some media reporting which has been around about the funding of the Department.
A decade of chronic mismanagement, underfunding and budgetary incompetence by our predecessors left a funding cliff that required a substantial sum of money to rectify.
This wasn’t unique to DAFF.
In fact it was something many Ministers and departments were faced with during this budget period.
This budget includes $127 million from consolidated revenue to the Department of Agriculture, Fisheries and Forestry - a one-off payment in 2022-23 to ensure the viability of the Department.
Previously, this funding may have been swept up and renamed to include in our biosecurity funding package, making an already large number sound even bigger.
But that would’ve been tricky and dishonest.
We are determined to be different, even if it means being brutally honest.
So to conclude, protecting and growing our sector, that’s what this budget is all about for agriculture and that’s what the Albanese Government is about for this important sector.
An historic sustainable funding model, with the cost shared fairly between taxpayers, risk creators and system beneficiaries.
A new, large funding package to support farmers become even more sustainable.
Support for trade, animal welfare and a viable department.
I look forward to working with you all as we deliver a new era for the industry going forward.