Budget wins some farm group praise

30 May, 2001 10:00 PM
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THE Federal budget has brought both praise and criticism from WA's farmer lobby groups.

Tax cuts and other benefits have been widely welcomed but criticism has come from the Pastoralists and Graziers' Association over arrangements in the Simplified Tax System, and from the WA Farmers Federation over a lack of new money for road and rail infrastructure in the bush.

While PGA economics chairman Lynne Johnston said they were pleased with the "government's ongoing prudent fiscal management" promoting a sound economy and stimulating business, the PGA was disappointed that the announcement of the Simplified Tax System didn't include changes they had pushed for.

Under the current arrangements the Simplified Tax System will come into effect on July 1, 2001 and is only available to small business with $1m turnover or less.

To get a "fairer" deal for farmers the PGA wants the $1m turnover threshold to be changed, and raised to $5m on a net asset basis.

Ms Johnston said the $1m ceiling wasn't enough and excluded too many small businesses.

However, the PGA did not expect a lot in the budget after seeing $6 billion going to rural Australia in various initiatives over the past 12 months.

Boosts in rural health, education and AQIA surveillance have been welcomed by the PGA, with a major bonus being seen in the allowance of input tax credits on new vehicles.

"Finally there is more coming to agriculture protection," Ms Johnston said.

"But it took the foot and mouth disease episode for the government to take notice."

Also on the long overdue list were the funds going to rural health and self funded retirees who "deserved it", but Ms Johnston is weary of "devil in the detail" and is anxious to see how it unravels.

Although generous, Ms Johnston puts a question mark on the $26.4m industry restructure support package.

She said industry had to be aware that business conditions change and they had to stay "ahead of the game".

"It's unfortunate what happened to the dairy industry, and we have to learn from that, but there is a big question whether taxpayers should have to dip into their pockets to restructure agriculture," Ms Johnston said.

"It is not logical and is inappropriate.

"The top performers in business all restructure themselves ahead of the game, instead of behind.

"Deregulation was coming for so long and so many people buried their head in the sand."

Meanwhile, the government got a big tick for reducing company tax and giving NHT a lifeline.

"It is very good to see its continuation but we urge the State Government to sign up other wise we will miss out," Ms Johnston said.

Overall the PGA are pleased with the budget.

Also commending the Federal Government for "sound financial management" is the WA Farmers Federation.

Describing the budget as "fiscally responsible" WAFF senior vice president Trevor De Landgrafft said the government had delivered a surplus every year since being in power, while also paying off foreign debt, and managed the economy to make it conducive for business expansion.

He also congratulated the government for its recognition of the treats to Australian agriculture and their commitment to agricultural protection through the quarantine funding boost.

"In the past the government have been getting away with many of these things with free trade and it is quite clear foot and mouth disease has pointed this out."

But there was no doubt in his mind it was an election budget.

"We welcome the tax cuts and anti-inflationary measures but lets not forget these were promised when we took on the GST," Mr De Landgrafft said.

Even though WAFF recognised the generic benefits for the community handed down, and welcomed a $1.5 billion budget surplus, they believe rural Australia should have seen more direct benefits.

"There was no new infrastructure money for road and rail that we really need in the rural sector," Mr De Landgrafft said.

Also holding criticism in the source of "new" money, Mr De Landgrafft said the $1 billion cast to rescue the Natural Heritage Trust, so it could run for five more years, once broken down was not so exciting.

While he backs its extension he said in essence funding had been slashed from an annual average of $360m over the last three years to $233m a year, and doesn't believe WA will get its fair share.

He also believes the fall in petrol prices, tipped by the government, will have a miniscule effect for farmers.

Meanwhile, WAFF supports the government's response to crisis situations.

These include the move to ease the problem of overworked doctors by placing more nurses in rural areas, the extra $140m for dairy farmers and the $26.4m put toward heading off problems in industry restructure after deregulation.

He said WAFF would be working through the National Farmers Federation to deliver further benefits to regional Australia in the lead up to the Federal Election later this year.

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