Budget – food and beverage to benefit

While  there’s nothing in treasurer’s Josh Frydenburg’s budget aimed specifically at the food and beverage sector, there is a lot in there for all companies, especially the small- to medium-sized entities that make up a large cadre of the industry.

As well as giving tax breaks to lower and middle income earners, there is also encouragement for employers to hire or retrain staff, especially young people.

While there is concern about the amount of debt it will be creating, it is tempered by the need for the government to kick-start the economy, especially in Victoria, which has borne the brunt of restrictions bought about by the COVID-19 pandemic.

In a Nutshell
There will be several positive outcomes for the food and beverage sector including:

  • The government will be handing out $1.5 billion in grants in many manufacturing sectors including food and beverage.
  • A large number of businesses within the food and beverage industry have turnovers of between $10 million and $50 million, and they will be eligible to claim a maximum of 10 tax breaks. Also certain fringe benefit taxes (FBT) will be scrapped on everyday used items such as laptops, phones, and even car parking.
  • Most Australian businesses are being allowed to write off the complete value of assets that are eligible up until June 2022
  • If you are thinking of making staff redundant because they no longer have the skill set needed, companies will be exempt from FBT if they retrain workers.
  • Wage subsidies are available for those companies who higher unemployed younger people and give people apprenticeships.

 

Struggling farmers get budget boost

Treasurer Josh Frydenberg has delivered some relief for farmers who are struggling in drought affected areas of Australia

The government has promised $6.3 billion to help the rural sector, including big payouts for $200 million to increase access to income support, and small ones that include a $2.5 million increase to help farmers with their mental health and wellbeing.

This includes expanding the National Water Infrastructure Development Fund and establishing a new $5 billion Future Drought Fund to support drought resilience projects.

In the 2019-20 Budget, flood-affected farmers in north Queensland will have access to $300 million in grants to rebuild farm infrastructure, replace livestock and replant crops. This will provide family farmers with up to $400,000 for restocking, replanting and on-farm infrastructure across two new grants.

From 1 July 2019 farmers on FHA will be able to discount or exempt the sale of livestock from the FHA income test when it’s invested in a Farm Management Deposit. This will ensure that farmers who are destocking are able to retain access to income support and are able to make long-term financial plans for their future.

Australia’s agriculture industry has been given another boost by the Morrison Government, with $29.4 million worth of measures that target sectors with high export growth potential.

“This investment will get Australian food and fibre to more customers around the world,” said Minister for Agriculture and Water Resources David Littleproud.

“We produce the best food and we need to give our farmers as many markets as possible to send it to. Free trade deals decide the tariffs but we still need to negotiate protocols to send our produce across which satisfy the importing country we won’t bring pests or disease.

“This package includes $11.4 million to break through the technical and scientific trade barriers so Australian fruit and vegetables can get market access into more countries, faster.

“We only export 18 per cent of our horticultural produce, so there is big potential to grow.

“We’re also getting behind boutique producers with a four year extension to the Package Assisting Small Exporters worth $6.1 million to build on its success. This helps small exporters across the sector get market access for high-value goods.

“The government will continue to pursue free trade agreements which have tremendous potential for Australian agriculture through tariff reductions. [We] are also investing $6.8 million over four years to extend the Agricultural Trade and Market Access Cooperation (ATMAC) program – an initiative of the Agricultural Competitiveness White Paper.

“Some $5.1 million will be invested to identify key barriers to trade in high export markets and then remove them. This will be done through the Enhancing Industry Action on non-tariff measures program through work with industry and importing countries. The funding will deliver 11 sector-specific reports to identify the non-tariff barriers to be targeted.

“Trade is key to growing our agricultural sector and if we reach the goal of $100 billion over the next decade this will set us up with more jobs and opportunity for our kids.

“We will also continue to support market access requests and enhanced food safety to ensure we capture the gains from new free trade agreements, meet importing country requirements and maintain our clean, green reputation.”

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