How does the Budget impact food manufacturing?

The Australian Government’s Budget 2022–23 has been handed down featuring a range of funding measures for manufacturing and regional businesses. Halving the fuel excise and excise-equivalent customs duty rate that applies to petrol and diesel for the next six months will also create savings for most businesses.

The Australian Food and Grocery Council (AFGC) was pleased with the Budget’s support for regional manufacturing in the form of the $2 billion provision for the Regional Accelerator Program, as well as the $250 million to extend the Modern Manufacturing Initiative (MMI).

“The past two years have underscored how critically important a strong, sovereign food and grocery manufacturing industry is for Australia. The support for regional manufacturers, who are major employers and providers of essential items, is a significant boost,” said AFGC CEO Tanya Barden.

“This Budget comes as Australian food and grocery manufacturers face unprecedented costs, inflationary pressures and disruption. It is pleasing to see the government has delivered a deficit that is considerably below forecasts while introducing measures to support consumers and shore up Australia’s supply chains.”

Australian Dairy Farmers (ADF) also welcomed the funding allocated to regional programs and the MMI. It noted that the support for flooded areas will see 190 dairy farms receiving help with the disastrous flooding. Other aspects of the Budget will have indirect effects for dairy farmers, such as investments into increased mobile phone coverage, water infrastructure and self-reliant microgrid developments.

Despite this, ADF’s Craig Hough noted the inflationary risk that this Budget presents.

“With the economy at near full employment and being one of the strongest economies in the OECD, some of the stimulus initiatives are difficult to justify. Most of the cost-of-living initiatives are temporary and targeted, and there is a commitment to reduce the Budget deficit going forward, but there will need to be care that we don’t fuel inflation and undermine the very intent of the Budget itself,” he said.

The Australian Meat Industry Council (AMIC) reacted positively to the Budget’s measures, saying that several of its initiatives will have an impact on the meat supply chain. It singled out the $2.8 billion dedicated to upskilling apprentices in addition to the increase by $3.7 billion for the new National Skills Agreement as some of its key components.

“The Australian meat industry is managing an ongoing national shortage of workers, 5000 people at any one time, which is significantly impacting our meat supply chain,” said AMIC CEO Patrick Hutchinson. “Our industry welcomes the significant funding for national skills training and apprenticeship programs that are structured to support and achieve a workforce that is skilled, stable and permanent.”

Funding to increase traceability and biosecurity was also welcomed by AMIC as necessary parts of the industry’s future.

The Australian Industry Group also had good things to say about the skills development aspects of the Budget but noted that workers needed to be welcomed into the country more readily, arguing that while the permanent migration target of 160,000 was admirable, it would not sufficiently address overall labour and skills shortages.

The Budget was criticised for its middling action on climate change and sustainability, with the Climate Council noting that the Budget failed to address causes of climate change, and that although money had been set aside for disaster recovery, extreme weather events were being exacerbated by the changing climate.

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