Budget Review 2020–21 Index

Dinty Mather and Bill McCormick

Australian Government expenditure on the agriculture (including forestry and fisheries) function in
2019–20 is estimated to be $2.9 billion, representing less than 1 per cent of the Australian Government’s total expenditure.

This administrative category consists of:

• $943 million to industry assistance in 2019–20, which is made up of a system of agricultural levies, funds from Government and special appropriations. This includes:
  • $70 million to the wool industry; $202 million to the grains industry; $48 million to the dairy industry; $242 million to the cattle, sheep and pig industries; $381 million to fishing, horticulture and other agriculture; and $31 million in assistance not allocated to specific industries.
• $299 million to rural assistance, which includes funding for assistance for drought and other natural disasters affecting farmers.
• $776 million to natural resource development, which predominately consists of funding for water reform under the National Partnership Payments—Water and Natural Resources program, Water Reform program and Commonwealth Environment Water program. At the time of writing, it is not clear what programs contribute to the ‘other’ natural resource development component, other than the Agricultural Stewardship Package and Pest Animal and Weeds Management.
• $823 million for general administration, which includes funding to the Department of Agriculture and Water Resources.

Table 1: total agriculture and water expenditure (millions)

Source: Australian Government, Budget strategy and outlook: budget paper no. 1: 2019–20, 2019, p. 5-33.

Notes:

Figures may not add due to rounding.

*Includes funding for water purchasing.

Table 2: natural resources development expenditure (millions)

Source: Australian Government, Budget strategy and outlook: budget paper no. 1: 2019–20, 2019, p. 5-34.

Note: Figures may not add due to rounding.

Key trends

Agriculture expenditure is expected to decline by 2.2 per cent in real terms over the period between 2019–20 and 2022–23. This reflects:

• A decline in rural assistance expenditure by 13 per cent between 2010–20 and 2022–23, largely due to an expected wind-down of drought-related assistance over the forward estimates period.
• The natural resources development sub-function will increase in real terms between 2019–20 and 2022–23 by 14.7 per cent. This is primarily due to the increase in funding under the Sustainable Rural Water Use and Infrastructure and from the Water for the Environment Special Account to meet the commitments of the Murray–Darling Basin Plan.

Significant policy announcements

Table 3: selected expense measures, agriculture and water (millions)

The $34 million Agriculture Stewardship Package involves $30 million over four years for: a trial grants program on farm biodiversity enhancement and associated agricultural productivity improvements; and the development of a national policy on agricultural biodiversity. There is also $4 million to develop and trial a farm biodiversity certification scheme to assist farmers to market their produce as being biodiversity friendly in Australia and overseas.

Enhancing Australia’s Agricultural Trade is a suite of measures designed to reduce the costs, non-trade barriers and risks for Australian agricultural exporters. This includes continued assistance to small exporters.

The Red Imported Fire Ant Eradication Program will bring forward funding from the National Partnership on Pest and Disease Preparedness and Response Programme to immediately extend red imported fire ant eradication into newly defined areas.

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