Government to beef up ACCC to assist farmers

Government to beef up ACCC to assist farmers


Farmers will get some extra help in the battle against the supermarket chains in the government’s long-awaited White Paper on Agricultural Competitiveness released on Saturday.

The package contains A$728 million in new spending on a range of initiatives over the budget forward estimates, as well as $500 million for dams, some of which was announced in the northern Australia white paper.

The government will provide $11.4 million to boost the Australian Competition and Consumer Commission’s (ACCC) “engagement with the agricultural sector” – including the appointment of a new commissioner with expertise in agriculture.

“A more farm-savvy and proactive ACCC will encourage fair-trading and strengthen competition in agricultural supply chains,” said Prime Minister Tony Abbott and Agriculture Minister Barnaby Joyce in a statement. The Nationals – of whom Joyce is deputy leader – have been agitated at the strong power of Coles and Woolworths to beat down prices of suppliers.

The government has also unveiled some financial concessions for farmers. The government is lifting restrictions on banks to permit Farm Management Deposit (FMD) accounts to be used as business loan offsets. This will reduce interest costs from July 1, 2016. If all FMD holdings were to be used to offset business loans, the benefit to the farm sector in interest savings could be up to $150 million a year.

FMDs are used by farmers to defer tax. They do not pay tax when the money is earned but when it is withdrawn from the FMDs. Now they will be able to use the money in a way that is similar to a mortgage offset. Farmers will be able to double their FMDs limit to $800,000 from July 1, 2016.

From July next year, primary producers will be able to opt back into income tax averaging ten years after they have elected to leave.

The white paper also makes provision for up to $250 million in drought concessional loans each year for 11 years.

There are initiatives to improve access to premium markets for Australian exports and to protect Australia’s high biosecurity status. These include $200 million to improve biosecurity surveillance and analysis. There is $30.8 million to break down technical barriers to trade and appoint five new overseas agriculture counsellors, as well as $12.4 million to modernise Australia’s food export traceability systems to improve further the country’s food safety credentials.

Extra money is being put into rural R&D and pest and weed eradication.

The new spending in the package is provided for in the May budget.

Abbott and Joyce will launch the paper in Warrnambool, in the seat of Wannon, held by Liberal MP Dan Tehan.

They said in their statement: “We are determined to make the sector even more competitive and to deliver practical actions that will keep our farmers and farming families profitable and resilient.

“The white paper delivers a fairer go for farm businesses by creating a better business environment with better regulation, healthier market competition, competitive supply chains and an improved tax system.”

The Conversation

Michelle Grattan is Professorial Fellow at University of Canberra.

This article was originally published on The Conversation. Read the original article.


Notify of
Inline Feedbacks
View all comments