Dual economy a risk for farm sector

THE State Budget of Tuesday highlights the bipolar condition of challenges facing the Queensland economy, as well as being a reminder that we need a strong agricultural sector as one of our core economic foundations.
On one hand, Treasurer Andrew Fraser told us to hang onto our hats for a massive mining and construction boom that will require 140,000 new jobs over two years.
On the other, the floods and cyclone have bruised the economy with a recovery bill topping $6.8 billion; $1 billion more than initially forecast.
It is clear that we have dual challenges in our economy and for the farm sector: competing with and managing a boom in regional areas, and forging a recovery.
The industry welcomes the State Government’s commitment to funding in terms of road infrastructure, and to individual primary producers and small businesses through the Natural Disaster Relief and Recovery Arrangements (NDRRA).
All up, the State Government bill for NDRRA is expected to be about $1.8 billion, with the Commonwealth funding the remainder up to 75 percent.
The Government is to be congratulated for recognising the value of a speedy recovery from the recent natural disasters. Significant recovery in many areas will be dependent on better road access.
We also welcome commitments to biosecurity funding to protect our primary industries from incursions such as Myrtle Rust and fire ants, as well as investments in agribusiness research.
However, we also know that it is obvious that we are at the stage of the political cycle when an election is imminent. Farmers will be wary of blatant electioneering from either side of politics, and will note that recent asset sales have barely wet the sides of the glass when it comes to tackling sizeable public debt.
Queensland’s deficit is estimated at about $4 billion for the coming financial year (from an estimate last year of roughly $2 billion).
Nonetheless, the Budget is courting voters with measures such as the abolition of the ambulance levy on electricity bills and grants to new home buyers.
QFF welcomes the abolition of the ambulance levy, which was clumsily introduced by the Beattie Government when it came to calculating this levy for farmers with multiple electricity accounts, provided it doesn’t see a reduction in current services, and in fact sees an improvement in services in regional areas.
The Budget and Mr Fraser also emphasised the coming boom in terms of jobs, jobs, and more jobs. QFF commends him for that, but we also note that many of these jobs are a result of gas, gas, gas – either at the extraction end or at the liquefied natural gas facility being built at Curtis Island.
Beyond the resources sector, we would have liked to have seen policies that also had a focus on delivering greater outcomes for jobs and productivity growth in the agricultural sector.
There is also the significant hurdle of the impact that these new construction and mining jobs will have on the skills shortage.
The Skilling Queenslanders for Work initiative will be a start, but much more needs to be done to broaden skills development and encouraging workers to live in regional areas.
Pressure on wages continues to mount and it is impossible for farmers to compete for employees when confronting the six figure salaries on offer in the mines.
This budget could have done more to manage the forecast growth, especially for those sectors of the economy that are not awash with the mining boom.
In short, it is a Budget that has attempted to drive some visionary policies, but has been restricted by severe financial impediments and the fast pace of the electoral cycle.