Business was one of the high profile losers in the 2013 federal budget with the removal of tax concessions, while food industry commentators also pointed to a lack of measures to stimulate the sector.
According to Gary Dawson, the CEO of the Australian Food and Grocery Council (AFGC), there was little in the budget to stimulate growth and confidence for food and grocery manufacturers and suppliers, and nothing to relieve the ever increasing regulatory burden on business.
He noted the $110 billion food, beverage and grocery manufacturing sector employs almost 300,000 Australians, half of them in regional areas, and is Australia's largest manufacturing sector.
The budget will see the removal of some of the tax concessions currently enjoyed by companies and multinationals in a move that's expected to raise an extra $4.2 billion over the next four years.
According to the AFGC, the 2013 budget forecasting deficits of $19.4bn this financial year and $18bn next financial year underlines the weakness in the economy that consumer goods companies have been reporting for some time.
"Food and grocery manufacturers and suppliers have been reporting for some time the negative combined effects of the high Australian dollar, rising input costs and retail price deflation, creating the most challenging trading conditions for decades,” said Dawson.
"However for a trade exposed sector that is critical to the nation's manufacturing base there is nothing in this budget to attack the regulatory burden choking investment and growth.”
He said the dramatic swing from a forecast surplus to deep deficits this year and next must raise serious doubts about the government's predicted return to surplus in 2016/17.
“Massive budget deficits create a climate of uncertainty for business which undermines confidence and investment, essential to underpin jobs and growth,” he said.
Dawson also noted that a number of the savings measures – such as the axing of the baby bonus, tax increases, deferral of tax cuts and reductions in family assistance – would further crimp consumer spending in an already weak economy.
According to Dawson, one of the few bright spots in the budget was that the widely mooted reduction in the Clean Technology Program did not occur. “The program has been maintained and rephased to take account of high demand,” he said.
"Many food and grocery manufacturers have sought assistance through the Food and Foundries element of the Clean Technology program to invest in low emission and energy efficient technologies to offset the higher costs flowing from the introduction of the carbon tax.”
The peak national body representing the Australian agriculture sector, The National Farmers’ Federation (NFF) said the federal budget also brought little change for Australian farmers.
The NFF said while it is pleased that agriculture has been spared from major cuts, it is disappointed that the Government is simply moving funds around within agriculture and other portfolios, rather than committing additional funds to new projects.
“What the Government has done tonight is rob Peter to pay Paul,” NFF President Duncan Fraser said.
“The Government is not taking a long term, strategic view and investing in the future of this important sector – rather it is simply moving money around within the existing tight agricultural budget.”
Gary Dawson, chief executive of the Australian Food and Grocery Council
