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Budget 2012: No huge surprises for agribusiness

The biggest changes for farmers in the budget come in the form of new rules, hinted at earlier this year, which will mean farmers can no longer switch from one livestock valuation scheme to another.

The biggest changes for farmers in the budget come in the form of new rules, hinted at earlier this year, which will mean farmers can no longer switch from one livestock valuation scheme to another.

It's a change the government estimates will save about $184 million over the next four years. It will be backdated to August 2011.

Previously farmers could opt to value livestock under the herd valuation scheme or the national standard cost scheme, changing schemes at will and avoiding paying tax.

“The government made it clear it wasn’t prepared to wear on-going fiscal risk and we understand why," said Federated Farmers president Bruce Wills.

Horticulture New Zealand was disappointed increased biosecurity didn't get a nod in the budget.

President Andrew Fenton told Radio New Zealand said more investment was needed to secure our borders, particularly given the recent Queensland fruit fly scare – an opportunity the government had missed. 

KPMG head of agribusiness Ian Proudfoot said there were positives for the primary sector signalled in the budget, including continuing investment in the Primary Growth Partnership, the Irrigation Acceleration Fund and the Sustainable Farming Fund, as well as investment in science.

"On the downside, there is little in this budget to drive new transformational innovation in the sector. There is little to help foster greater industry collaboration. There is little to increase the supply of young, talented people into the primary sector. In reality – and perhaps not surprisingly given the current state of the economy – there is little in the budget that will help the primary sector to make a step change in its performance," he said.

"We have been vocal around the need to target tertiary student funding towards economically valuable courses to ensure a supply of talented people to the primary sector.  The reforms of tertiary student funding in Budget 2012 presented an opportunity to take a step in this direction but, sadly, this was not taken."

He said in the current economic environment, the onus was on commercial companies in the primary sector to commit to investing in innovation.

"If the companies choose to wait for the government to lead the innovation we will in all likelihood be waiting too long and opportunities available will be missed."

Proudfoot said it was likely the primary sector would need to get used to more budgets along these lines in coming years, as rural voters don't win elections.

 

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