Valuable new Asian export markets are in jeopardy if the government’s Enterprise Tax Plan is not passed in full, the National Farmers’ Federation has warned.
The National Farmers’ Federation called on the Parliament to pass legislation paving the way for the new tax cuts.
In a joint statement, National Farmers Federation chief executive Tony Mahar and Business Council chief executive Jennifer Westacott said Australia must reduce its uncompetitive 30 per cent company tax rate to encourage new investment in the agribusiness sector.
“This is a critical time. Australian agribusiness has huge potential to supply fast growing Asian markets but fulfilling this potential will require large new investment at all stages along the supply chain, from family farms to large processors and exporters,” they said.
“The agribusiness sector will need an estimated $1 trillion of new investment by 2050, according to ANZ, yet business investment in Australia is falling at rates not seen since the 1990s recession.
“Limiting tax cuts to small business only would effectively penalise investments in processing of agricultural goods, severely limiting Australia’s potential to add value to its agricultural exports and unlock export markets for Australia’s premium agricultural goods.”
Putting up roadblocks
Mr Mahar and Ms Westacott said other sectors were in a similar position.
“Small, medium and big business form integrated supply chains and putting up roadblocks at any one point has negative repercussions along the chain,” they said.
“The future prosperity of Australian farms relies on being able to partner with larger companies that can transform their raw produce into high-quality, manufactured goods that can compete with cheaper, lower quality products from elsewhere.
“There are tremendous opportunities for Australian agriculture in Asia but, if we fall asleep at the wheel, these opportunities will be snatched up by our overseas competitors.”
Assistant Minister to the Deputy Prime Minister, Luke Hartsuyker, said local farmers are competing “with one hand tied behind their backs” because of Australia’s uncompetitive business tax rates.
“Australia is a net exporter of food and fibre, with about two-thirds of total agricultural production exported,” Mr Hartsuyker said. These exports make Australia wealthier, providing jobs and supporting regional communities.
“Australian agriculture has significant potential to supply the rapidly growing Asian markets on our doorstep, but the necessary increases in production and processing capability will require significant investment along the supply chain.
“With intense global competition for investment in agribusiness, it is vital that Australia moves toward creating a more competitive atmosphere for business.”
The federal opposition has signalled its intention to limit company tax cuts.
This would create roadblocks for investment at vital points in the integrated supply chain and disadvantage the rural community, Mr Hartsuyker said.