Budget 2024-25: Second surplus but budget coloured by live-ex for farmers

Treasurer Jim Chalmers’ third budget will be remembered as the beginning of the end of the live sheep export trade.

The popular instant asset write-off scheme will be extended in this year’s federal budget.

Federal treasurer Jim Chalmers’ third federal budget will make provisions for a years’ extension to the scheme in a bid to encourage investment, allowing businesses with turnovers up to $10 million to immediately deduct $20,000 from all eligible assets.

The National Farmers’ Federation has been vocal in its push for an extension of the tax relief scheme, which farmers commonly use to invest in tanks and solar water pumps, safer farm equipment and upgrades to Wi-Fi capabilities.

Ahead of Tuesday’s budget, federal Agriculture Minister Murray Watt revealed the road map for the next four years of funds released from the Future Drought Fund.

Almost $520 million from the $4.8 billion fund will be invested over the next eight years to support drought and climate resilience.

Drought resilience, adoption and innovation hubs, the Future Drought Fund communities program and the next phase of the Regional Drought Resilience Planning program are among the initiatives to be extended, at a cost of $235 million.

Treasurer Jim Chalmers arrives at Parliament House on May 14 ahead of delivering his third budget. Photo: Tracey Nearmy/Getty Images

On the eve of the budget, Dr Chalmers revealed Treasury was forecasting a surplus of $9.3 billion in the 12 months ending on June 30, the second consecutive budget surplus in nearly two decades.

But Dr Chalmers said the next three years would have higher deficits than expected as the federal government racks up spending on the NDIS, on aged care, hospitals, Medicare and debt interest.

Cost-of-living relief, housing and Labor’s centrepiece Future Made in Australia policy will be the main features of Tuesday’s budget, but for many farmers it will be coloured by the 11th hour announcement of the end to the live sheep export trade in four years’ time.

Just days before the budget was announced, the Albanese Government unveiled its plan to sunset live sheep exports by sea by May 1, 2028.

There is fear the shuttering of the trade in live sheep by sea puts other live agricultural export industries on notice.

Mr Watt said in Western Australia the budget would contain a $107 million transition package, with the bulk of the funds earmarked to support sheep producers and the supply chain over the next five years.

He also assured the live cattle export trade the Labor government had no intention of assigning the same fate to their industry.

“It’s obviously a really critical pillar of the economic base of northern Australia, including in WA. But really, even from animal welfare grounds, the reality is that cattle are hardier species than sheep … We think that the trades are fundamentally different from an animal welfare perspective, but also from an economic perspective as well,” Mr Watt said.