BUDGET MANUFACTURING FOCUS HIGHLIGHTS GROWTH POTENTIAL IN FOOD AND GROCERY
The Australian Food and Grocery Council (AFGC) has tonight welcomed measures in the Federal Budget that highlight the important role Australia’s food and grocery manufacturers have in helping drive the nation’s economic and jobs recovery.
The future of Australian manufacturing of food, beverage and grocery products looks brighter as a result of the introduction of instant asset write offs for companies with turnover below $5 billion. This sizeable allowance will encourage investment in innovation, efficiency and sustainability and will create jobs and stimulate local economies.
AFGC CEO Tanya Barden said that the initiatives in the Budget will support investment and innovation in a $127 billion sector that already employs 275,000 Australians and has huge potential for future growth.
Ms Barden said “This is an incentive for business considering upgrading or expansion of plant and equipment, which is particularly important for food and grocery manufacturing which has suffered stagnant capital investment for a number of years. Large and small companies will also benefit from increased refundable offset amounts under the Research and Development tax incentive – providing encouragement for the sector’s manufacturers to develop new products for local and export markets and to meet changing consumer demands.”
New investment creates the need to upskill workers, particularly in modern manufacturing, and so the AFGC welcomes the Budget’s focus on jobs and training with wage subsidies to support 100,000 new apprenticeships and traineeships.
The major tax and investment incentives are boosted by measures targeted to the food and beverage sector, which the federal government has recognised as one of its six priority areas in its Modern Manufacturing Strategy.
“As Australia’s largest manufacturing sector, food, beverage and grocery manufacturing is critical to the Australian economy and to Aussie jobs, particularly in regional areas. The Government’s announcement to back the sector as a priority area recognises that this is a strength we can build on.”
The Modern Manufacturing Strategy allocates $1.5 billion across the six National Manufacturing Priorities over four years, including funding to upscale industry and to ensure the resilience of manufacturing supply chains.
“While the dollars attached to that program are modest, it is important to note that it is coupled with broader fiscal stimulus and reforms aimed at boosting productivity and competitiveness of Australian industry,” Ms Barden said.
Further to growth domestically, Australian food and grocery manufacturers lifted exports by 11.5 per cent to $38.3 billion in 2018/19 and with new Budget support and the ongoing commitment to trade reform, that export value has the potential to grow further.
“The budget support comes during a period of unprecedented pressure on local food and grocery manufacturing – a sector that was already under pressure from rising input costs, a tough domestic trading environment and falling investment before the blow dealt to the economy by the COVID-19 pandemic.” said Ms Barden.
This is an essential sector that brings jobs, supports local communities and economies, supports a safe and reliable food supply and keeps the supermarket shelves stocked.