State Budget Agriculture

State Budget Agriculture

How is it that there is enough money to run a $1.2 billion dollar surplus, give every household a $600 credit on their power bills, employ 800 more cops (when crime has been tracking down for years!), increase state debt by another $4 billion to a record $40 billion and roll out a $27 billion dollar infrastructure program and yet allocate almost nothing towards major new projects to support either what’s left of the old Ag Department, or the key infrastructure that supports farmers.

Eighteen months ago, after the last state budget, I praised the Treasurer and Minister for Agriculture for finally putting an end to 25 years of continuous cuts to the Ag section of DPIRDs budget. 

That budget at least put a floor in the number of staff at around 800 working on Ag related projects, including research, biosecurity or animal welfare and I commended the Treasurer for turning the corner on state debt, even if he was massively helped along by the second mining boom and a far bigger share of the federal GST funds.

My comments were picked up by the government and got regular runs in parliamentary debates as the Treasurer, Premier and Minister for Agriculture took great delight in quoting me at length as they beat up the opposition on their past track record of systematically downsizing the old Ag department and racking up state debt.

What they did not quote me on was the praise I also regularly gave to the Liberals and Nationals for funding over $800m of new agriculture projects through Royalties for Regions, something this government as totally walked away from. 

Mind you, I suspect they also won’t be quoting me on any of the following which outlines what I consider to be the worst budget for agriculture in 30 years.

Let’s start with the Department’s budget, in short, DPIRD is being smashed over the next four years, no matter how you look, at it every single major line item shows cuts. 

  • Total Budget Allocation $450m 2019-20 down to $400m in 2024
  • Delivery of Services $196m down to $190m
  • Regional Industry Development $187m down to $99m
  • Regional Technical Development $92m to $67m
  • Biosecurity $86 down to $85m

Across the board, once you factor in inflation, the Department is looking at cuts of at least 10% in today’s dollars by 2023.  Just look at the staff budget for the next three years which is set to grow by just $1m to just $203m, once you factor in wage growth and promotions, staff numbers will have to fall by at least another 50 FTEs. Failing that, there will be a lot of staff sitting around the various new and refurbished offices with no project funding to do anything. 

The one thing you can guarantee is any staff cuts won’t be coming from the Regional Development side of the business as that’s the only area with any new real projects to oversee, so yet again the staff in the Ag section of the Department will be targeted for a disproportionate share of the redundancies.

No doubt the Minister will ignore all this and point to the jump in funding for this year’s budget.  But most of it has been wasted on a range of Covid related projects like Grocery Watch where the Department ran around checking if there was any food on shelves in country towns after the government imposed their pointless regional closures. Not to mention the ongoing border closures which has forced them to dream up the Wander out Yonder campaign in a desperate attempt to avoid fruit and vegetables being left in the paddock.

Putting aside the cash splash relating to Covid, what I’m really interested in is the long term budget trajectory which over the past 3.5 years plus the next 4 years is one of a steady downward decline for one section of the economy – Agriculture.  

By 2024, all the cash splash from this and last year’s budgets will have ended, and it will be back to situation normal of slash and burn as the Ag and Regional related budget gets hacked to bits as the government focuses its attention on funding its urban priority projects.

As to comparisons with the previous Liberal government’s years and the endless cuts the Department of Ag had to endure, they were at least off set by the $100m a year funnelled into Ag related Royalties for Regions projects (Water for Food, Seizing the Opportunity, Ord Stage II, etc).

Whereas McGowan, has systematically raided Royalties for Regions to prop up the state governments budget and this year we have confirmation of another $2.7 billion being ripped from the $4.2 billion program over the forward estimates.

In its defence, the government proudly says it is delivering a record investment in Metronet and road infrastructure in Perth and the Regions with $2.7 billion having being allocated (funny how it matches the funds that have been extracted from Royalties for Regions). 

The only problem is the government’s idea of the regions is limited to Bunbury, Mandurah, Albany and Gingin, all homes to key ALP seats.  Which gives you the hint that this budget is all about the election, with funding being reallocated from unwinnable country Liberal and National seats to shore up ALP seats and target a swag of metro Liberal seats.

On the positive side of the ledger, the government has this year announced a handful of new projects of interest to the broadacre and pastoral sectors:

  • $8m Northern Beef Research
  • $35m Shoulders to 400km wheatbelt roads
  • $8m e-connect to keep the 187 weather stations working
  • $8m Training infrastructure at Muresk
  • $8m Carnarvon and Esperance Dog Fences
  • $10m Ag Lime Network
  • $4m Grower Group Support
  • $1.4m Katanning Sheep Research

No doubt I’ve missed the odd one, but where is our share of the $5 billion recovery plan or the $27 billion infrastructure investment, spare us the weird projects like the Wheatbelt $10m Renewable Energy Fund which apparently we desperately needed?

No doubt the government will point to the $87m Wheatbelt Secondary Freight Network funding but that was announced back in February and includes just $11m of state funding – where’s the matching funds for the Federal Government’s $80m they put on the table as part of their Covid budget recovery plan?

A read through the Ministers long list of press releases over the past three and a half years shows the government has no great interest in investing big in the states grain regions (the engine driver of agriculture), much preferring to spend government funds chasing rainbows and funding niche projects that will never be game changers. 

For instance, the black hole that is aquaculture, regen ag, hemp, the Broome Fly Farm (I kid you not), and my personal favourite, the Wander out Yonder campaign, that no doubt will have our youth chomping at the bit to pick melons in Kununurra, and bananas in Carnarvon (offering a $10 an hour wage bonus would have been far smarter). 

So, now let’s look at the few winners in the DPIRD budget.  Around $30m is being poured into the move to new HQ offices into Northbridge (a massive lost opportunity to build a new building bringing the whole department together at Curtin or Murdoch campuses). Included in this is $8m to fix the mess of management systems that inevitably came with amalgamating three departments.  Whatever happened to the promised administrative savings?  Amalgamating all those govt departments into super departments has been a unmitigated disaster.

The Bunbury Waterfront development $75m, (not sure why that sits with Regional Development), Collie revitalisation $21m (I wait with fascination to see all the new solar manufacturing and tourism private investments that the Greens and ALP keep telling us will replace high paying coal jobs), and lastly, indigenous housing in the North $48m (whatever happened to the Department of Housing?).

What should have been funded? 

$20m should have been put on the table to help attract Grains Australia to set up their Head Quarters in WA. Insiders tell me all the government is offering is just yet more promises to include them in a future relocation of the old Kensington labs.  Hard to believe the existing lab people will be going anywhere soon after the government spends $18m upgrading them.    The current employees will stay there for years maybe the government can offer Grains Australia 50 empty desks in Northbridge after the next round of redundancies?

$100m for an additional 200 mobile towers.   There is no funding for new mobile towers, recalling that the previous government pumped over $200m over 8 years building most of the towers across the regions.  Best estimates are we need another 200 towers or $100m to really close the gap – $25m a year, our No 1 priority.

$20m for farm water rebates.  There is nothing to match the federal government’ budget announcement of a 25% rebate for dam cleaning, which means WA will miss out.  The government should rush though a $20m allocation to this, as it’s a no brainer, every drop we save takes the pressure off the country supply scheme.

$200m for rail.   Tier 3 rail?  There is not a hint in the budget that it’s on the radar after the big Economics Review – was it all spin?  In fact, a close read of the transport budget shows there is nothing left, over forward estimates, to go towards upgrading 700km of line or Tier 1 and Tier 2 upgrades.

$400m for transport.   As for transport, $35m to add 1m shoulders to 400km of state grain highways is welcome, but what about the other 4,400km?  It’s hard to accept the state government is spending over $1.2 billion on 100km of Bunbury, Albany and Bindoon bypasses, while just $400m would complete the widening of all of the State’s Secondary Grain Freight routes.

Unfortunately, while the government continues to spend between $400 and $600m per year on Metronet, we can just about forget any real hope of this state government finding $100m a year for any additional grain road or $50m for rail freight projects, which would attract matching Federal funding.

Even the Ministers pet projects, like regen, carbon and soils, failed to get another round of funding, but then neither did the Governments one and only election promise of building new relocated Boyanup Sale Yards which proves the case that the Minister is struggling to get any priorities across the line with Treasury.

In summary, the take away is the Ag part of DPIRD is dying and our roads remain deadly, for all the billions the state is spending on infrastructure and Covid recovery, outside of training there is almost nothing that will help WAs broadacre farmers grow the profits needed to help repay the State’s growing debt burden.


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