As Australia barrels towards an election on July 2, major parties have been announcing excerpts of their policies as the week progresses. Most recently, the Greens have unveiled their election policy for 2016, boasting a large focus on agriculture and abandoning the higher taxes for working holidaymakers (“backpackers tax”). However, the centrepiece of the Green’s policy was a pledging for extra funding for research and development (R&D) and Landcare.
In specific, the party is aiming to convert farmer voters with a promise to increase funding for Landcare, which has suffered by profound cuts in recent years. Under the Greens’ proposal, prevailing rural research and development corporations would get a $75 million boost, whilst $100 million over four years would be allocated to form a new Centre for Sustainable Agriculture. Moreover, the party has advocated that $722 million be cultivated into funding Landcare to finance community revegetation and landscape rehabilitation projects.
Rachel Siewert, the Greens agriculture spokeswoman, said improved investment in rural R&D was vital if Australian farmers were to continue to innovate and adjust. In particular, Siewert notes, “unless we seriously invest in sustainable agriculture and into research and development, we don’t think [we are] going to be competitive, or able to keep our agriculture at the cutting edge, in the face of the impacts of climate change.”
Considering that between now and 2050 the world’s food system will need to harvest 70 per cent more food to nourish an increasingly crowded world, never has the task of producing more from less been more imperative. Essentially, these figures reveal that the role of Agriculture on a global scale will no doubt become more paramount in the following years.
Whilst the Greens won’t form government, Siewert says the party will push for a focus on agriculture from the crossbench. “If we don’t make sure that we are putting research and the future of agriculture very high on our agenda, we’re going to fall further behind,” Siewert said. “This is extremely important for our food security at an Australian level and a global level, and also for looking after the future of our farmers and growers.”
Ultimately, the key to unlocking this productivity growth for Australian agriculture is innovation. Research and development (R&D) is one of the key drivers of innovation as it leads to the creation or improvement of products, processes or systems. Hence, innovation in terms of R&D could largely benefit the agriculture sector – particularly in regards to global competitiveness, lowering processing costs and future environment considerations. Whether or not the Greens policy proposals become reality, the government does already offer a generous R&D Tax Incentive for eligible firms. In certain cases, it entails a 45% refundable tax offset to firms generating less than $20 million in annual revenue and a non-refundable 40% tax offset to other companies. Check out our agriculture case study to see the application of key legislative requirements for eligible R&D activities (as they apply to relevant activities in the agriculture industry).
Contact one of our specialist R&D Tax consultants to find out more about the scheme.